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.
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:
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.
Dr Olga lazin-Andrassy.