Hungary to abolish Sunday shopping ban as referendum spooks government

Hungary to abolish Sunday shopping ban as referendum spooks government
The law closing shops on Sunday's has infuriated Hungarians
By Blanka Zoldi in Brussels April 11, 2016

The Hungarian government has submitted a proposal to abolish the country's ban on Sunday shopping, officials told on a press conference on April 11. The move comes less than a week after the opposition got the go ahead to press on with a referendum effort.

The decision comes after the opposition Hungarian Socialist Party (MSZP) was given the green light to collect signatures for a referendum calling for the controversial law, which has provoked significant anger, to be scrapped. Although Fidesz comfortably leads opinion polls, and the 2018 general elections are still far away, the populist party seems ready to tear down even its flagship measures rather than face a dent in its support. The move comes as the government is also under pressure from large protests against its education policy.

It's not the first time Fidesz has stepped back from plans in the face of unpopularity. The government scrapped a plan for an internet tax in 2014 when it sparked protests that rocked Budapest. As then, the ongoing demonstrations by teachers have spurred activists into general demonstrations against the ruling party. The government announced last month it will close the widely criticized state authority overseeing public education.

The shopping ban, which restricts retailers with over 200 sqm of retail space from opening on Sunday was passed by the ruling Fidesz party in December 2014. According to local pollster Ipsos, 68% of Hungarians opposed the move as it was pushed through parliament by Fidesz' large majority. The move to quash the legislation is being rushed through, with parliament due to vote on the amendment on April 12.

Little has changed, apparently, save for the government's sensitivity. Public dissatisfaction is the reason the Sunday shopping ban will be revoked, according to Antal Rogan, head of the Prime Ministerʼs Cabinet Office. He said that although most of the goals of the legislation have been met, most voters are still not convinced that the law is beneficial.

The move is surprising given that several Fidesz politicians have recently defended the law. Just ahead of the announcement, Economy Minister Mihaly Varga claimed that the goals of the legislation have been met.

Since the law came into force in March 2015, turnover in the retail sector grew by 5.6% and the retail sector added 300 new jobs. According to Varga, it is "no surprise" that the turnover in larger stores declined, but that smaller shops boosted turnover. Many claimed that the ban was part of a campaign to curb the large international retailers that dominate grocery sales in Hungary to the benefit of local groups, many of which - such as Coop - are said to be close to Fidesz.

Prime Minister Viktor Orban even suggested recently that the Sunday shopping ban could be extended to other sectors. However, the PM has a strong track record of pragmatic policymaking, which opens him up to criticism.

"If the government states that public opinion is important, why hadn’t they taken into account the opinion poll results before?," asked Robert Laszlo, an analyst at the Political Capital Institute pointed out to bne Intellinews.

Fidesz’s decision is rather a simple political cost-benefit analysis, he suggests. Although it's uncomfortable for Fidesz to back track on one of its flagship measures, showing it is afraid of facing a referendum, the Sunday shopping ban will be long forgotten by the 2018 elections, he notes.

“According to the worse scenario, MSZP’s referendum would have shaped the public discourse for many months, and it would have given the chance for the party to re-emerge and present itself as an active opposition party after six years without any powerful programmes," the analyst summarises.