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2011-06-27

Hungary – where Thatcher and Keynes meet

Following up on its ambitious rhetorical pronouncements on the subject, the government has unveiled its National Labour Plan. Mostly the government counts on the measures reducing workers’ rights to incentivise private enterprises to create jobs. Even if this works, it will end up making a lot of people unhappy.
Hungary – where Thatcher and Keynes meet

Following up on its ambitious rhetorical pronouncements on the subject, the government has unveiled its National Labour Plan. It seeks to tackle a dramatic problem that stands in the way of Hungary’s progress. A significant proportion of the plan is a review of the existing and anticipated economic situation, however, and the policies described mostly summarise already announced measures. What is obvious is that the government mostly banks on workfare to improve the employment statistics. Though it regards private sector employment as important, the plan offers few if any new thoughts on how to achieve this. Mostly the government counts on the measures reducing workers’ rights to incentivise private enterprises to create jobs. Even if this works, it will end up making a lot of people unhappy. Fortunately the government is prepared for that eventuality, too.


Say what you will about the Orbán government’s economic programme, one aspect would be difficult to deny: it is certainly unorthodox. On the one hand, Fidesz has wholeheartedly embraced the supply-side mantra of tax cuts for the wealthy. At the same time, it is determined to set in motion the greatest workfare programme since the demise of state socialism.

While Deputy Prime Minister Tibor Navracsics was busy telling the readers of the conservative British The Daily Telegraph that the government would create 300,000 private sector jobs by 2014, the Ministry of National Resources in turn was getting ready to unveil its plan for the labour market, which suggests that in fact a large chunk of the promised jobs will be created within the framework of workfare programmes. Even considering that some of the publicly funded jobs will be based at private enterprises, Navracsics’s statement was ostensibly at odds with the government’s pronouncement about its plan for employment.

Now that the detailed plan, the National Labour Plan (NLP), has been released, we can take a closer look at what the readers of the Telegraph had to miss out on.

Policy Solutions' analysis on the government's National Labour Plan can be downloaded from here.



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Policy Solutions is a progressive political research institute based in Budapest. It was founded in 2008 and it is committed to the values of liberal democracy, solidarity, equal opportunity and European integration. The focus of Policy Solutions’ work is on understanding political processes in Hungary and the European Union. Among the pre-eminent areas of our research are the investigation of how the quality of democracy evolves, the analysis of factors driving euroscepticism, populism and the far-right, and election research. 

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