(Bloomberg) --

Hungary’s government pledged to slash funding for political parties and hike taxes on banks in its first major budget overhaul since Prime Minister Viktor Orban secured powers to rule by decree this week.

Political parties will lose half of their state funding this year while other steps will increase the burden on lenders and reintroduce a tax on larger retailers, Gergely Gulyas, the minister in charge of the Prime Minister’s office, said in a video briefing Saturday. The steps will increase funds available to fight the coronavirus pandemic and rebuild the economy to 1.35 trillion forint ($3.96 billion), he said.

Orban has faced accusations of staging a power grab made under the cover of the Covid-19 crisis and drawn criticism from European Union member states. The measures announced on Saturday echo contentious steps initiated by Hungary a decade ago to contain a budget crisis.

About 30,000 have lost their jobs in Hungary as a result of the crisis, with 4,000 new unemployed appearing each day, Gulyas said. The government will announce additional budget measures amounting to 18%-22% of GDP on Tuesday, which will be accompanied by central bank steps, he added.

Gulyas didn’t elaborate on how the government will collect a planned 55 billion forint in additional revenue from banks. Lenders have called for a reduction in the bank tax to help mitigate the impact of a moratorium on all loan payments this year.

“The government is initiating a significant reorganization of the budget, and will force others to contribute with burden sharing,” Gulyas said. “This includes political parties, international firms, banks and municipalities.”

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