By Marton Dunai
BUDAPEST (Reuters) - Hungary will expand its government-subsidized scheme for shorter working hours to help firms weather the economic downturn caused by the coronavirus pandemic after business leaders complained the measures were too narrow in scope, a minister said.
On April 6, the government announced a stimulus package amounting to 18%-20% of GDP - around 9.5 trillion forints, or $30 billion - to help jump-start the economy which has been badly hit by the pandemic.
The package includes tax breaks, wage contributions and lending subsidy programs, as well as a Kurzarbeit scheme, based on a German model used to stop struggling businesses from sending workers home in exchange for job guarantees.
"We announced the shortened labour regulation last week... Now we will specify certain aspects so it is easier to take advantage of," Innovation and Technology Minister Laszlo Palkovics told Hir TV television in an interview late on Sunday.
Palkovics said the government had discussed the package with business leaders and would apply some changes early this week.
Some businesses have voiced frustration at the lack of the blanket cash handouts seen in other countries, and the Hungarian Chamber of Commerce has called on the government to help all companies affected by the crisis to retain workers through tools such as Kurzarbeit.
Palkovics said the government would extend to two years the time period during which businesses can require employees to put in the hours later in exchange for wages paid while work is suspended.
Prime Minister Viktor Orban's response to the pandemic -- to rule by decree indefinitely -- has been criticized in Europe, though Orban has said Parliament can revoke that power any time.
There is little clarity about the economic impact of the crisis. The central bank has said repeatedly that it still expects the economy to keep growing in 2020, while Finance Minister Mihaly Varga expects a 3% recession.
Orban on Friday said he would consider it a feat to keep the growth rate around zero.
Companies have hemorrhaged workers in the crisis, according to the economic research institute GKI, which said companies probably laid off as much as 60,000 people in March and a further up to 100,000 people could be laid off in April.
"Without fast and wide-ranging government help, the unemployment rate can reach 10%," GKI said in a report published on Sunday.
Hungary's last unemployment survey by the government's Central Statistics Office showed the jobless rate around historical lows at 3.5% in the December-February period.
** For an interactive graphic: https://reut.rs/3exsJHO
(GRAPHIC: Central Europe bracing for a rough 2020 - https://fingfx.thomsonreuters.com/gfx/editorcharts/qmypmrwrvra/eikon.png)