Mercedes-Benz launched production of its new compact CLA Shooting Brake at Kecskemét, central Hungary, on Tuesday, with Viktor Orbán, the prime minister, driving the first car off the assembly line into the media spotlights as part of the celebration.
“When I was a boy, we had a saying about having an egg every day: here in this factory, they have a new model every year,” Orbán said as an introduction to his address to the gathering of Mercedes-Benz glitterati and employees. “As I’ve heard, there are very few plants where you have a new model every year,” he quipped. Read more
Those who relish irony will have found much to savour in the Swiss central bank’s actions on Thursday when, as Mohamed El-Erian comments, we were reminded of the dangers of substituting financial engineering for real economic reform.
The choicest item is the way that Hungary’s authorities have emerged, as analysts at Commerzbank put in on Friday morning, looking like “financial experts of the highest calibre” – not an opinion often heard on financial markets. Read more
This is what happened to the Hungarian forint and the Polish zloty, measured against the euro, after the Swiss central bank abandoned its currency peg on Thursday.
Source: Thomson Reuters
It’s early days in 2015 but already there is positive news on Hungary, at least according to official government sources. Fresh jobs data reveal “the number of people in employment up by some 200,000 year-on-year” the economy ministry boasted this week – erring modestly on the positive side (the actual figure was 188,000). Meanwhile, Gyorgy Matolcsy, governor of the central bank, has been busy lobbying for an upgrade of the country’s credit ratings.
Hungary, he told MTI, the state news agency, is currently on a “stable and predictable path” as a result of the changes in economic policy implemented (in large part by himself as then economy minister) since 2010 – the year the Fidesz government of prime minister Viktor Orban regained the reins of power. Read more
By Timothy Ash of Standard Bank
A new initiative by the government of Viktor Orban in Hungary appears to be “right-sizing” the country’s banking sector, boosting its efficiency and cost effectiveness as a means to kick start lending. The agenda also appears to be to promote the development of a domestically owned banking sector – 70 per cent domestic ownership is being targeted. To achieve this, state ownership is being promoted as a short term measure to help deliver on the longer term plan.
Reviewing this programme, the obvious question is, what are the Hungarian authorities trying to achieve? Read more
Airline passengers to Hungary, be warned: Budapest’s Liszt Ferenc International airport is having its Woodstock Week, with anything from 200 to 250 youths – with associated rucksacks, tents, sleeping bags and tin pots – camping out in the terminal every night since Sunday awaiting flights.
“We expect them to be here for three to four days. They’ll be gone by the end of the week,”” Mihaly Hardy, airport spokesman, told beyondbrics. Read more
Hungary’s economy expanded by 3.9 per cent in the second quarter of 2014 compared with the same quarter last year, helped by strong performances in the manufacturing and construction sectors, according to preliminary data from the statistical office released on Thursday.
Coming on top of growth of 3.5 per cent in the first quarter, the latest data indicate first half growth of 3.7 per cent, although this could be adjusted once the detailed data are available in early September. Read more
Under communism, it was the norm for state companies and institutions in central Europe to own holiday homes: come summer, reluctant and poorly paid comrade workers could enjoy the proletarian splash with one another from the Baltics to Burgas.
But after 1990, as managers sought to focus on core activities in the drive to a market economy, such real estate was mostly divested – often at attractive prices to those in the know.
Now, guess what? The company resort is making a comeback – at least in Hungary, where local weekly hvg has unearthed a story that the central bank (MNB) is buying up property for the good of its very own staff. Read more
A long-running dispute between Croatia and Mol, the Hungarian oil and gas company, over control of Ina, Mol’s Croatian counterpart, has flared up again.
Zagreb is seething over a statement issued by Mol after talks on Friday which said the latest round of negotiations had achieved precisely nothing. The ministry told beyondbrics the Mol statement was “a lie” and threatened to publish a recording of the negotiations unless Mol withdraws it. Read more
Hungary’s government said on Thursday it had agreed a deal to buy MKB, one of the country’s largest commercial banks with more than 80 branches, from BayernLB, its German owner. The state will pay €55m for MKB and BayernLB will waive claims of €270m in receivables.
The deal marks what Mihaly Varga, Hungary’s economy minister, said was “the first step” in increasing Hungarian ownership of the country’s commercial banks. Viktor Orban, prime minister, has long insisted that he wants to see “at least” 50 per cent of the Hungarian banking system in domestic hands. Read more
The National Bank of Hungary (MNB) surprised the markets on Tuesday by lopping 20 basis points off its policy interest rate to leave it at 2.1 per cent a year, a new record low.
But Gyorgy Matolcsy, central bank governor, said Tuesday’s cut marked the end of the bank’s two-year cutting cycle. Read more
As Argentina’s sovereign debt soap opera dragged on, this week saw another legal judgement on toxic debts running into billions of dollars.
Yet while the ruling by Hungary’s supreme court on foreign currency mortgages could cost banks up to €3bn, the full implications are still to be fleshed out. One possibility is the retroactive rewriting of contracts – partially bailing out homeowners who took a failed punt on exchange rates. Read more
Central and Eastern European local currency bonds lifted following a widely-anticipated move by the European Central Bank to cut key interest rates in a bid to anchor the eurozone’s tentative economic recovery.
The confirmation of cheaper money across the continent sent investors searching for riskier assets, further pushing down yields on Turkish, Hungarian and Polish bonds which have rallied over the last month. Read more
Manufacturing in central Europe’s leading economies continued to grow in May, with PMIs in Poland, Hungary and the Czech Republic indicating continued expansion, although Poland appeared to show some impact from declining exports to Russia and Ukraine due to the fraught political situation in those two countries. Read more
As the European Central Bank (ECB) teases investors with hints of monetary stimulus measures, expectations of a rate cut are already helping boost appetite for emerging market debt on the continent.
Yields on Hungarian forint bonds dropped yesterday following a heavily oversubscribed bond auction, and since the start of the month Polish and Romanian local currency bonds have also rallied. Read more
Viktor Orbán, the Hungarian prime minister now beginning his second successive term in office, named his cabinet on Thursday with seven out of 10 ministers maintained in a government that is expected to emphasise continuity.
“Out of the 10 ministers named today, seven are the same as in the (previous) Orbán government [so] the prime minister has kept his promise: the government will simply continue what they were before the elections,” Tamás Boros, director of Policy Solutions, a Budapest political think tank often critical of the government, told beyondbrics. Read more
It goes on, and on… and on. Hungary’s central bank trimmed its base rate once again on Tuesday – this time by a third consecutive reduction of 10 basis points – to leave the key rate at 2.4 per cent.
The latest move, largely priced in by the markets, means the bank has cut the rate by 460 basis points since its cycle of easing began in August 2012. Read more
By Ferenc Kumin of the Prime Minister’s Office, Budapest
With voting under way in elections to the European Parliament, many are worried that eurosceptic parties will have a big day when the results come in on Sunday, with gains for parties at the fringes of European politics. The ballot once again raises issues that are fundamentally about broadening versus deepening integration; about further centralisation versus challenges from proponents of a “Europe of nations”.
There is a difference, of course, between being fundamentally sceptical of the European project and promoting alternatives to some of its supposed orthodoxies. Some critics have put Viktor Orbán, Hungary’s prime minister, in with the most ardent of Europe’s detractors, claiming that he is not a true believer in the grand European project.
This is pure nonsense. Read more
Almost ten years to the day after its first flight, Wizz Air, a low-cost airline centered on central and eastern Europe (CEE), said on Thursday that it plans to raise €200m by listing on the London Stock Exchange in June to raise funds to expand its operations.
Jozsef Varadi, Wizz Air chief executive, speaking via video to a press conference in Budapest, said Wizz Air Holdings, the parent company based in the Channel Islands, would use the cash to strengthen its balance sheet and expand operations.
The airline sees considerable potential for further growth in its core CEE market, given that the ‘propensity for air travel’ in the region is currently just 0.36 seats per capita, compared to the western European averages of 1.58 seats per capita. Read more
While the government in Kiev tries in vain to pacify the pro-Russian military uprising in the eastern regions of Ukraine, new challenges are arising in the far west of the country. The 150,000-strong Hungarian minority of Transcarpathia region is demanding more rights – including greater autonomy and dual citizenship – and Budapest is supporting them against Kiev.
On Friday, Viktor Orban, the Hungarian prime minister, said that ethnic Hungarians in neighbouring Ukraine should be given political autonomy. “Ukraine can be neither stable nor democratic if it does not give its minorities, including Hungarians, their due. That is, dual citizenship, collective rights and autonomy,” Orban said. Read more