How Hungary scares away foreign companies – News


Viktor Orbán wants to “Hungarianize” the economy. Swiss companies are also affected.

Hungary owes its economic growth in recent decades to a large extent to foreign companies: German car manufacturers, Austrian retailers, Swiss cement factories. But now the Hungarian government under Viktor Orbán is trying to take over sectors of the economy that are profitable for them – and is using brutal methods to drive out foreign companies. This also applies to Switzerland.

Are foreign companies present in Hungary? Very. The Hungarian economist Zoltan Pogatsa, who is critical of the government, even says that the Hungarian economy is a kind of “hinterland” of foreign countries, especially Germany. Since Hungary is no longer communist, it has been primarily large companies from abroad that have helped its economy grow, for example Audi, BMW, Mercedes, Tesco, Erste Bank and Holcim. Economist Zoltan Pogastsa says that Hungarian governments have already tried to place a larger part of the economy in Hungarian hands. But no government has tried this as consistently as the current one led by Prime Minister Viktor Orbán.

What exactly does the Hungarian government want? She wants to “Hungarianize” the economy, wants parts of the Hungarian economy to be nationalized or taken over by Hungarian entrepreneurs. Economist Zoltan Pogatsa has a certain understanding of this. “Hungarianization” does not affect the entire economy, for example not the important auto industry. But it concerns, for example, the British telecommunications company Vodafone, which was partially nationalized. And especially the construction industry. Janos Lazar, Hungary’s construction minister, said at a press conference: “Foreign companies and foreign building materials are not welcome. There is no place for them in Hungary.” Hungarian companies should have an advantage in state construction projects. The times are over when Hungary allowed itself to be occupied economically by the French, Germans and Austrians.

More Hungarian-dominated economy – what’s the problem?

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The problem is the methods. Marc Pinter is Swiss with Hungarian roots and lives in Budapest. As an IT entrepreneur and member of the Swiss Business Club, he looks deep into the business of foreign companies in Hungary. He tells how the Hungarian state bullies foreign companies: “A middleman, for example a lawyer, comes to the company and says that a group of investors is interested in it. If you then say you don’t want to sell, there are tax audits and other harassment.” Then, when the company becomes weak, a second, deeper takeover offer follows. Marc Pinter says he knows companies that have already had such visits. Economist Zoltan Pogatsa thinks that, in addition to bullying, something else is questionable. Namely, whether the Hungarian oligarchs ran the companies they took over sensibly or simply milked them for their own enrichment.

What does the Hungarian government say about the allegations? She was not available to answer questions from SRF.

To what extent does “state bullying” affect Switzerland? An example of how Switzerland is affected is the global building materials company Holcim, based in Switzerland. Holcim has a cement plant in Hungary. It is considered innovative. But now, according to Holcim, the Hungarian government is putting a lot of pressure on it. The company doesn’t give interviews, but scraps of conversations with people in the Holcim environment show the pressure: “Hungary is no longer a constitutional state, Prime Minister Viktor Orbán is ruining the industry in order to give money to a few oligarchs.”

Hungary’s government has imposed a special mining levy on the cement industry, in addition to the normal mining levy. And a special CO₂ tax. “We are therefore nibbling on the financial substance and only investing where absolutely necessary,” says those close to Holcim. “We will be ruined by 2034 at the latest.” The European Union says that with the special taxes, Hungary is violating the right to property, the free movement of capital and the freedom of establishment. Holcim confidants also talk about constant tax audits and intimidating visits by the secret service to employees. Holcim is defending itself with lawsuits. The company rejects takeover offers from the Hungarian state, saying it has invested too much and is finally profitable after years.

What is official Switzerland doing?

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She is outraged. When asked, the Swiss State Secretariat for Economic Affairs writes: “In recent years, the investment climate in Hungary has deteriorated. The Hungarian government has introduced some discriminatory measures.” Behind the scenes it sounds even more drastic in the federal administration: Hungary violated international standards and agreements and did not answer letters in which Switzerland protested against this. In short: Switzerland feels like it has been played for a fool.

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