Books on Hungary
Update No: 123 - (31/08/07)
The Bionemial theorem
Hungary is in a quandary. They have a scandalous government, led by something of
a scoundrel, Gyurscany. But he is for all that a very clever man. He has done
many a wicked thing. But he has admitted as much and promised to reform.
Who is one better off with - a confessed scoundrel or reprobate, latterly
vindicated, or a moralist?
The Hungarian Citizens Party (Fidesz) has lost public support but remains the
country's most popular political organization, according to a poll by Tarki. 56
% of respondents would back the main opposition party in the next general
election, down six points since June.
The governing Hungarian Socialist Party (MSZP) is second with 31%, up six points
in a month. The Hungarian Democratic Forum (MDF) is a distant third with seven
per cent, followed by the Alliance of Free Democrats (SZDSZ) with two per cent.
Hungarian voters renewed their National Assembly in April 2006. The MSZP and the
SZDSZ secured 210 of the legislative branch's 386 seats, securing a full term
for Socialist prime minister Ferenc Gyurcsany. Fidesz, led by Viktor Orban,
elected 164 lawmakers. In June 2006, Gyurcsany introduced a fiscal
"austerity package" of state subsidy reductions and tax increases,
aimed at lowering the country's fiscal deficit.
Neo-Nazis form national guard
On August 3rd, in what journalists call the silly season, Gabor Vona, leader of
the extreme right-wing Movement For The Better Hungary (Jobbik), said his group
will set up a "Hungarian Guard" in order to curb the lack of any
"physical, mental or spiritual self-defence" in Hungary. Vona said
that members of the guard would be ready to defend Hungary in a time of war,
even though they are not allowed to carry out any military training. Jobbik
expects to have about 1,000 guards by the end of 2007.
It is not clear which enemy Hungary now faces. It is, anyway, a member of NATO.
That would appear sufficient, with its normal armed forces, to defend the
The new formation is looking back to something old, as it so happens. They will
wear black uniforms featuring the controversial Arpad Stripes, a medieval coat
of arms that became associated with the Nazi-aligned Arrow Cross party in power
for a brief period during World War II.
Into Euroland by 2011-12
Hungary is faring well economically, now within the EU. It could adopt the euro
in 2011 or 2012 said central bank governor Andras Simor, but questioned whether
it should be a priority for the country.
Hungary must also urgently improve its business environment if it wants to
return its economy to its long term potential growth rate, Simor told a meeting
of the American Chamber of Commerce. 'Whether we need to introduce the euro as
soon as possible is questionable,' he said. The Hungarian government aims to
adopt the single currency as soon as possible but the issue over when it will
meet the necessary economic criteria is the subject of debate.
The government has introduced a series of measures aimed at cutting the budget
deficit to the requisite 3 pct of output from 9.2 pct last year, a record in the
EU. The measures, based mainly on tax and utility price hikes, have driven
inflation and led to an economic slowdown as consumer consumption has fallen.
Simor said that fiscal adjustments alone were not enough to stop economic crises
from reoccuring and urged the government to make the business environment more
competitive to win foreign direct investment in an increasingly competitive
regional environment. The governor added that 'not a lot' had been achieved in
this area so far.
Simor said that the labour market needed to be made more flexible including
measures to increase participation and mobility as well as reduce contributions
paid by employers. 'Almost 50% more people who can work do work in Switzerland,'
said Simor. 'We need to change the way we think about work and work habits.
' He added, that productivity and investment need to be increased if the
Hungarian economy was to return to its long-term potential growth rate of 4-5
pct per annum. Hungary's economy grew at just 1.4 pct last quarter.
To wrap up Simor urged the government to press ahead with plans to create an
independent budget office to regulate government spending, saying a return to
profligate spending before the next election in 2010 was not negligible.