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How Hungary and the V4 countries can benefit from a post-COVID-19 green economic recovery

A new analysis produced by the award-winning global economics consultancy Cambridge Econometrics shows that Hungary and the Visegrád countries can benefit from five key tools for a post-COVID-19 green economic recovery.

“The pandemic offers both the UK and Hungary a historic opportunity to build back better and the transition to net-zero is an essential component of that,” said British Ambassador Paul Fox opening an online roundtable event hosted by the British Embassy of Hungary and whose attendees included Hungarian decision-makers representing the Ministry of Innovation and Technology, the Hungarian National Bank, the Hungarian Energy and Public Utility Regulatory Authority and the Budapest Stock Exchange.

“We look forward to working with Hungary and its V4 Presidency to harness the benefits of this transition in areas that are key for a green economic recovery,” the Ambassador continued. “Hungary has already passed a significant milestone by announcing its accession to the Powering Past Coal Alliance earlier this month and we will continue to offer our support and expertise in other areas where it is forging ahead, such as green finance, smart cities and energy innovation.”

The white paper, based on the analysis of existing government policy measures and programmes for green recovery, showed that green, sustainable solutions lead to greater economic growth and also create more jobs. Indeed, across Visegrád countries, jobs lost due to the pandemic are largely concentrated in low-skilled sectors. In Hungary, this observation is even more applicable, as losses in low-skilled service, sales and elementary occupations amount to 117 per cent of net losses (by comparison, in Slovakia the net loss in these occupations is 76 per cent).

Overall, the COVID-19 pandemic is expected to cost the EU between 8 per cent and 9 per cent of GDP, with around half of that being made up by 2030. Based on separate economic modelling analyses for the UK, for EU member states and for the Visegrád countries, Cambridge Econometrics presented five tools for the green relaunch of the economy, which would benefit Hungary in the short- and long-term recovery from COVID-19.

First, public investments in energy efficiency, which have an economic recovery effect primarily in the short term and also serve to create jobs. Secondly, increased subsidies to expand solar and wind energy, which could reduce emissions across Europe. Moreover, the energy networks must be modernised making them suitable for the greater use of alternative energy. A new car programme that encourages the purchase of electric vehicles only must be implemented as it would have the biggest impact on economic growth. Finally, the paper underlines the importance of tree planting and forestation programmes which would primarily create new jobs in this area.

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