Hungarian government adopts further proposals to restart economy

The government has adopted further proposals by the body in charge of measures to restart the economy, mostly concerning Hungary’s position in the international competition for investments, Foreign Minister Péter Szijjártó said on Wednesday.

Concerning the proposals, Szijjártó said that one concerned construction material production, a sector in which prices have sharply increased recently. He said that the government sought to improve the market positions of Hungarian companies, and decided to provide a 5.5 billion forint grant to a 14 billion forint (EUR 39.3m) project aimed at producing construction materials with a special technology in Biharkeresztes, in southeastern Hungary.

• Petrol prices are peaking in Hungary

Under another proposal, Hungary’s Exim Bank will provide subsidised loans totalling 100 billion forints to the full range of the Hungarian business sector, Szijjártó said, adding that so far some 500 billion forints had been distributed among 1,000 companies.

He also announced a new development loan programme for micro businesses using a budget of 50 billion forints in the next 10 years.

Borrowers will have 10 years to pay off their debt with an interest rate of 0.5 percent, Szijjártó added. He argued that banks were not interested in providing loans to the smallest companies because the loans were small and involved too much bureaucracy, adding that “it is important that the state assists them”.

The government has decided to speed up public procurement procedures to facilitate faster implementation of investment projects, the minister said. Under the new system, the assessment of bids could be reduced from over one month to five days, he added.

Furthermore, the government will provide a service assisting potential foreign investors find ideal locations for projects in Hungary, Szijjártó said.

The government has also decided to allow foreign companies in Hungary to employ foreign workforce up to 20 percent of their headcount rather than the current 10 percent, Szijjártó said, adding that “without that opportunity those companies will not expand their operations in Hungary, while this decision may help Hungarian employees retain their jobs”.

The minister added that the government will set up a farmland fund of 400 million euros to help food producers to arable land, as required for stable raw material supplies.

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Source: MTI