Economy 13 March 2020, 9:43am

Hungary to face "immeasurably severe consequences", PM warns

Portfolio

The ramp-up stage of the epidemic in China lasted 5 to 6 months, so the coronavirus will remain in ascension for not just a week or two but for several months to come in Hungary, and it will take another few months before we can return to the starting situation, Prime Minister Viktor Orbán said on public radio Friday morning. The Hungarian economy has already come to a halt, but the government will compile ideas on how to restart it with a re-planned budget and through community effort, Orbán said

Orban Viktor Kossuth Radio interju koronavirus jarvany 200313

eWe should not hope for this hard period to boil over in just a week or two, as it "will last for long months," the PM said in the interview.

According to Orbán, several kinds of power are required to handle the situation. The most important one is spiritual power in limiting the effects of the epidemic. We also need police power: as Hungarians returning from abroad are screened at the borders, they may end up in official or voluntary quarantine. "Those who do not comply must be made to, using force if required," Orbán said. "We also need financial power, which we do have," the prime minister said, adding that discipline is another required quality in which Hungarians are above average.

According to our present knowledge, the coronavirus does not infect children or passes through them without causing symptoms, so old people are more in danger at present, Orbán said. Schools will be closed if we know children are in danger, he added. "If we close schools, it will be for several months and teachers will be put on unpaid leave," effectively ending the school year, Orbán said.

Speaking of the economy, Orbán said the situation was "much more severe than people in general think" and many do not perceive that "the economy is stopping, as it is happening to us now". "We must face immeasurably severe consequences," he said.

The various sectors of the economy, such as tourism or the food industry, are not affected to the same degree and require different forms of help, Orbán said, adding that this was why he asked the Hungarian Chamber of Industry and Commerce (MKIK) earlier this week to survey what kind of help each sector needed. "This will require serious effort" and "serious funds will need to be re-channelled," Orbán said, adding that the entire 2020 and 2021 budgets will have to be re-planned, and as local governments just passed their own budgets in February, they will have to follow suit. "We need a budget with a completely novel approach to restart the economy" but what matters most is not the budget but human lives and their protection, Orbán concluded.

Speaking earlier this week at an MKIK event on Tuesday, Orbán was sending overly pessimistic signals to the audience, telling them not to expect the epidemic to end in a few weeks and to instead expect a long, sustained crisis management process. Later that day, Finance Minister Mihály Varga mentioned the possibility of a recession this year. Then on Wednesday, when announcing the state of emergency, cabinet minister Gergely Gulyás said most European countries will be struggling to avoid a recession. Hungary's budget has very little room for loosening before hitting the 3% Maastricht limit, although recent news from Brussels indicate the European Commission will take a more flexible approach in the future.