Hungary: a little extra tax for the kitty
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 »
Hungary: Simor finds a safe haven
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 »
Guest post: the fake conservatism of ‘centre-right’ Fidesz
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 »
Forint falling? Blame Roubini!
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 »
Hungary: bank chief quits in tax dispute with Orban government
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 »
Guest post: Hungary’s plan for jobs
By Zoltán Cséfalvay of Hungary’s economy ministry
There is a consensus among politicians worldwide of the need to create jobs. The only question open to debate is exactly how to create them.
In the EU, job creation policies rarely make it into the headlines. There are twice as many people without work in the EU than in the US – 25m, a joblessness rate of 10.4 per cent, reaching almost 25 per cent in Spain. Yet politicians struggle when it comes to talking about jobs. Continue reading »
Guest post: Budapest is long on words but short on (effective) action
By Gábor Karsai of GKI Economic Research
There’s no doubt about it: the Hungarian government under Viktor Orbán, now half way through its four-year term, is expert at producing plans. On the economic front alone, we’ve had the Széll Kálmán Plan marks 1 and 2, both aiming to rein in the budget deficit and state debt while simultaneously boosting growth.
But the Orbán government has failed miserably when it comes to delivering growth or tackling the underlying structural weaknesses in the economy. Continue reading »
Hungary: a change of heart?
Monday is a sad day in many Magyar eyes – 4 June is the anniversary of the Treaty of Trianon, the post World War I agreement to settle central European borders that left rump Hungary short of two thirds of its former territories and large ethnic Hungarian-speaking minorities in most of the surrounding successor states.
Monday’s good news, 92 years on, is that the forint recovered somewhat from eurozone jitters that sent it momentarily it beyond Ft307 to the common currency on Friday. By Monday afternoon it had recovered to about Ft302. Continue reading »
Hungary: Schmitt falls on his sword
One of the thousands of jokes currently doing the rounds in Budapest goes like this. Qustion: what’s the formula for a doctorate in Hungary?
Answer: PhD = Ctrl+A + Ctrl+C + Ctrl+V
It refers to the scandal surrounding Hungary’s president, Pal Schmitt. The 69-year-old former Olympic fencer resigned on Monday amidst a storm of protest over claims he had plagiarised almost 200 pages of his 215-page doctoral thesis on the Olympic Games. Continue reading »
Will Hungary go it alone with a bond?
Hungary’s central bank held interest rates unchanged on Tuesday, making three straight months at 7 per cent, the highest among central European currencies. The move was more bland than buzz – fully in line with market expectations – and the forint remained unchanged after the announcement, at around 291.5 to the euro.
Instead, the buzz in Budapest is whether the government is serious about getting an EU-IMF credit line or, given the improved international sentiment, will go it alone and successfully tap the markets with a foreign currency bond issue. Continue reading »
Transparency throws light on the darker side of Hungary
Oh dear. No sooner had Budapest government officials on Wednesday convinced themselves (though surely not Brussels) that the European Commission had accepted “90 per cent” of the Hungarian replies regarding its concerns over the independence of the country’s central bank, than another damning report emerged.
This time it’s Transparency International Hungary (TIH) dishing the dirt. Continue reading »
Hungary: nobody understands us
The Hungarian government has to sort out the economy, find a solution to the indebtedness of both state and folk, and allow its multi-talented people to blossom. It has to do it fast, and against vested interests which are opposing this crusade. But the government will not be swayed from its course. All of which is something foreigners – including journalists – just don’t understand.
That, in essence, was the pre-Christmas message Viktor Orban, Hungary’s prime minister sent to his people, or at least his loyal followers, via a long interview in the pro-government daily Magyar Nemzet. Continue reading »
Hungary: crime and punishment
For a man facing the potential threat of criminal prosecution, Ferenc Gyurcsany, Hungary’s prime minister from 2004-2009, is a remarkably nonchalant chap.
“I’m absolutely [relaxed]. In the last 10 years I’ve been permanently and heavily attacked by my political rivals, mainly Fidesz. I’ve learned to handle, to wear this political burden. I can sleep well. I’m reading the famous Dostoyevsky book Bűn és bűnhődés, what is that in English? [Crime and Punishment],” he tells beyondbrics. Continue reading »
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