The Hungarian government came up with yet another brilliant idea to lure emigrants back from abroad. Under-25s were promised 10 thousand euros to start a startup. It didn’t go well.
The program was launched in January 2016, as part of the government’s efforts to reverse the outflow of emigrants (see the story below). Because they may be the scourge of western European countries, but they also happen to be the most productive, most needed people everywhere in the western world.
The ten thousand on offer came from mostly EU funds, and it required some paperwork to be filled…
…and a course to be attended….
…and then some waiting…
…and some more waiting….
In the meantime, their (extremely bureaucratic) companies were set up, employees hired and taxes and social securities being paid.
For. A. Year.
The promised money never arrived, but young entrepreneurs already invested 1000 euros of their own money, three months of business education studies, set up a company and filled in all the paperwork and paid all their taxes.
An anonymous startupper talked to the papers, who started his company in robotics in October 2016. He started the program in February, but could only get the company started in October due to bureaucratic time wasting – which is not ideal for a competitive innovation, such as his. But the difficulties of starting the company were just the beginning.
In May 2017 he is yet to see his 10 thousand euros, but was already made to pay eight months worth of taxes and social security contributions (for a single person with a limited liability company – kft. – it is around 80 thousand forints, 250 euros per month). While his innovation and business model slowly became obsolete. Others saw their ideas made to happen by others abroad while they were waiting.
The authorities haven’t made a decision on a single applicant in the last 6 months, and those who got the green light haven’t seen their money yet.
During the last six months their companies paid 480 thousand forints (1500 euros) in taxes and contributions, while making no revenues. But they cannot leave the program lest they can pay for the cost of their “education” (i.e. the business plan writing course) of around 700 euros.
So they invested
- 1000 euros of own share,
- 1500 euros in taxes and contributions –
- plus 3 months of business education course and
- 9+ months of bureaucratic time wasting
– all for the vague promise of 10 thousand euros in state subsidies.
- For another 700 they can cut their losses and get out of it.
They could have made a lot more (or lose a lot less) during the last 16 months as an intern abroad. Or maybe they used the downtime to apply for the 30+30 thousand the government promised to young couples (conditions apply) to buy a new and overpriced home – in exchange for three kids. They could have accomplished the first of three kids in the meantime. (Let’s hope the baby doesn’t need to eat though.)
At the same time, Fidesz-friendly companies keep getting real money to provide these business education courses.
In a way, startuppers have learned how business works in Hungary.
Despite the government propaganda of a roaring economy and shiny official statistics of growth upon growth, another 370 thousand people are planning to emigrate in the next few years – according to the latest survey of the Office of National Statistics (KSH).
This was not the first time the government tried to lure back people from abroad.
In June 2016 the state’s ill-fated program called…
Come Back Home Young Man
…was cancelled. It lasted for barely a year and spent 300 thousand euros on repatriating a mere 105 people to Hungary and getting them jobs. The embarrassment had been persistent throughout the program as many of the returned youth could only find work at the Come-Back program itself.
The predecessor of the Come Back program was a foundation set up by the youth section of the christian-democrats that entertained us with awkward listicles on why we should definitely return to Hungary. Their list included “reasons” such as this Soviet-era cottage cheese dessert – presumably to trigger millennials’ communist nostalgia.
That program ended when its director emigrated to Israel in 2013.
Follow us on Facebook , Twitter @_MwBp , or subscribe to newsletter