Who Let the Dogs Loose in Hungary: Dire Straits


The answer is simple: Fidesz, the party that has been in power for 1 year and 1/2 now.

I have visited Hungary and the Hungarian Parlament three weeks ago.
Deputies of both parties were in full session, and procedures seemed to follow the normal course.

FIDESZ President and his Fidesz deputies are doing a good job, in trying to keep the debt down to 110 Billion $, which is a lot of debt for a little country.Unfortunatelly, the Socilaist, who were in power for 8 years before 2010, have indebted Hungary over its head, high unemployment, and low salaries for working people.
Parlamentarians will be cut down, that is trimmed down to only 200 within Fidesz alone. The country is in a big financial crisis, in need for IMF funds. The forint has hit rock bottom.
. Now the Fidesz will have to ask in its hands and on its knees for a new loan, as it has problems paying its monthly bills.I am quoting from the Financial Times analysts:

Hungary tests nerves as the Forint slides
By Stefan Wagstyl
Hungary is testing investors’ nerves to breaking point as the government struggles to square its economic policies with financial reality.
The forint on Thursday morning touched a record low against the euro of Ft324 after domestic yields in Budapest hit crisis levels. The government had to pay 9.96 per cent in a bond swap auction for one-year paper while the yield on 10-year bonds rose to 11.34 per cent.
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It was enough to force Viktor Orbán, the prime minister, into action – and start a retreat from his reluctance to ask the International Monetary Fund and the European Union for aid. At a hurriedly arranged press conference, Tamas Fellegi, the chief negotiator, pledged to seek a fast agreement with international lenders saying the government wanted to strike a funding deal “as soon as possible”.
Mr Fellegi explained Hungary would be prepared to sign a precautionary standby agreement with the Fund. Separately, János Martonyi, foreign minister, told the FT in an interview: “We are ready to negotiate about anything and everything. There are no preconditions on our side.”


furthermore, HU is the most vulnerable emerging market to date:

The forint ended at Ft319.7 to the euro, flat on the day and bond prices firmed.
But Hungary’s fight with the markets is not over. Mr Orbán has simply won a bit of breathing space.
With the currency down about 20 per cent since last summer, and foreign exchange debts looming large over the government and over private borrowers, the risks of a debt-driven financial meltdown remain at critical levels. Benoit Anne, a strategist at Société Générale, says: “Hungary is the most vulnerable country in the emerging markets universe at this point.”
Timothy Ash, head of emerging market research at RBS, said in a note: “Hungary will eventually conclude a new IMF arrangement this year – the only question is does it happen before-after a period of more aggressive market dislocation?”
Over the past three years, Hungary has stabilised its economy – notably in reducing fiscal deficits – since it was forced to turn to the IMF and EU in 2008 for a €20bn package. But Mr Orbán has boxed himself into a corner having declared in 2010 that Hungary would not need IMF help again.
More significantly, he has pursued policies that have irritated potential international allies – including a raid on private pension funds, special bank taxes and a move imposing on banks some of their clients’ losses on foreign exchange mortgages.
The EU’s objections focus on a central bank law passed last week that the central bank says threatens its independence. The European Commission said on Thursday that the EU would not start assistance talks until Budapest showed the central bank’s rights were not at risk.
Mr Orbán will not retreat easily. His ruling Fidesz party has a two-thirds majority and is overwhelmingly more popular than the fragmented opposition.
But the numbers are stacked against him. With government debt at 82 per cent of gross domestic product and total external debt (public and private) at 140 per cent, Hungary’s borrowing levels are similar to vulnerable eurozone states.
The government puts its 2012 borrowing needs at €15bn, including €2bn for the fiscal deficit. Bankers estimate the total external financing need – private and public – is about €42bn, mostly for banks.
The central bank has healthy reserves of €33.6bn. But it does not wish to deploy this money to pay for what it sees as the government’s economic mistakes.
Peter Attard Montalto of Nomura calculates Hungary has a gap in external funding in 2012 of about €5bn which should be plugged by IMF-EU aid.
That is not a big number for Hungary. But its effect on confidence could be dramatic. With the aid in place, private investors will probably be more willing to lend, yields will drop, the forint will strengthen, and the benefits to Budapest could multiply. Without the aid, investors could panic.
So far, Hungary’s difficulties have had limited impact on its neighbours. Unlike in the last CEE crisis in 2009, investors now discriminate better between country risks. But, with the eurozone crisis still overshadowing global markets, the dangers of contagion remain, illustrated in the recent increases in credit default swap rates. As Mr Anne says: “Contagion risks have resurfaced in a dramatic way for emerging markets after the holiday break.”

A famous financial analyst, Dr Bogar Lászlo, of KDNP, who is predicting more hardshisps, even asking himself why aren’t the Parlamentarian Deputies discussing these real problems!

Reading his predictions, the actual government can fail its people:

http://www.magyarhirlap.hu/velemeny/mukodnek_a_penzfegyverek.html
Működnek a pénzfegyverek Dr. Bogar Laszlo,

We should be optimistic though! Let us hope it is going to get better, and the Hungarians will not have to put their money into Austrian Banks, at the time when Standard & Poor have downgraded Austri and France.

Contact: olazin@ucla.edu

Dr Olga lazin-Andrassy.

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About Drolgalazin

Dr Olga Lazin is a UCLA graduate in History. American Constitutional and Globalization.She is a published author, and History Lecturer at UCLA. You can access and download her books at: http://www.olgalazin.com In Hard copy: Globalization is Decentralized: Easter Europe and Latin America Compared, Civic And Civil Society, Foundations And U.S. Philanthropy, published 2016 Author HOUSE, USA. She has been teaching History at UCLA, Cal State University Dominguez Hills, Cal State University Long Beach, as well as University of Guadalajara (UDG) and University of Quintana Roo, in Mexico for over 26 years. Her specialty is History of Food, Globalization of technology, food History, and the American Constitution. As a hobby, she is practicing permaculture. Her radio show is accessible 24 hours a day at: http://www.blogtalkradio.com/dr_olga_lazin FACEBOOK: OLGA LAZIN DROlga Lazin Twitter; @olgamlazin Instagram; #lazinolga E-mail; olazin@ucla.edu
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One Response to Who Let the Dogs Loose in Hungary: Dire Straits

  1. some comments:http://0/bb80019a-3d3f-11e1-b0e4-00144feabdc0.html#ixzz1jPQkFOw8#Dr. Rivera | January 14 5:51am | Permalink| OptionsIt is Orban's responsibility for the financial crisis, because he scared off foreign investment. As well as Dr Attila gruber, his Counselor. Bad people.#Report ALBION | January 13 4:47pm | Permalink| Optionsand no FT#Report ALBION | January 13 4:46pm | Permalink| OptionsSurely the Hungarian knew what autocracy was – only one party, no pension policy, no free passport, no VAT.#Report Absurd | January 13 4:17pm | Permalink| OptionsA free election with re-drawn constituency boundaries, under which only the current ruling party can get a majority? You must be joking!A pension plan? An unjust cost system which makes it impossible for private pension funds to maintain their business sustainably.People would keep their funds in Hungarian banks if they believed their political leaders do not gamble them away.#Report ALBION | January 13 4:00pm | Permalink| OptionsIt is a strange autocracy indeed that lets you have a free election, allows you to have a pension plan and to nip across the border to deposit your savings.#Report Absurd | January 13 2:48pm | Permalink| OptionsBoth are instances of autocracy gaining ground and destroying people’s confidence in their expectedly democratic government, IMHO.#Report ALBION | January 13 11:51am | Permalink| OptionsABSURD, there is no need to read Magyar Nemzet, when you can read more relevant and balanced views in the Economist. Anyway, what has the new media law in Hungary got to do with private pension funds? Just asking.#Report Absurd | January 13 8:44am | Permalink| OptionsALBION, you are right. Don’t waste your time reading the FT. Just carry on reading Magyar Nemzet and the rest of your biased, pro-government Hungarian media, which have an abundant arsenal and which comply with the current Hungarian media law too, a shameful piece of legislation in modern-day Europe.I think this is a very good article, which describes the climate in Hungary well. The quoted Austrian tourist office manager is right. The current Hungarian government is very difficult to trust.I am one of those more than 100 thousand who have held on to their savings in private pension funds even when 3 million others succumbed to the government’s pressure and gave up their funds to the state. The government has recently announced it will channel another HUF 48 billion from the private pension funds to the state. By this move, they will tap our savings again to keep the state budget in balance.How can you make long term decisions about your finances in such a country?#Report borbala | January 13 2:23am | Permalink| Optionswhy should Hungarians believe anything their government is saying?The president, who is Orban's puppet, just turned out to be a petty thief having plagiarized his doctoral dissertation back in 1992: google.com/hostednews/afp/article/ALeqM5hB0tUwQozCTTBVceLzDhtEE3nwHAno consequences whatsoever.the government robbed private pension funds, passed retroactive laws, intervened and unilaterally turned over private contracts. why should citizens believe Orban's words that he would never freeze hard currency deposits?BTW many of the government's actions seem to be motivated by the Argentine "model" and we know what that involved… See: http://www.ft.com/cms/s/0/bb80019a-3d3f-11e1-b0e4-00144feabdc0.html#ixzz1jPPMyM2JJanuary 12, 2012 7:06 pmHungarians bank on Austria to secure savingsBy Kester Eddy in Neusiedl am See, Austria

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