Economy 2 September 2020, 1:37pm

Hungary FinMin says another partial stoppage of economy must be averted

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In the second wave of the coronavirus pandemic we must avoid another partial stoppage of the Hungarian economy, and one of the best ways to achieve that is a series of lockdown measures deployed on the borders, said the Minister of Foreign Affairs and Trade in Nagykálló, Szabolcs-Szatmár-Bereg county where he handed over an investment subsidy document to Italian-owned ski boots maker Tecnica Ungheria Ltd.

Szijjártó stressed that the emphasis is now on precaution therefore the travel restrictions were not implemented by chance and for their own sake. By these measures the cabinet wants to prevent coronavirus from being brought in from abroad, further threatening the lives, health and jobs of Hungarians.

While the number of new confirmed COVID-19 cases rose to an all-time high (365) on Tuesday, the minister is apparently not bothered by the fact that the share of cases linked to foreign trips is under 10%, as stated by Beatrix Oroszi, lead epidemiologist at the Ministry of Innovation and Technology and also by Gergely Röst, fellow researcher in mathematics at the University of Szeged who is member of a team delivering key coronavirus-related data in a transparent and comprehensible form to the government. Röst estimates the reproductive rate of the virus at 2.0-.2.5, while Oroszi thinks it is even higher at 2.5-3.0.

If the average basic reproduction number (R0) in the population is greater than 1, the infection will spread exponentially. If R0 is less than 1, the infection will spread only slowly, and it will eventually die out. The higher the value of R0, the faster an epidemic will progress. So if one person develops the infection and passes it on to two others, the R0 is 2. R0is estimated from data collected in the field and entered into mathematical models. The estimated value depends on the model used and the data that inform it.

We are currently experiencing a period of economic protection, and looking at the vitality of the Hungarian economy and enterprises we will win also this [battle], just like the first phase of the health care protection, said Szijjártó.

In order to protect the economy and jobs we also need local businesses therefore the cabinet ensures a greater support than ever to companies that have launched investment projects to protect jobs. A total of 806 local companies have committed to such developments to the tune of HUF 377 billion, and 673 of them received subsidies of HUF 151 billion in total, he added.

Szijjártó noted that 98 Hungarian businesses applied for HUF 47 billion worth of subsidies in a short time, while only HUF 18 billion were left in this particular envelope.

"This indicates that the hardcore work of the last ten years was not in vain and Hungary has become one of the liveliest economies of Europe," he stressed.

The Hungarian operation of Italy's Tecnica Group is investing HUF 310 million in a new manufacturing unit, and the cabinet has granted the ski boots maker HUF 154 mn in subsidies, saying the project will save jobs. The factory in Nagykálló is expected to manufacture one million ski boots annually, said the minister.

Tecnica Group is a leading sportswear manufacturer in the market of footwear and winter sports equipment, and owns some historical and well-known brands: Tecnica (ski boots and footwear), Nordica (skis and boots), Moon Boot (footwear), Lowa (hiking boots and outdoor wear), Blizzard (skis) and Rollerblade (inline skates).

The group operates 19 factories in ten countries. The Hungarian operation produces mainly for export. According to public company data, it posted HUF 52.25 billion net revenues and HUF 2.5 bn after-tax profit in 2019.

The minister noted that over the last ten years the unemployment rate in Szabolcs-Szatmár-Bereg county dropped to 8% from 20%, while industrial production grew 2.5 times. A total of 37 companies registered in the county announced investment projects in the value of HUF 18 billion, and a state grant of HUF 9 billion will help save 6,420 jobs, said Szijjártó.

Tecnica Ungheria Kft. managing director Francesco Bassi said the plant in Nagykálló supplies the whole world with Nordica ski boots, employing 350 people and giving job to nearly 800 people including the suppliers in Hungary, Ukraine and Romania.

Miklós Simon, MP of the ruling Fidesz party in the area, said Nagykálló has received HUF 9 bn worth of investment since 2010.

Cover photo depicts Péter Szijjártó, Hungary's Minister of Foreign Affairs and Trade speaking at the ceremony of transferring a document of a competitiveness-boosting subsidy to Tecnica Ungheria Kft. in Nagykálló on 2 September 2020. Source: MTI/Ministry of Foreign Affairs and Trade/Mátyás Borsos