The COVID-19 pandemic has made Europe to protect itself with each of the EU countries taking specific measures on a day-to-day basis to stop the spread of the virus.
In Hungary, the first case was detected on 4 March and the number of infected patients is increasing with 58 cases confirmed by the health authorities to date. One patient died on 15 March and two were considered cured on 16 March.
On 11 March, the Hungarian government declared an emergency state, imposing:
– a ban on entry into the country for foreign nationals from the countries most affected by COVID-19,
– closure of all the institutions of higher education,
– prohibition of gatherings of more than 100 people indoors and 500 people outdoors.
On 14 March, the closure of all schools was announced. As of 16 March, courses will be held by distance learning for all levels of education.
On 16 March, the Prime Minister announced the total closure of Hungary’s borders; only Hungarian citizens will be able to enter the country. In addition, almost all places will be closed including cinemas, baths, (an institution in this country), cultural institutions, while restaurants, bars and cafés will only be open until 3 p.m. Only food shops, pharmacies and drugstores will remain open longer. Sporting events will be cancelled or delayed one after the other.
The administration in Hungary is operating more and more slowly – access to the offices of administrative bodies is regulated, and since 15 March, extraordinary judicial vacations have been established. During this period of extraordinary recess, hearings will, in principle, not take place, however, the majority of non-contentious civil proceedings, including company law proceedings, can be opened and heard at the same time.
The National Bank of Hungary (‘Magyar Nemzeti Bank’ or ‘MNB’) has requested the banks to introduce a moratorium on loan repayments of enterprises and of private individuals. At the the same time the MNB introduced a moratorium for loans granted under the growth programme (i.e. the ‘Növekedési Hitelprogram’).
Coronavirus also has a pernicious effect on the functioning of the Hungarian economy, especially in the automobil industry. Opel’s factory in Szentgotthárd and Audi’s factory at Győr have already announced temporary production shutdowns as of 22 March, Suzuki’s factory in Esztergom will also close from next Monday, while the managers of the other car brands present in Hungary have not yet made any statement on the issue.
On 17 March, the Ministry of Defence identified 140 vital companies and factories whose control could be taken over by the military when it is necessary.
On 18 March, the Prime Minister of Hungary announced the first wave of the economic measures taken by the Government in order to dampen COVID-19’s effect on the Hungarian economy:
– a moratorium is introduced for all loans granted until today, both for companies (regardless of size or industry) and for private individuals, until the end of the year;
– the extension of short-term loans aimed at companies until 30 June;
– the annual percentage rate (‘APR’, in Hungarian ‘THM) of consumer credits, if entered into after today, is capped at the base interest rate of MNB + 5%;
– a package of measures aimed to help specifically the most vulnerable economic sectors, in particular tourism, catering services, entertainment industry, sport, cultural services, professional passenger transport (taxi industry):
(i) the suspension of the payment obligation for the employers’ contributions,
(ii) the employees’ contributions are significantly lessened, in particular the pension insurance contributions will not be collected, and the rate of the social security contributions is set at the legal minimum,
(iii) the suspension of the payment obligation for the flat-rate contributions imposed on taxi drivers in the fixed-rate tax system of low-tax bracket enterprises and of small businesses,
(iv) the commercial rental contracts cannot be terminated, the amount of the lease cannot be increased,
(v) the contributions for the tourism development will not be collected until 30 June;
– the rules of employment will be relaxed.