The burdens involved with preparing for the honor of being “European Capital of Culture” in 2010 seem to have gone to the heads of the people charged with developing the local economy in the southern capital of Pécs. One sign is the increasingly dodgy maneuvers being made to come up with the cash needed to spiff up the city for the hordes of tourists and Euro-dignitaries expected during the Big Year. For example, the city is now saying that it will sell off some of its properties to its own asset management company – one PVV Zrt – which will borrow the money for the deal, thus temporarily sparing the municipality from directly taking on more debt. Then there is the proposed “Pécs Card,” not pictured at left.
While not directly related to Pécs 2010, the idea seems to be even more dubious than the asset-shuffling, off-balance-sheet borrowing and other schemes going on in advance of the city’s Big Year.
According to hirado.hu, the plan, which is being pushed by the municipal government and the Pécs-Baranya Chamber of Commerce and Industry, is to issue cards that would provide “points” to consumers who did their shopping at selected locally-owned business, who are “overwhelmed by international companies.” The card is expected to be introduced by 2010 at the latest, and issued to nearly 70,000 local households.
It’s hard to even know where to start in taking apart this crazy idea. As much as Hungarian consumers love collecting and redeeming such bonus points, its hard to imagine getting locals to quit patronizing the hypermarkets and other “foreign” retailers they think offer better value, unless the incentives are very attractive. And if the local stores are unable to offer better value to their customers on a day-to-day basis, what can they offer in the way of extra incentives? Buy two items here for 20% more than you’d pay at Auchan, and get a third for 10% off? Or buy two items here for 20% more than you’d pay at Auchan, and get 10% off for something similarly overpriced at another locally-owned store?
Instead, one can’t help suspect that the objective here is to drag the local government into some sort of backdoor subsidy scheme for local businesses that can’t compete (i.e., buy two items for 20% more than you’d pay at Auchan, and the government will give us 10% off our property tax bill).
Meanwhile, what’s really crazy about this scheme is that it is timed to coincide with Pécs 2010, which is supposed to be about reminding everyone how “we’re all Europeans” – and encouraging people from the countries where these hated international retailers are based to visit and spend money in Pécs.
Best/worst of all, the same people who are behind this “screw you other Europeans” initiative are also busy finding ways to draw as much in the way of EU funding for Pécs 2010 as possible. One might even suspect there is a proposal out there to get EU funding to pay for the “Pécs card” scheme, meaning the very retailers that are being officially penalized for being non-local would be paying for their competitors’ customer loyalty program. Then again, since they probably are already paying more than their fair share of taxes, they already are.