Editorial: Stores open Sundays; letʼs go shopping!

Government

The following is the editorial column from the April 22 biweekly edition of the Budapest Business Journal.

The government is to be congratulated on revoking the year-old law requiring most retailers to close on Sundays – a measure frequently lambasted in this column. It is true the decision was apparently made with the same kind of cold political calculus that drove officials to create the legislation in the first place. But motives are not important: An anti-business measure has been dismantled, and we are planning to celebrate by going shopping this weekend.

We can only hope that political calculus, common sense, or any combination of motives, will drive further improvement in Hungary’s business environment. More foreign investors are showing a willingness to enter our market, but the flow of foreign direct investment is still slowed by worries over the transparency and predictability of the Hungarian government.

A survey of current and potential investors in this country, published on April 12 by the German-Hungarian Chamber of Commerce, found that roughly 60% of the respondents are concerned about the lack of predictability in this government. Major credit ratings agencies – Fitch, Moody’s and S&P – all mention a lack of transparency in governance when they explain why Hungary’s credit rating has thus far kept its junk status. Clearly there is need for improvement.

When the law requiring Sunday closings was passed in late 2014, officials claimed the move would allow workers to enjoy a day of rest with their families. It was also obviously a gift to the CBA supermarket chain’s owner, who happens to be a major contributor to the ruling Fidesz party. Due to special loopholes in the law, many CBA branches could stay open on Sundays while their competitors had to close.

Polls consistently showed the unpopularity of the Sunday closings law, but the government made the political calculation of ignoring those polls. Then, early in April, the opposition Socialists overcame legal challenges and a group of intimidating thugs at the election office to force a referendum on the issue. Facing a loss in the voting booth, Fidesz leadership quickly revoked the law.

The change of heart on Sunday closings was obviously made for political reasons: Fidesz wisely denied their opponents an opportunity to embarrass them with a long public campaign against the law, a campaign the Socialists seemed likely to win. But regardless of the reasons, the defeat of the law was a victory for business.

More concessions for political reasons seem to be in the offing. An unnamed Fidesz source reportedly said in early April that the party plans to go into full campaign mode by September, in preparation for the general election in early 2018. Shortly after, the government announced a budget proposal that cuts the VAT on food and internet services – and promised that there will be further cuts to the banking tax.

In the past, the government has shown a willingness to ignore the business community’s calls for a more transparent, commerce-friendly environment. Apparently, they are now feeling enough pressure to make some politically calculated concessions, and that is how democracy should work. There is a lot more that needs to be changed to make Hungary a better place to do business, and to live, but we are grateful for this one victory. See you at the mall! 

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