CCIFH: Helping With the Crisis, Moving Towards Sustainability

Analysis

László Károlyi

László Károlyi, chairman, and Ágnes Ducrot, executive director of the French-Hungarian Chamber of Commerce and Industry (CCIFH), talk with the Budapest Business Journal about the steps the chamber is taking to help its members cope with the economic crisis.

BBJ: Working with the government and others, what steps is CCIFH taking to help with the energy crisis for businesses and the rising cost of living forhouseholds?

CCIFH: The European and global economy is suffering from a post-COVID “supply chain syndrome,” whereby supply chains have failed to recover to pre-coronavirus levels and the arrival of both raw materials, components and final products is compromised. On top of this comes the impact of the Russo-Ukrainian war, which led to an explosion in energy prices. The primary effect is inflation, reaching almost unprecedented levels not only in HUF but also in EUR and USD. The power of a chamber is not enough to make a marked difference in this global situation, but it can be an initiator and a catalyst in all issues that help to bridge this uncertain and volatile economic situation. We focus our information and experience-sharing business forums for our member firms mainly on hot topics that are most relevant to their daily business impacted by the above mentioned issues. In dealing with the government, we can help raise ideas and thoughts aiming to temper the impact of the above mentioned issues, making it easier for entrepreneurs to sustain operations while these extreme conditions exist. For example, how the energy price limit is applied or the conditions for imposing additional taxes, the scope of the stakeholders, and so on. Of course, the openness of the other party is also needed to turn ideas into action.

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

CCIFH: At the end of February, the chamber and the entire French-Hungarian business community expressed their solidarity and support with the citizens of Ukraine. The chamber is always at the service of its members. As we knew that some of our member companies were directly or indirectly affected by this crisis, we offered our help. In a special issue of our newsletter, we collected the donations of our member companies. Currently, looking to the future, we are following with interest the initiatives of French bilateral chambers abroad in the context of the reconstruction of Ukraine and we are looking for opportunities for similar actions in Hungary.

BBJ: Inflation, supply chain issues, and the ever-tighter Hungarian job market also need addressing. How is the chamber reacting to these pressures?

CCIFH: The Hungarian labor situation is in a critical situation. This is not specific or generated by inflation. It is typical of Eastern Europe that, following the change of regime in the 1990s, and after the accession of the former communist countries to the EU, a large number of employees, mainly from Generation Y but also Gen X, left their countries to find jobs in Western Europe. The share for the region is estimated at 8-12%, in Hungary, at 7-8%, and this is the segment of workers from which employers prefer to hire. This difficult labor market situation has been further aggravated by the salary tension created by the current inflationary explosion, which could lead to a dangerous price/wage spiral. On this topic, the chamber can help members by providing up-to-date and valuable data, comparisons, job analyses, and sharing company experiences. All this builds a more complete picture of the situation in the labor market, the difference in employees' needs by generation, and the evolution of wage demands, providing employers with full and accurate information to make the right decisions. In November, we organized the fall round of our Hot-topic series of events on this issue.

Ágnes Ducrot

BBJ: Sustainability has long been afocus of the chamber. With all thethreats outlined above, do you fear itwill fall back down the agenda?

CCIFH: The chamber is committed to sustainability and climate neutrality. We are involved in many initiatives. Unfortunately, it seems to us that we are still talking much more about climate change prevention and sustainability than acting on it: and we are not talking just about the CCIFH but all the economic players who have or could have an impact on the Earth’s climate. We can only succeed in this challenge if governments, companies, and individuals stand up for climate neutrality in principle and in action. Everyone must be made aware that to achieve climate neutrality and carbon neutrality, it will cost more to live. Governments need to provide a legislative framework and tax relief that do not make this an unbearable burden on businesses and individuals. This would mean giving up part of their tax revenue. Companies should accept that a certain percentage of their profits should be spent on climate neutrality projects. Perhaps the best approach, without harming competitiveness, would be that all companies uniformly would invest Y percent of their revenues of X past years into climate neutrality projects.  This would avoid loss of share or company value but would  win important resources available for climate-neutral projects. Individuals can also contribute to achieving carbon neutrality and sustainability. Tax incentives and awareness-raising campaigns can make individuals realize they can do a lot by collecting waste separately, for example. Even though sustainability costs more, it is worth acting together and spending money so that our children and grandchildren can enjoy similar living conditions: clean rivers, beautiful forests, good air, and healthy food.

BBJ: Given all these pressures and challenges, are you seeing any impact on chamber membership numbers?

CCIFH: We consider ourselves lucky. The number of chamber members has been growing steadily, albeit slightly, year after year. Rotation is a natural process in the life of any chamber. Economic downturns always significantly impact membership, but most members have been loyal to our business community for years. When setting our annual action plan, we always keep our members’ goals in mind. We meet with them regularly, visit them and assess their needs. We make member satisfaction our top priority and sincerely celebrate every success of our companies.

BBJ: Is there anything else you would like to add?

CCIFH: In recent years, we have faced many challenges, starting with the pandemic, followed by the Russo-Ukrainian war. This was followed in the second half of 2022 by an extreme economic situation, one of the consequences of which was a multiplication of energy prices. This is an unmanageable change in the short term, as it is impossible to pass on such a price change to consumers, whether industrial, commercial or private. The situation has taught us a hard lesson, but it is common sense and the goal of all people to move towards a way out of this situation. Just as there have been many times in history when the world has been in a difficult economic situation, and we have been able to find appropriate solutions to the problems, we are confident that the decision-makers who can play a role in this willfind solutions to make the world alittle better next year.

This article was first published in the Budapest Business Journal print issue of December 2, 2022.

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