By Tamás Pesuth, Head of Economic Research, Nézőpont Institute
“Hungary is a small country, but it looms larger on investors’ screens.” So the Financial Times wrote at the beginning of February this year, while calling the governor of the National Bank of Hungary (MNB) “a maverick.”
As György Matolcsy marked his first year in office today, a more rounded appraisal of his work is required. The FT article looked mainly at the forint exchange rate and the low base rate in reaching its “maverick” judgement. Continue reading »
By Kim Lane Scheppele of Princeton University
Hungary was once the precocious child of post-communist transition, garnering praise for its political and legal institutions. But ever since the Fidesz government of prime minister Viktor Orban came to power in 2010 with a two-thirds parliamentary majority, Hungary has been on a legislative rampage, unsettling the legal order and causing “regulatory uncertainty” through “abundant and unstable new regulation,” as the OECD delicately put it. Continue reading »
By Attila Mesterhazy of the Hungarian Socialist Party
At the WEF in Davos, the renowned economist Kenneth Rogoff had encouraging words for Europe’s leaders: he argued that high levels of education, strong innovative capabilities and the rule of law provide the old continent with a solid, long-term basis for development.
In Hungary, unfortunately, it is these very values and traditions which Prime Minister Viktor Orban has most undermined in his disastrous rule of the past three and a half years. Continue reading »
Viktor Orban, Hungary’s prime minister, along with his Fidesz government, have been remarkably busy this week. They have been talking up a €10bn loan agreement with Russia, signed on Tuesday, to finance two new nuclear reactors, scheduled for completion as early as 2023.
Hungary is about to seal “the best deal for the past 40 years,” with nuclear power the cheapest option for the country, Janos Lazar, Orban’s right hand man in charge of the prime minister’s office told the media on Thursday. Continue reading »
If Hungarian bankers – already facing another year of heavy losses – thought things could not get worse, they just have.
Only days after Karl Sevelda, chief executive of Raiffeisen Bank International, more than hinted he was prepared to withdraw from some central European countries, including Hungary, due to the unfavorable business climate, the competition office in Budapest on Wednesday announced fines on 11 commercial banks totaling Ft 9.5bn (€32m). Continue reading »
By Gordon Bajnai, former prime minister of Hungary
In a recent radio interview Viktor Orban, Hungary’s prime minister, made a surprising confession. While speculating about the nature of the Hungarian electorate, he stated: “Hope is more important to Hungarian voters than fact.”
As he runs for re-election soon, is this his moment of truth? Is the one-time liberal, anti-communist dissident admitting that he is hoping that voters will decide based on hopes, rather than facts? Because the facts – most especially the economic facts – of the past three and a half years are not on Orban’s side. Continue reading »
It’s official! Viktor Orban, the nominally “centre-right” prime minister of Hungary and former anti-communist student dissident, wants to nationalise the energy utilities that were privatised by the “communists” in the mid-1990s.
Orban, or members of his circle have long implied it, but as the prime minister made it clear in his regular interview on state radio on Friday morning. Continue reading »
Wishes come true
Has campaigning already begun for Hungary’s elections in April next year?
News on Monday that the government is to repay in advance the remaining €2.2bn it owes to the IMF from its 2008 loan looks suspiciously like a political rather than an economical move. Continue reading »
By Enikő Győri of the Hungarian Ministry of Foreign Affairs
As a minister of state responsible for European affairs it is becoming increasingly difficult for me to read articles about Hungary without thinking of possible conspiracies aimed against my country, or suspecting the authors and the foreign politicians they quote of complete ignorance.
This is not because I am too sensitive to criticism but because of the gross distortions which I see in so many critical statements about Hungary. Continue reading »
It started off a possible good idea – at least to those who think a state monopoly is a good idea. The government of Viktor Orban, the new-idea-a-minute Hungarian prime minister, decided around Christmas that tobacco products would be sold only in government-franchised shops. Talk was of “helping create Magyar family businesses” while at the same time restricting the outlets for tobacco products, and thereby making it harder for Hungarian youth to catch the habit. Continue reading »
That'll cost you
Despite the Hungarian government trumpeting a turnaround in the economy of late and low budget deficit figures of the past two years, Mihaly Varga, the new pragmatic finance minister, seems to believe discretion is the better part of valour: with tax revenues looking somewhat anaemic this year, he announced a mini-package of tax increases on Monday to keep the deficit on track. Continue reading »
András Simor, the hawkish former governor of Hungary’s central bank who stepped down this month, has quickly found a new perch.
The European Bank for Reconstruction and Development announced on Wednesday that Simor would take a top job as vice president for policy, starting July 1. Based in London, he will be a comfortable distance from Budapest and his arch-critic prime minister Viktor Orbán, whose close ally, György Matolcsy, has been installed in Simor’s office at the central bank. Continue reading »
By Lajos Bokros, MEP and former finance minister of Hungary
Fidesz, the Hungarian ruling party led by prime minister Viktor Orbán, likes to call itself a centre-right, conservative group. It is a label often echoed in western media. ‘Centre-right’ would usually denote a party standing for private enterprise: regulated, yes, but otherwise freed from government interference and bureaucracy, able to channel innovation, effort and funding to create wealth for all in society.
But nothing could be further from the truth. Continue reading »
The Hungarian forint is under increasing pressure on Monday – shedding around 0.25 per cent against the euro to Ft 296.50 after depreciating last week. As website Index playfully put it, “[Economy Minister] Matolcsy has nailed why the forint’s been weakening” – it’s all down to foreign speculators. Or rather, one speculator in particular: Nouriel Roubini (pictured on the chart). Continue reading »
Mihaly Patai, the chairman of Hungary’s Banking Association, resigned on Tuesday, marking another twist in the long-running battle between prime minister Viktor Orban’s government and the country’s banking sector.
The move comes after parliament in Budapest passed legislation on Monday which reneges on an earlier pledge to halve Hungary’s controversial bank tax next year, while in addition doubling the new Financial Transaction Tax (FTT), set to be imposed from January 1, to 0.2 per cent of transactions. Continue reading »