Government to Strengthen the Economy with Protectionist Legislation

The government is committed to a protectionist policy in order to strengthen the economy, even if this entails conflicts, said the Parliamentary State Secretary of the Ministry of Construction and Transport at the “Public Procurement Expo 2024” event in Budapest on Tuesday.

Nándor Csepreghy stressed that the public investment framework law, the architecture law shaping the whole construction economy or the new legislation in the field of transport, are also protectionist. However, the conditions can be set so that Hungary does not go against the common rules of the European Union, but uses the instruments that other EU Member States also apply, he said.

The politician gave the example of protectionist rules in the French agriculture and agro-industry, the German heavy industry, and the Austrian construction industry.

He pointed out that the public construction and investment sector accounts for a significant share of public funds spent through public procurement, and that the domestic regulatory framework has changed significantly in recent years.

Csepreghy recalled that the government had spent HUF 29,000 billion (EUR 75 billion / 1 EUR = 386 HUF) on the development of the country’s infrastructure between 2010 and 2022. As a result of the state’s active economic policy, the state’s wealth situation has also changed, with the value of state assets rising from HUF 11,650 billion in 2010, to HUF 18,000 billion by 2020.

In regard to the recently adopted public investment law, he stressed that

the system of awarding public contracts on the basis of price alone should be abandoned, as it would make small and medium-sized operators noncompetitive.

The State Secretary pointed out that the Investment Act opens a two-stage process: public investments will be phased and the state will be given the opportunity to intervene at several points. The separation of the planning and construction phases will significantly reduce the uncertainty factor, which has previously forced companies with weaker capital backing to take greater risks, he said.

Regarding the construction law, Csepreghy noted that it affects the whole construction sector, from the supply of basic materials to construction and public and private investments. He stressed that they want to significantly increase the supply of Hungarian building materials, as the share of Hungarian raw materials is currently below 50 percent. He also announced that the Ministry of Construction and Transport was preparing a third package of legislation to transform the Hungarian railways. The planned program will be of the same volume as the development of express road networks over the last ten years, he stressed.

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