Government’s aid to multinational companies: 22 thousand EUR/new workplace

According to HírTV, the Hungarian government gave multinational companies 188 billion HUF (EUR 607.1M) altogether to create new jobs. Based on their calculations these became the most expensive new workplaces in the country. Besides, the reality is far from the one million new workplaces promised before their victory in the 2010 elections.

‘We laugh and cry together’

‘Capitalists are those who sell us the rope with which we will hang them’

– said PM Viktor Orbán in 2007. Of course, he was then the leader of the political opposition as chairman of Fidesz, not prime minister. Seemingly

his wrath did not ease after his landslide victory in 2010

with which Fidesz gained supermajority in the parliament. As a result, fight against international companies continued.

‘They must make it clear to their subsidiaries in Hungary that we laugh and cry together. It cannot happen that while we are crying they are laughing.’ – said PM Orbán in 2010.

However, sectoral taxes were later followed by befriending. Péter Szijjártó, secretary of state those days, invented the system of strategic agreements and cooperation. As a result, Orbán’s cabinet

signed demonstrative contracts with the biggest multinational companies being present in Hungary.

The government has to compensate multinational companies

Hír Tv’s investigative documentary series Célpont processed all accessible contracts and discovered that they do not contain precisely defined pledges or sanctions. In fact, the government signed more than 70 strategic agreements with international companies and enterprises close to the government.

According to György Matolcsy, current governor of the Hungarian National Bank (MNB) the government has

to compensate international companies for the unattractive Hungarian investment climate.

‘The rule of law is insecure in Hungary, administration is slow, and the workforce is not like it should be.’ – stated Ákos Péter Bod, former governor of MNB.

In fact, the government subsidized 85 companies with altogether 188.992 billion forints (607.1M EUR). In return, they should have created 27,542 new jobs. Consequently, the

government paid an average of 6.8M forints (EUR 22.000) for a new workplace. 

Not all of the contracts are accessible

However, according to Célpont, the number of employees drastically decreased in case of 17 companies since the signing. For example, Tesco dismissed 6,000 while Magyar Telekom almost 4,500 employees by now.

‘If a company does not fulfil the contract it has to bear the sanctions’ – said Nándor Csepreghy, Parliamentary State Secretary of the Prime Minister’s Office. However, government did not prescribe for all the companies receiving money to create new jobs. For example, General Electric’s Vice President in Hungary, Endre Ascsillán admitted that there were dismissals. However, he added that they fulfilled the contract they signed with the government.

According to the information of Célpont, there are

more than 200 strategic agreements whereas only 85 of them are accessible.

As a result, nobody knows who they signed these contracts with and what they contain.

Source: Hír TV