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Author: Zoltán Kész

Orban wants to force private doctors to work for the state

 

The past decade has taught us that the self-proclaimed national conservative government has little respect for conservative values. It has attempted to nationalize private pension funds and introduce price caps that lead to shortages. And now they’re on to healthcare. 

The Hungarian government website has revealed what they think to be the solution to the problems of state-run health care. The government wants to force every doctor to work at least twenty hours a month in the public health care system. Otherwise, their permits would not be granted. Doctors who now only work in private clinics may have to reschedule their workload and working hours. The proposal also mentions that doctors can be forced to carry out their tasks in state hospitals other than where they are stationed, which could mean commutes as long as three hours a day.

The intention is to save the public system. However, the decision will likely backfire. It will generate a significant exodus of mainly young medical professionals, leading to more erosion of public health care and fewer willing medical students who want to stay in Hungary.

Ever since the economic and political transition in 1990, health care has been one of the weakest points of every government. It has been treated somewhat lightly and often tossed aside. Interestingly, it was Fidesz that could have benefited from a healthcare reform pivot more than a decade ago. The Fidesz government’s rise to a supermajority in 2010 was partly due to its 2008 campaign and referendum against the previous government’s plan to have a 1 EUR co-payment structure. 

Orban’s party was well aware of society’s attitude towards having to pay for something they had considered a right to have for free. Winning the referendum by a vast majority paved the way for Fidesz’s landslide victory and a two-thirds majority. As for the health care system, however, they slowly dismounted the public system and have not introduced any significant changes, which have led to shortages in doctors, nurses, and other medical staff, plus long waiting lists for surgeries and treatments.

Orban’s party was well aware of society’s attitude towards having to pay for something they had considered a right to have for free. Winning the referendum by a vast majority paved the way for Fidesz’s landslide victory and a two-thirds majority. As for the health care system, however, they slowly dismounted the public system and have not introduced any significant changes, which have led to shortages in doctors, nurses, and other medical staff, plus long waiting lists for surgeries and treatments.

“Reforms are needed in the Hungarian health care system. But changes like this do not bring about the intended consequences. In fact, they take the country back in time.”

Nevertheless, over time, private clinics have sprung up all over the country, taking over the task of the state by reducing waiting lists and, most importantly, providing good health care to customers. It has become a flourishing sector of the economy. As for patients, although people pay their social security to the state, they do not receive any service once they turn to private clinics.

What is the solution? At the moment, it is hard to imagine an entirely private system in Hungary. However, politicians and medical experts should engage in a conversation about a hybrid system that would require the state to allow competition and, most importantly, invite insurance companies to fill the gap between consumers and service providers. 

This is the only option to satisfy both the medical profession and patients. In the long run, a shift towards more privately-owned hospitals and better service will actually serve the health of society. Putting doctors in chains will not be beneficial. The big question is: what is the government’s real intention, in any case? 

Origianlly published here

Orban’s food price controls are more about control than about inflation

When Hungarian Prime Minister Viktor Orban announced that yet more products would be price capped in grocery stores by government decree, it was clear from the start that this was more about power and control than about combatting inflation.

Following a nationalistic playbook, it looks like Orban is using price caps to make business untenable for foreign-owned grocery chains, hoping they will decamp the country and leave his connected friends with their own monopolies. This has been a decade-long plan, chasing every corporate chain not owned by a Hungarian outside their borders.

That he would pursue this specific policy, which will lead to severe shortages for grocery customers and fuel the over 20% inflation rate, making consumers worse off, reveals how much he’s willing to sacrifice the livelihood of Hungarian households for his delusions.

Cronyism

The Orban playbook has now been played out for quite a while. It begins, as always, with a boastful policy to “help” his countrymen. But it always ends with a friend, colleague, or crony of Orban gaining a monopoly to enrich themselves at the expense of everyone else.

It all began over a decade ago when Hungary introduced a moratorium on opening supermarkets larger than 400 square meters. This was widely seen as helping the domestic chains. Any other chain could only open by following a tedious administrative process in which the government would approve (but usually deny) larger grocery stores.

Amid the pandemic, further burdens were put on larger retailers to mount the pressure. For example, businesses with over 1 million EUR net revenue were obliged to pay higher taxes progressively, in addition to paying corporate taxes. As most Hungarian-owned stores are organized as franchises, only a few were affected by this extra tax burden. The foreign chains, however, were the prime target.

Read the full text here

Orban’s Populism Is Limiting Access for Consumers

From the beginning of this week, the Hungarian Oil Company (MOL) has been unable to provide around 500 independent petrol stations with price-capped fuel. Entire municipalities will be without fuel due to this decision. Another worrying sign is that Shell has already announced a limit on petrol at the stations, where a complete fuel shortage has already become standard. Commenting on the latest developments of Hungarian price caps, Consumer Choice Center’s Government Affairs Manager, Zoltán Kész:

“Consumer Choice Center has already given out warnings regarding the possible effects of the price caps introduced by the Hungarian government. We are now experiencing these effects when we go to fill up our car and find that either there is a limit or, in the worst scenario, we find that you can’t even buy the fuel you want.”

“Not only is it disadvantageous for consumers, but it also has a backlash on distributors forced to take action to limit their losses. Some are closing down, some limit the amount consumers can buy, and some run out of fuel, and you realize it at the pump,” says Kész.

“A year ago, when this measure was introduced, it was clear that the motive behind it was purely political, as the country was about to elect the next government. However, Hungary has seen record-high inflation and rising prices in the past months. For the same political reasons, the government is not changing its price-cap policies, even if the results are clearly seen now. As we predicted at the Consumer Choice Center, shortages and the lack of available services are already happening,” concludes Kész.

The Farming Reform Europe May (not) Need

Agriculture is an issue which is viewed very differently depending on which European country you look at it from. Whether it is the subsidies or the methods, it seems like there is no real understanding among all the EU member states. In this edition of the CEA Talks podcast, host Zoltán Kész is joined by Bill Wirtz, senior policy analyst at the Consumer Choice Center. 

Mr Wirtz starts by saying that in agriculture, currently there have been very interesting developments, for example the ‘farm to fork’ policy. As for beginners, often the European Union establishes framework, which is essentially telling us where we want to go and then it creates legislation to make it happen: “The ‘farm to fork’ strategy is essentially what I would call the most significant overhaul of agriculture in the history of the European Union. Listeners will know that depending on the budget between 30 and 40% of the EU budget It’s already given out and subsidies to farmers and now the EU gets into the policy of how is the food produced and what exactly is the output that we have there so the farm to fork strategy publishes very ambitious targets to reach, it also tries to be part of the European Green Deal and reach sustainability goals.” The CCC experts argues that the strategy wants to cut synthetic pesticide use half by 2030, cut the fertilizer use half, as well as increase organic agriculture production to 25%. Presently, organic agriculture represents about 4% in the US, while this number is 8% in Europe. However, it’s quite divided between countries so if you’re in Bulgaria and if you go to the supermarket, the likelihood of you finding organic food products is quite low because it represents about 0.3% of the overall market, but in Germany or in Austria (where the organic agriculture is about 25%), you have entire an supermarket chain dedicated to organic food, and essentially, this is where we bump into some issues. 

Mr Wirtz starts by saying that in agriculture, currently there have been very interesting developments, for example the ‘farm to fork’ policy. As for beginners, often the European Union establishes framework, which is essentially telling us where we want to go and then it creates legislation to make it happen: “The ‘farm to fork’ strategy is essentially what I would call the most significant overhaul of agriculture in the history of the European Union. Listeners will know that depending on the budget between 30 and 40% of the EU budget It’s already given out and subsidies to farmers and now the EU gets into the policy of how is the food produced and what exactly is the output that we have there so the farm to fork strategy publishes very ambitious targets to reach, it also tries to be part of the European Green Deal and reach sustainability goals.” The CCC experts argues that the strategy wants to cut synthetic pesticide use in half by 2030, cut the fertilizer use half, as well as increase organic agriculture production to 25%. Presently, organic agriculture represents about 4% in the US, while this number is 8% in Europe. However, it’s quite divided between countries so if you’re in Bulgaria and if you go to the supermarket, the likelihood of you finding organic food products is quite low because it represents about 0.3% of the overall market, but in Germany or in Austria (where the organic agriculture is about 25%), you have entire an supermarket chain dedicated to organic food, and essentially, this is where we bump into some issues. 

Related to Central and Eastern Europe, Mr Wirtz mentions that the region is described as one “lagging behind”, in terms of organic farming and consumption. Not enough organic production, as well as the high use of synthetic pesticides are mentioned here. He also says that the region has been at the forefront of questioning the real effects of farm to fork and whether we should implement this because it’s more of a political goal than a scientific goal. The Czech Republic, Slovakia and Slovenia raised concerns on whether this is something we should do because the strategy was drafted before COVID or the War in Ukraine: “While the world turned to its toes the EU has not yet adapted its predictions of what is going to happen with the project. As these events show, our food system is quite dependent on, as Ukraine being the EU’s main trade partner for non-GMO soybeans, 41% of rapeseed, and 26% of honey. In fertilizers, we usually get nitrogen-based fertilizers from Russia, which provides about 25% of the world’s exports but currently under sanctions. So, as we look at the situation, we realize that huge chunks of our agricultural dependency is currently unavailable. So, if our imports are compromised but at the same time the farm to fork strategy wants us to reduce farmland by 10% these ideas just do not add up at the moment. In my opinion, especially countries in Central and Eastern Europe are and will be experiencing this loss of trade.”

As an analyst at the Consumer Choice Center, Mr Wirtz also emphasized the important work his organization is doing in the European Union in order to change the policy. He says that “In general, as any organization should require from legislation is sort of an impact assessment, basically asking them to tell us what happens if you do this, and at least create awareness for the public, and a common line of understanding. However, the EU’s impact assessments have been very charitable towards their own strategies. Fortunately, we have more unbiased data on this. The USDA did an impact assessment as to what happens if the EU implements this: production down at 12%, food prices up by 17%, exports down by 20%, and it would cost us about $71 billion. So, while this is obviously very concerning, we’ve been asking policymakers to request an impact assessment which not only considers all implications of this strategy but also takes into account the effects of COVID and the war in Ukraine. Before it had a chance, but now with many trading partners unavailable, it is just impossible. The problem is that some political people have staked their reputation on these projects (an unfortunate reality of Brussels politics in general when in the departments or some policy makers act based on their own political reputation, they need legislation to pass, because without it, they have nothing to show.“

When asked about future agricultural innovations, Mr Wirtz responded that they found a lot of the solutions that do address these problems including reducing synthetic pesticide. The use of genetic engineering is a prevalent option. He states that “Emmanuel Charpentier, French scientist who has done research at the Max Planck Institute in Germany. With the scientist from the University of California they developed breakthrough gene editing technology. Essentially it works by removing undesirable DNA from a crop so that it responses to weather changes better by making it more resilient as an example. What people generally known as GMO (genetically modified organisms) uses ‘transgenesis’, which combines DNA from multiple organisms to improve them in a desired way. Now gene editing is the is newest of the new what we have there and what we can do in solving food production problems. The technology is quite amazing, you can make nuts that don’t cause allergies for people who have nut allergies, you can make gluten-free wheat, you can make all the crops more resistant so that they need less water and so on. As a result of that and what you end up with is you produce more food with less resources and I think that’s the amazing story of humanity in a way, because if you think about it, even though we have virtually used up all the available land for agriculture, this technology not only allows us to feed a growing population, but do so with less resources and on lass overall land. I think that’s truly amazing that we have the technology to produce food that is affordable, safe, and reliable, and I think that’s the route we should go down unfortunately right now that’s still restricted by legislation, but I see some positive input coming from EU of people who want to change that.”

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