I dare you to do business in Hungary...

Another Industry Killed Overnight

Announcement on Monday, parliament rubber-stamps and president signs the law on Tuesday, it is published by Wednesday.   

CORRECTION: The law was published already on Tuesday night so that pesky peasants can’t open a single new account on Wednesday. 

Orbán is on a full-blown austerity drive (he has been for a while, but not so desperately). One of the casualties are the state-subsidized home savings accounts.

You can argue whether it is a good idea that the government meddles in people’s home buying and family planning choices – but the question is truly academic in Hungary. The government has always been doing that. Home savings accounts were one of the tools. They promoted savings by topping up savers’ accounts generously. And given that we live an interest rate desert where it is impossible to get more money out of the bank than you have put in, such a savings construction was pretty much the only way to realize a recognizable growth on your saving – at least beating the official inflation rate, which is not much. Beating house price inflation is a different matter altogether. It is not possible.

This is why this program (along with the distasteful loan-for-babies program) were the only lifeline for naive souls who still believed in the dream. Tens of thousands of babies were promised in exchange for a meager loan and allowance that was quickly outpaced by property prices.

On Monday, the abolition of the home savings accounts was announced. By Tuesday, the law was rubber-stamped by parliament and the president (“The Nation’s Ballpoint Pen”) signed it into law. As I write these lines, the printing presses are working to publish the law on Wednesday, first thing in the morning.

CORRECTION: The law was printed and published Tuesday night so that no one can open another account on Wednesday. 

Long queues have formed at every institution where such accounts could be opened with people who wanted to take advantage one last time.

The worst thing of all? The official and the unofficial explanations. According to the Party line, the government wants people to pledge more babies, rather than save money (even though having a child is the biggest poverty risk in Hungary). And that the institutions that held these accounts made and “extra profit”. (Orbán pro-market my ass…)

The unofficial reason is the housing lottery, the barely legal business of a minister that was announced years ago, but they have been busy with the residency bond program so far. Not anymore.

This is not the first industry to go to the dogs overnight either. Ask anyone in the tobacco business, banking, energy, retail – and of course the media. The law that attacked CEU took only slightly longer, but the gambling monopoly to give the entire industry to just one crony was similarly quick ad unexpected. Once they get an idea into their little heads, they make a point of it to demonstrate that they can push it through in no time. National consultation to find out people’s thoughts were not necessary this time.

I dare you to do business in Hungary.

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