AmCham: Serving as a Channel Between Businesses and Policymakers

BBJ: Former U.S. Ambassador to Hungary Donald M. Blinken recently died aged 96. What are your memories of him from his time here?

Írisz Lippai-Nagy: Unfortunately, we did not get to meet him personally, but as an honorary member of our chamber, his legacy is cherished within the AmCham community.

Zoltán Szabó: Ambassador Blinken was a true friend and supporter of our country at a pivotal time. He firmly supported Hungary’s integration into the West and championed our membership in NATO and the EU. We are forever grateful for that and offer our deepest sympathies to his family in this difficult time.

BBJ: The latest diplomat to hold the role, Ambassador David Pressman, was sworn into office in August. You recently met him. What are your expectations of the relationship, and where do you hope to work together?

IL-N: We had a great first meeting: Ambassador Pressman is a highly accomplished, open-minded, and dedicated professional who came to Hungary to build bridges at an incredibly challenging time. It was clear from the start that he was genuinely excited to be here, curious to learn about our country, and eager to work with stakeholders from both sides of the aisle. He wants to make a difference.

ZSZ: He is a business-oriented man and was keen to learn about the challenges businesses face and how the embassy can offer its support. Hopefully, we can arrange an event with him in the forthcoming months where he can address the wider membership. We are excited to work with him and his team.

BBJ: The key issues affecting Europe and Hungary are the energy crisis for businesses and the cost of living for households. What definitive steps is AmCham taking in working with the government and others to help?

ZSZ: As always, AmCham serves as a channel between businesses and policymakers. We offer a platform for our members to share their concerns and proposals, and we take these issues to the relevant representatives of the government to find solutions to the best of our abilities.

IL-N: Just to give one example, a concerned member reached out to us because their contract with their gas provider was up, and with no new supplier or offer on the cards, they simply could not guarantee continuing operations in the coming months. We contacted Márton Nagy, Minister for Economic Development, and his team about this following his presentation about the impact of the energy crisis and the government’s measures at our business forum. They were quick to help, and the matter was sorted out within a few days.

BBJ: The other major geopolitical issue is the war in Ukraine, where AmCham’s scope for influence is perhaps less obvious. What has the chamber been doing?

ZSZ: During the initial phase of the invasion, we were in contact with our members to find out how they were impacted by the war: the main concerns besides the safety of the people and the escalating humanitarian crisis were supply chain issues, lack of raw materials, energy supplies, employment of third-country nationals, and the total uncertainty, of course. Unfortunately, many of these concerns have become a reality, we are now trying to avoid a recession, and the war rages on still. We have also brought in various experts to brief the membership about the state and economic impact of the war.

IL-N: We consulted with AmChams in the region and across Europe to exchange best practices, learn about the developing situation, and the measures governments and business organizations are taking to help. The AmCham network has also supported AmCham Ukraine directly with donations. We helped one of their colleagues move to Hungary and supported them with accommodation. Most importantly, we delivered food and supplies to the refugees arriving at Nyugati Railway Station.

ZSZ: We were incredibly humbled by the actions of our members, who immediately stepped up in a time of need. They supported the Ukrainian people and refugees coming to Hungary with donations of food, medicine, clothes, hygiene products, shelter, free devices, and other services. Many have provided aid to colleagues in Ukrainian offices, offering transportation, relocating them to Hungary or other countries, providing accommodation, legal services, advanced wages, you name it.

BBJ: Inflation, supply chain issues, and the ever-tighter Hungarian jobs market also need addressing, with the latter a particular area of focus for AmCham in the recent past. How is the chamber reacting to these pressures?

IL-N: Within our committees and working groups, AmCham members can discuss their experiences and exchange best practices on these issues. We also share these experiences and insights with the government wherever we can. We will undoubtedly focus heavily on these topics at the Business Meets Government Summit, our flagship event with HIPA, on October 24.

ZSZ: We have also recently surveyed our members to learn how they are dealing with the unexpected inflation rates, the historically low Hungarian forint exchange rates, and how they compensate employees. A significant portion (39%) of the survey participants have already provided some form of compensation for the unexpected inflation rate and one-third are still considering the option. Large and medium-sized companies are more able to compensate their employees, but that also varies from sector to sector.

BBJ: There was palpable shock among AmCham members on July 8 when the U.S. Treasury Department announced it was terminating the double taxation treaty concluded with Hungary in 1979. What has AmCham done since, and what is the view of the membership now?

ZSZ: With inflation and crippling energy prices, this topic has taken a backseat, but it is important for us to keep it on the agenda. The United States is one of our most prominent investors and trading partners; we cannot stress how important it is to have a tax treaty with jointly developed tax mechanisms for stability, predictability, and our ability to attract capital. Hungary could be the only EU and OECD country without a tax agreement with the USA.

IL-N: When the decision was announced, we held an extraordinary tax committee meeting with tax, legal, and finance directors across the membership to discuss the effects of this decision, find out which companies are most impacted, and formulate our response. We sent a letter to the government, urging them to find a solution with their American counterparts to avoid irreversible reputational damage and further harm to our competitiveness. We received a response, but unfortunately, no progress has been made yet. We seem to be at an impasse, but AmCham is prepared to work with policymakers in any way we can to achieve a breakthrough.

This article was first published in the Budapest Business Journal print issue of October 21, 2022.