Government ousts foreign companies in this sector in Hungary
G7, a Hungarian economy news website, said the Hungarian government found its autumn enemy in the business world. From September, the Orbán administration will take further steps against foreign building material manufacturing companies. The aim is to force them to leave Hungary.
According to G7, that is why the Orbán administration introduced two years ago the so-called mining royalty and extended it this year. In May, they gave the state pre-emption rights for several building materials. Finally, in July, they fined several foreign players in the sector with a carbon-dioxide quota tax.
Hvg.hu wrote that a new bill is in the pipeline, which would give pre-emption rights to the state for not only some building materials but also the companies producing them. Based on the legislation plan of the construction and transport ministry, they will start negotiations about the draft in October. However, the parliament will probably not accept the bill this year.
The draft does not contain it but the government expressed multiple times that they aim to make dominant German and Austrian companies in the construction material production sector leave Hungary. The long-term goal is to carry out construction projects with Hungarian building materials, with the contribution of Hungarian companies. Thus, the profit would be generated for Hungarians. But even János Lázár, the minister responsible for the area, did not mention the Hungarian workforce.
We wrote HERE about the government’s ambitious plans to ease employing hundreds of thousands of guest workers because too many Hungarians work in Austria, Germany, or the United Kingdom and with such low salaries, there is no chance to convince them to come home. Probably that is why Wizz Air is expanding Eastwards and launches regular flight to e.g. Central Asian metropolises.
Foreign companies are already making losses
Mr Lázár said they would like to help Hungarian companies gain market advantage and buy up their foreign competitors. German press also wrote about the Hungarian government’s intentions. In April, Der Spiegel wrote the era of cooperation between the Orbán government and the German companies was over (you can read about it HERE). They quoted a Christian democratic politician, Günther Krichbaum, as saying that the Orbán government tries to reach its goals using mafia methods. First, the administration introduces rules making losses for foreign companies. Then government-close oligarchs appear and make an offer you cannot resist.
The paper mentioned two examples. One is the Duna-Dráva Cement Ltd (owners: Heidelberg Materials and Schwenk Zement), and the other is the E.ON. The owners of the former said they were ready for the fight in a hostile environment. However, the Hungarian government has strong cards in the game, and they utilised some already:
- From July 2021, companies purchasing for higher prices than the government determined must pay a so-called extra mining royalty taking away 90 percent of their “extra” profit.
- In February, they extended that scheme to brick, ceramics and tile manufacturers.
- In May, the Orbán cabinet introduced pre-emption rights for the state concerning 15 products. Thus, foreign companies cannot export them and can get the price difference in court.
- In July, the government introduced a retroactive CO2 quota tax most foreign companies must pay.
As a result, the profit of the foreign companies began to fall quickly, most companies made even losses. G7 even shared a telling chart about that process. For example, Zalakerámia (in Austrian ownership) already talks about sending away some of its employees.
Interestingly, one of the results is that production has been falling since January. But the government is committed to winning the so-called “cement war”, and expects fierce attacks from Austria and Germany.
What is taking place here is going to be taken into account by any foreign company thinking about investing in Hungary. There is no stability of law and rules of business. The government can make a decision to force you out so why on earth would you invest your capital in such a dangerous environment? It’s only fellow mafia states like Russia and China who will do it because they will retain arm twisting coercive methods of their own should the Orban Government turn against them. Hungary is going down a very dark path of corruption and authoritarianism that only means long-term misery and oppression for the nation.
Excellent contribution – Anonymous.
Factual with clarity of the points written.
The destruction of RELATIONSHIPS – not just country’s Governed under DEMOCRACY, that the Orban Governed, through there idiotic ideas & philosophy have DESTROYED, this article, and what Anonymous writes just DEEPENS the demise, the path, this Orban Government are descending Hungary.
WHAT will be the NADIR of there DAMAGE ?
Excluding, the Chinese – we know there RELATIONSHIP with Orban and his Government, but what is INVITING for INVESTMENT into Hungary but “others.”
Sustainability – Stabilization – Opportunities for the FUTURE – what does Hungary – through the Orban “pulverization” process of our REPUTATION and Respect – the brand name Hungary, what is on offer to INVESTORS into Hungary ?
Hungary we are literally in a Financial & Economic collapsed position, that will WORSEN.
The CORE componentry when – as it is being constantly being evaluated – Financial & Economic of Hungary, just continues DOWNWARD in TREND – that gives clear and precise indications – that we are in a cataclysmic MESS.
Who would want to entertain look at Hungary to INVEST ?
This is not helped – for as long as he is permitted to remain, the Prime Minister of this country – Hungary – Victor Orban and his Government – who have “Dumped” us into – what could be said, a “mire” of a position – as a country.
Imagine that: a popular government protecting its industries, some by tariffs (US), some by unfair cost advantages (China), some by buying out the competition then shutting them down as Austria, France, Germany, etc. have done to established Hungarian companies after the fall of the Wall.
Spare us your fake indignations and clean your own financial houses first.
VengefulGuru
REMEMBER History NEVER Lies.
Comments contributed by Anonymous & Deplorable – contain FACT – points of Relevance.
Would YOU remember the name Ganz ?
Take a drive out and along Kobonya utca.
It is known to-day as Chinatown.
This MASSIVE acreage of this site – what was produced on this site – this “Industrial City” – which employed pre 1939 – then post 1945 on – up to 5000 workers per in what was an “Empire of Industry” – the Ganz operation.
Hungary post 1945 – had it taken from us – by the Russian communist.
1945 on – to the commencement of its DEMISE – post the mid 1970’s on, being “scaled down” parts moved to Russia, its size diminishing or shrinking – by the communist Russians.
In 1989 – the wall had fallen, but through the Russian “sell offs” handling & running of Ganz – the raping & pillaging process undertaken by the Russians, in mass volume “moved” to Russia, in great part, the DEMISE of the Ganz Empire was SEALED.
Russia 1945 /1989 – these repulsive dark years in the History of Hungary – the DEMISE of the Ganz Empire – what it was to Hungary – what it provided to Hungary, not just employment, but in its GLOBAL markets through its advanced technologies in vast number of areas of its productions what was produced and made at Ganz Works, Kobonya utca – shipped, moved all around Europe & the Global World, that FINALLY – its destruction – Demise came at the hands of Russia.
Hungary – under the current Prime Minister – Victor Orban – his closeness of FRIENDSHIPS with “Mother” Russia and China – both Communist Regimes.
Hungary – we suffered at the hands of Russia, and points and reference – VengefulGuru you refer in names of Germany & France and Austria – that you dismally FAIL looking at what RUSSIA did to us in those “infamous” years they Governed us – Hungary.
History NEVER Lies, and this present Government continue the process to SELL us OUT – to the Communist country’s of Government, the Government of Hungary’s BEST friends – Russia and China – DEPLORABLE.
If they are already making losses, then they may as well just leave…What does foreign workers have to do with this article? By the way the government always gets blamed for low wages. The question is why have these ‘exemplary’ (or not) foreign companies not been paying higher wages? Why did they not pay the wages that they pay their own at home??? Who is to blame for their greed? Oh that is not ‘greed’ you will say, that is business. Well guess what? – Then so is this. It’s business. This paper stands up for the profits of the foreign companies and the government stands up for the profits of it’s people who elected the government to serve the interests of the people and not the greedy globalists who have been suppressing Hungarian wages and interests.
If they are already making losses, then they may as well just leave…What does foreign workers have to do with this article? By the way the government always gets blamed for low wages. The question is why have these ‘exemplary’ (or not) foreign companies not been paying higher wages? Why did they not pay the wages that they pay their own at home??? Who is to blame for their greed? Oh that is not ‘greed’ you will say, that is business. Well guess what? – Then so is this. It’s business. This paper stands up for the profits of the foreign companies and the government stands up for the profits of it’s people who elected the government to serve the interests of the people and not the greedy globalists who have been suppressing Hungarian wages and interests.
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