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Hungary in competition for goods with the EU: Viktor Orbán is considering export restrictions for scarce building materials

2021-07-03T00:58:33.073Z


In view of the shortage of building materials such as wood or gravel, Hungary is thinking about reducing exports. Prime Minister Viktor Orbán is risking a new dispute with the EU.


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Wood is a scarce commodity: Hungarian companies that earn money from the price increases for certain building materials are said to have to give up 90 percent of the extra profit

Photo: Attila Balazs / dpa

According to Prime Minister Viktor Orbán, the restrictions should take effect as early as October: In view of the rising prices for wood, crushed stone and other building materials around the world, Hungary is considering making it more difficult to export these goods.

"The way the EU works, you cannot ban or severely restrict the export of such basic materials overnight," said the right-wing national head of government on state radio.

"But we will initiate the process and probably impose export restrictions in October."

more on the subject

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  • Scarce goods: Germany, your shortage economyBy Simon Book, Michael Brächer, Claus Hecking and Michael Kröger

  • Because of scarcity of raw materials: The first state economics ministers are calling for export restrictions

  • Depth psychologist on the German economy of shortages: »Scarcity can also be fun« An interview by Alexander Preker

  • Expensive wood due to the construction boom: "There will come a price that has never been seen before" An interview by Maria Marquart

In Germany, too, industry, but also many craftsmen, have been complaining for months that urgently needed raw materials and preliminary products are missing or delayed delivery: chips for car on-board computers as well as insulating materials for construction sites or wood for furniture.

According to experts, the shortage is already slowing the recovery of the German economy after the corona pandemic - and could also change private consumer behavior over the long term.

For these reasons, the state economics ministers from Thuringia and Saarland, Wolfgang Tiefensee and Anke Rehlinger (both SPD) have also already called for export restrictions on construction timber.

The CDU-led Federal Ministry of Economics, however, refused.

Housing program for families in Hungary threatened

In Hungary, the scarcity of raw materials and the associated price development in the country endanger the success of a state subsidy program, according to Orbán.

The program allows families to receive subsidies from the state for home renovations.

The restrictions are intended to dampen the sharp price increases for wood and steel.

With the move, however, Orbán risks another dispute with the EU Commission, which is fighting for the free movement of goods in the community.

Orbán was recently offended by a law in Brussels banning alleged advertising of homosexuality.

Perhaps that is also why Orbán announced an additional regulation up to the export restrictions, which could hit some entrepreneurs seriously: Up to the restrictions, companies that would benefit from the price increases for certain building materials such as gravel and pebbles will be "90 percent above a certain level withdraw from the extra profit «.

Inflation over five percent

The Prime Minister, who has been in power since 2010, will have to stand for parliamentary elections next year.

The sharp rise in construction costs and the sharp rise in inflation as a whole are likely to deliver campaign ammunition to his opponents.

Annual inflation in Hungary was recently stable at over five percent.

Orbán's Fidesz party is facing a united opposition for the first time.

The head of government recently announced generous election gifts for the population.

Among other things, families with underage children - with the exception of those with an above-average income - should be reimbursed the income tax paid this year before the election.

It has already been decided that under-25s will not have to pay any income tax from next year.

In Hungary, a uniform tax rate (flat tax) of 15 percent applies to income taxation.

apr / dpa / Reuters

Source: spiegel

All business articles on 2021-07-03

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