What is behind the Sunday closing of Hungarian retail stores?

Since this coming Sunday will be the first time most larger retail stores will be closed by law, let’s return to one of the most politically foolish and economically harmful decisions of the Orbán government.

I already wrote two posts on the subject, both in late 2014 when the Christian Democratic Party (KDNP) once again floated the idea. Once again, because this was not the first time that KDNP pressured the Orbán government to curtail the liberal retail store hours that have existed in Hungary for the last twenty years. In 2011, when the idea was first proposed, Viktor Orbán wisely rejected it, saying that the Hungarian economy couldn’t afford the luxury.

But in early November 2014 the KDNP leadership returned to its favorite hobby-horse. This time, learning from the 2011 fiasco, they decided to turn in their bill in the form of a proposal by an individual member of parliament. In 2011 it was the government that vetoed the suggestion for economic reasons, citing the results of an unpublished impact analysis. When an individual member of parliament submits a bill, however, no impact study is necessary.

The initial reaction of government members, Fidesz leaders, and Fidesz MPs to the KDNP proposal was negative. Mihály Varga publicly voiced his opinion that “‘the move wouldn’t be wise.” Lajos Kósa, another heavyweight in the party, was also against the bill. So was Miklós Seszták, minister of national development. Initially, even Viktor Orbán was unenthusiastic about the idea. In one of his radio interviews he admitted that he himself shops on Sundays and added that he “is not planning to influence the behavior of the people, who can decide for themselves what to do on Sundays.” So, by mid-November most commentators believed that the KDNP proposal was dead in the water. If the government vetoed the KDNP proposal in 2011, how could Fidesz possibly agree to it “in such sensitive times, after the internet tax affair when there are demonstrators against [the government],” a member of the governing board of Fidesz asked.

Great was the surprise when less than two weeks later, on December 1, 2014, Népszabadság learned that the full Fidesz caucus and naturally the prime minister now enthusiastically endorsed the zany plan of KDNP. Viktor Orbán’s abrupt change of mind was especially strange because initially he wanted to see an impact study and no analysis was produced in the interim. Orbán within two weeks became such an enthusiastic supporter of the measure that he paid a visit to the Fidesz parliamentary delegation and twisted the arms of his troops in parliament. By early December the government parties gave their unanimous blessing to the measure. Since then they have been tinkering with it with scores of amendments which at times loosen, at other times tighten its grip on retail stores.

Fidesz brain / Closed on Sundays too

Fidesz brain / Closed on Sundays too

Although it was always pretty clear that the majority of Hungarians were against the Sunday closings, since March 13th we know how strongly people feel about KDNP’s idea. Ipsos conducted a poll which showed that 64% of the population want stores to be open and only 32% are for store closings. Ipsos broke down the data on the basis of sex, cities and towns versus villages, young versus old, and interestingly enough the differences were not substantial. In fact, there were some unexpected results. For example, people living in villages opted for keeping stores open on Sunday in higher numbers (70%) than people in Budapest (62%). Clearly, the measure is not popular. Just how unpopular it is we don’t yet know, despite the appearance of the poll, because last Sunday was a national holiday and the stores would have been closed anyway. But this coming Sunday, the people who missed the news will be greatly surprised when they travel to their closest supermarket and find it locked up. The song that is spreading like wildfire on YouTube expresses people’s sentiments about the Sunday closings. It was written to the tune of the internationally known song “Gloomy Sunday,” from the 1930s.

Opinions about why KDNP was so eager to change the law vary. Some people believe that since it is a religious party (and here and there even call the leaders bigots) it wants Hungarians to go to church instead of to the mall. Others interpret the move as an attack on multinationals in favor of the one large Hungarian chain that is made up of family-owned franchises, most of them small enough not to be affected by the new law. The latter theory might explain why Viktor Orbán eventually decided to support the KDNP proposal. After all, he wouldn’t at all mind if the foreign supermarkets and large chains simply abandoned their businesses in Hungary. Such an outcome would benefit his favorite oligarchs, who could purchase their stores on the cheap. These hypotheses may reflect KDNP reasoning, but I don’t think either fully explains why the prime minister changed his mind and decided to endorse the KDNP bill.

A few days ago another theory emerged, presented by a “senior researcher” of the political think tank Policy Agenda, which I found utterly unconvincing. There is nothing “sinister” or “complicated” behind this decision, he explained. After all, KDNP is a coalition partner. They have had many demands that were not satisfied by their larger partner. So, it was time to throw them a bone. First of all, it is not true that KDNP’s demands have been ignored in the past. Just think of the increased subsidies for parochial schools, the incredible number of gymnasiums that were passed into the hands of the Catholic Church, and the decision to make religious education part of the regular school curriculum. Second, this is not how political decisions are reached. Would Viktor Orbán for such a trifling reason assume substantial political risk? Unlikely.

My own theory is that the Christian Democrats, realizing Fidesz’s rapid loss of support and the decline in Viktor Orbán’s popularity, decided to put pressure on the prime minister, most likely accompanied by a threat. KDNP has 23 votes in parliament, which can be withheld at any time. I wouldn’t be at all surprised if the KDNP heavies told Viktor Orbán that it is either Sunday closings or no parliamentary support from the Christian Democrats on certain key issues.

As of this morning we know what was in the impact studies of 2011, which were leaked to Népszabadság. Pretty much the same negative results that trade unions and trade associations have predicted since the bill resurfaced last November. There will be a loss of 10,000 to 15,000 jobs. This can be translated into a 2.3 to 3.4 billion forint expenditure for the government in the form of unemployment insurance. About 26 to 27 billion forints would be lost annually in income taxes and social security payments. Expected lost sales for the companies would be 20.4 billion forints. VAT collections would drop by about 7.6 billion forints. All told, the Sunday closings would cost the Hungarian government 43.9-49 billion forints. That’s a steep price for Fidesz to pay to accommodate KDNP and a heavy burden for the Hungarian taxpayers to bear to keep the Fidesz-KDNP government in power.

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Zsolt
Guest

hearing this story I always loose my mind…
this is crazy and incredible annoying

I do understand (willing) KDNP is wish to protect the workers but then check the employer, if they are paying according to the law…

but how comes
– they are limiting a market?
– they want to rule what the people do on sunday?!?

on ATV Online have seen an “interview” with Bence Rétvári… he was insisting this is all right; as the shops are closed on Sunday in Austria as well…
And this is an answer from a Minister (or so…), just wondering if he got his 2/3 in Austria or in Hungary?

Anyhow.. the Nation is still supporting them, so this is all right.

but… to be honest I am the stupid I am following what in Hungary happens

csabai
Guest
Why would KDNP behave as a real party with its own demands when in fact it’s not much more than a marketing tool for Fidesz? KDNP is not even measured in polls, it’s so irrelevant as a party. KDNP’s sole purpose is to provide “real” Christian credentials for Orban as some 5-10-15% of the voters (a small, but substantial constituency) are actually churchgoing folks for whom these credentials are the most important. If anything, KDNP politicians are even more loyal to Fidesz and Orban than average fideszniks. I don’t think KDNP had demands of its own and secondly I don’t buy that Orban got afraid of KDNP. My theory is that Orban deliberately wanted to cause some (further) pain to foreign retailers (Tesco, Spar, Auchan, ALDI, Lidl) and help the CBA chain (which is mostly exempt), plus he wanted to improve the trade and C/A balance by decreasing consumption a huge portion of which is import. The fact that Hungary will lose tax substantial income has no relevance to Orban whatsoever, in his mind only weak, eternally loser conformist Socialists would care about lost revenues. Let’s remember that Orban by redistributing the tobacco retail business to his cronies is personally… Read more »
An
Guest

I think Eva is right; KDNP must have thrown its “weight” around to push this through and it is very likely that this weight is the 23 votes Fidesz needs in the Parliament. It doesn’t matter if they are a minuscule party that only got in there because of Fidesz… right now they are there, and Fidesz needs their votes in their voting machinery.

I’d love to know, though, how this match between Fidesz and KDNP came about in the first place. Orban many times was so supportive of KDNP initiatives that I wonder if they have something else over him that makes them so powerful (despite being a practically non-existent political party). Orban is not faint-hearted when it comes to dismantling a coalition partner after it served its useful purpose (see the case of the small holder party), so how come Orban didn’t take care of KDNP yet?

Member

I agree with csabai on this.

Additionally, I think Fidesz embracing this draconian step is based, yet again on personal greed. It took time for them to look though their prism of: how can this personally enrich ‘us’, the Orban inner circle, eventually they saw the opportunity.

Close out completion by creating funnel shaped laws, driving business to CBA grocery stores with additional absurd exceptions: horticulture markets, fuel and timber shops, grocery stores in towns by lakes.

Crass early adopters I.e. Orban’s son in law István Tiborcz, with prior knowledge of the new laws, rushed in to buy marina’s on lake Balaton, with options to either buy into the CBA franchise or launch a new rival to Tesco.

I think this hi-lights the deeply cynical opportunist ethos than runs through Fidesz.

Ultimately, it’s not about shopping on Sundays; it’s a good illustration of Orban’s machine:- how to get rich at the expense of the population, any way they can, while they can.

Guest

It is the second time that the satirical version of Gloomy Sunday, lamenting Orbán’s Sunday shop closure, is included in a post. It is fully deserved. The choice of the melodi and the paraphrasing of its original text will hit very hard, because the original is known to most Hungarians as the Suicide Song. Composed in the nineteen thirties it is reputed to have driven hundrets of people to suicide, even more than “the first modern novel” Goethe’s “Leiden des jungen Werther”.
http://www.phespirit.info/gloomysunday/

Annoyed
Guest

even the nonstop closes at 10 now. it’s terribly inconvenient.

i’ve noticed that a lot of the stores that were open until 8 or 9 are staying open until 10 to make up for losing Sunday.

HiBoM
Guest

I once worked for a guy that ran an institution as his own private fiefdom. And essentially, his will prevailed in all matters. And we all noticed that on occasions, he would take a perverse pleasure in ramming home a completely inconvenient or pointless decision against all opposition, because it proved and confirmed his omnipotence. It is one of the symptoms of megalomania. So, I’m not remotely convinced by Eva’s explanation that Orbán was blackmailed by the KDNP. After all, he appointed their MPs himself and I see no evidence that the KDNP thinks of itself as a separate independent entity. No, I think this is Orbán enjoying the fact that he can force through a measure against the resistance of his minions and I suspect it gave him, possibly quite literally, a huge erection for having done so.

exTor
Guest

Megalomania amongst politicians? The likelihood is quite good when one speculates about the likes of Viktor Orbán.

With respect to the mandating of Sunday closures, the reason may be more complicated than that of simply favoring the KDNP. Whatever the real reason, I doubt that Fidesz would have embarked upon something that could result in a lot of grief [read: public backlash] when weighed against potential minimal benefits.

Whatever Orbán may be, he is not delusional. The plus/minus analysis (such as it may have been) had been done and the law was brought to life. It remains to be seen what kind of death (if any) will ensue.

I’ve been in Csepel since late 2010 (with a year back in Canada) and I am lacking in much knowledge with respect to Hungary and its politics. Is Viktor Orbán legally precluded from seeking a fourth term in 2018?

If something goes terribly wrong for Fidesz between now and 2018, and the party decides to jettison Orbán because he has become (in its estimation) a political liability, can Fidesz win without Viktor Orbán?

petofi
Guest

Right on the money, HiBoM.

spectator
Guest

Quite right, you both!

I have the distinct feeling that it even worse, this is part of the “breaking in” process, when the one in power keeps on imposing absurd demands and step by step breaking down all the resistance, rendering the masses to humble endurance, besides of all the above true too.

I really curious, that the people truly numb already or this madness is still under the threshold limit?

buddy
Guest

“Ipsos conducted a poll which showed that 64% of the population want stores to be open and only 32% are for store closings.”

I think it’s important to point out here that this poll happened because somebody clever came up with the idea of crowdfunding its cost on Indiegogo. It was funded last month, and they only needed 221 backers. Without this campaign, it’s likely that we never would have known how the population felt about this issue.
http://www.indiegogo.com/projects/kozvelemenykutatas-a-vasarnapi-nyitvatartasrol

I love the idea of using the Internet to connect dispersed civic-minded people and allow them to test government ideas and proposals. I hope there will be more of these kinds of initiatives in the future.

Member

I don’t think either that the KDNP has any powers over Orban.. I can’t imagine Semjen contradict to his idol. KDNP has this identity crisis. They are a Christian party so they are supposed to influence the legistlation accordingly, like bringing up the abortion regulations. But they can’t … So they are like a frustrated spouse to Orban. When they start talking too much buy them a diamond ring to shut them up. Pathetic bunch …

Member

The internet meme machine is of course in full overdrive over the MTV1 blunders.

Somebody wrote this on Facebook: “This is Örkény’s and Hofi’s country. If they start laughing at you, your days are over.”

Amen to that.

(Istvan Orkeny was a playwright. He wrote a bunch of grotesque, very funny, short novels. Geza Hofi was probably the greatest Hungarian standup comedian.)

googly
Guest
I think there’s a good chance that Orbán made this decision to boost the tobacco stores, which are probably not doing as well as the Fidesz-supporting owners were promised, despite being able to sell far more goods than originally declared (though I’m guessing that the original proposal was meant to dissuade those not in the know from even applying for licenses). Those stores are able to stay open 24 hours, selling more than just tobacco products, whereas now even small “non-stop” shops mostly have to close (how many owner-operators are willing to stay up all night to run their own shops?). I don’t buy the idea that this new rule was meant to hurt the large foreign-owned stores, since they will now avoid having to stay open on Sunday when there was anyway less business, but the employees earned more. Traffic was horrendous here in Budapest on Saturday, since everyone who would’ve liked to shop late at night or on Sunday now has to go out on Saturday. That means that the large stores will lose very little business, but their costs will go down (not just the extra Sunday pay, but fewer workers overall and less spent on utilities… Read more »
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