Hungary faces business pushback over planned halt to non-EU worker visas

Hungary’s new government is facing growing pressure from businesses and industry groups to reconsider a planned suspension of visas for workers from outside the European Union, with warnings that an abrupt ban could strain output in an already tight labour market.

Prime Minister Peter Magyar’s Tisza party, which ended Viktor Orbán’s 16-year rule in a landslide election victory on April 12, has said it intends to stop issuing visas for non-EU workers from next month. The party argues the policy is aimed at protecting domestic employment, Caliber.Az reports via foreign media.

“We will not allow foreign guest workers to take the jobs of Hungarians and push down salaries,” Tisza said in its manifesto, a position that has raised concerns among major foreign investors operating in the country.

Business leaders and staffing firms, however, caution that Hungary’s economy remains heavily reliant on foreign labour in key sectors, including manufacturing and services.

The regional head of staffing firm Randstad warned that an outright ban could create structural labour shortages.

“An outright ban on workers from outside the EU would not be viable in the long run,” said Sandor Baja, Randstad’s managing director for the Czech Republic, Hungary and Romania, noting that large swathes of Hungary’s workforce are set to retire in the next decade.

“I sincerely hope that [economy minister Istvan] Kapitany’s team will allow economic rationality to prevail here,” Baja told Reuters on May 15.

Official data show foreign workers account for just 2% of Hungary’s workforce, significantly lower than in several other Central European economies. Unlike Germany, Poland or the Czech Republic, Hungary has not experienced a large influx of Ukrainian refugees that could help offset labour shortages.

However, business representatives say dependence is much higher in specific industries. Akos Janza, president of the American Chamber of Commerce, said foreign workers—both white- and blue-collar—can make up to 20% of staff in some companies.

“We have a member company, which would have to cut a full shift ]without guest workers],” Janza said on May 15, adding that the firm operates in manufacturing, a key sector in Hungary.

Randstad’s Baja added that while there is untapped domestic labour potential, it is limited by structural constraints. He noted that younger workers under 25, those over 55, and residents of smaller towns could represent a pool of around 400,000 people, but mobility barriers restrict their participation.

Robert Keszte, head of the German business chamber in Hungary, also warned the proposal could have significant economic consequences.

“In our view, the Hungarian economy cannot currently function without workers from third countries [outside the EU],” he said last week.

By Sabina Mammadli