Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure HU-2020-12/652 – Updated – measures in Hungary
|Country||Hungary , applies nationwide|
|Time period||Temporary, 18 March 2020 – 31 December 2022|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Deferral of payments or liabilities
|Author||Nóra Krokovay (KOPINT-Tárki) and Eurofound|
|Measure added||15 April 2020 (updated 27 February 2023)|
Under Section 1 of the 47/2020 government decree and 62/2020 providing details to it, the reason for this measure is to alleviate the adverse effects of the coronavirus pandemic during the period Hungary is in an ‘emergency situation’ announced by the government. Another goal is to keep lending activities afloat despite the crisis. The payment moratorium for companies was one of the first measures announced by the Hungarian government, at the proposal of the central bank.
Every commercial loan or financial lease under a loan contract signed before 2020 March 18 will receive a freeze on loan repayments, capital repayment and any related fees until at least 31 December 2020 (can be extended). The length of the loan will be extended with the period of the freeze. The Banking Association said the the interest on deferred loan payments would amount to about HUF 450 billion in the 9-month period, but our estimations based on partner interviews suggest it would be at most half of that amount. After the freeze period the loan is extended to the period necessary to keep loan payments to their pre-COVID levels and banks cannot charge compound interest either. These rules apply to any fees related to the loan, too. Based on central bank data, the measure could affect up to HUF 8,300 billion worth of bank loans at 33,000 companies.
In its June 2020 Inflation Report, the bank said that the measure was intended to help businesses’ liquidity tensions. Out of a total of HUF 2,500 billion (€7.44 billion) worth of loans eligible for the repayment deferral, HUF 1,500 billion worth of company loan repayments were actually deferred under the scheme by June 2020. This is estimated to be equivalent to about 6.5% of companies’ annual payroll costs. The measure could have an indirect effect on employment, as companies with long-term loans employ about 1.25 million people. Sectors that are indebted to a higher rate include: agriculture commerce, accommodation and catering, and processing.
The deferral is likely to bear higher risk of rising cost for companies in sectors like tourism or catering which may not be able to bounce back quickly after reopening the economy.
|Does not apply to workers||Applies to all businesses||Does not apply to citizens|
Company / Companies
No special funding required
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Not applicable||Not applicable|
Social partners' role in the implementation, monitoring and assessment phase:
The Banking Association was involved in talks.
Eurofound (2020), Suspension on loan payments for companies, measure HU-2020-12/652 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2020-12_652.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.