This year’s amendment of Austria’s regulations on wage and social dumping has been one of the main topics on the agenda discussed by Minister for National Economy Mihály Varga and Finance Minister Hans Jörg Schelling in Budapest.

Following the meeting, the Minister said that the scope of the EU directive on the posting of foreign workers, which would hit Hungarian enterprises especially hard, did not extend – due to its special status -- to the road transport sector. The new Austrian regulation on wage and social dumping introduced in January puts sizable administrative burdens on the enterprises from new member states, and it makes the application of Austrian wage rates compulsory even for temporary jobs. This puts enterprises from the Central and Eastern European countries, among them Hungary, at a disadvantage, therefore we treated this topic as a priority in our meeting, Mihály Varga pointed out, adding that the Visegrad Four agreed at their Warsaw meeting in April to continue to fight together against the measure.


Speaking of the recent amendment of the law on retailing, the Minister noted that Hungary has been insisting on the two-year rule to ensure the coherence of the tax regime. The Hungarian Government is ready to conduct further consultations with the Commission, but it is not acceptable that they want to ban practices that are used in other member states for Hungary. Under the disputed regulation, an enterprise at which more than half of net turnover are generated by the retail sale of fast moving consumer goods, and this totals at least HUF 15bn in two subsequent business years each but at which the balance sheet is either made even or negative in both business years, cannot continue to operate as retailer of FMCGs after the annual accounts have been accepted.

Highlighting economic relations of the two countries, the Minister noted that Austria was Hungary’s second largest trade partner last year, with an annual volume of trade of some EUR 10bn, while in terms of FDI it ranked as third behind the Netherlands and Germany.


Austrian companies operating in Hungary have substantially contributed to economic growth in recent years, and the Government has concluded four partnership agreements with Austria enterprises designed to foster ties, Mihály Varga stated. In the coming years, Mihály Varga said, Austrian banks – that have large market shares in Hungary – are expected to play a role in bolstering economic growth in Hungary. A good example for partnership is the purchasing of minority stakes by the State of Hungary and the EBRD in Erste Bank Hungary, he emphasised.

(Ministry for National Economy)