We are so used to hearing of bad economic stories emanating from central and eastern Europe that it is nice to read the opposite occasionally, in this case coming from Hungary. This from The Economist –
Current account in surplus. Employment rising, economy growing. Central bank reserves healthy. Budget under control. Compared with the chaos of a couple of years ago, that’s not too bad.
it seems as though the Hungarians (or to be more accurate, the prime minister, Viktor Orbán) deliberately broke off talks with the Fund in order to grandstand as the champions of national interest against wicked outsiders. That’s troubling. Even Mr Orbán’s biggest fans don’t say that he is a great economist. He was last prime minister in 2002, when he presided over a ruinous spending splurge. He has not given an interview to The Economist for some time, but my impression is that he relies on a narrow base of advisers, and has perhaps not fully appreciated how much the world has changed, financially and politically, since then.
My suspicion is that the real argument is not with the IMF but with the EU
It seems that cocking a snoop at the EU is becoming popular in Hungary, as well as in Slovakia and the Czech Republic, as demonstrated by recent election results in those two countries. Ordinary people are getting sick of powerful corrupt officials getting vast pay-offs. This type of corrupt politician is now strongly associated in the minds of voters with the EU and all its works.
The Economist again –
Voters in the region used to shrug their shoulders and vote for the lesser of two established evils. Now they seem willing to risk something new. The common factor is disgust. They live decent, hardworking lives. As customers, they expect high standards for the goods and services they consume. And then they see big black cars with tinted windows barging along badly maintained roads, carrying people whose success owns more to connections and kickbacks than to talent. If I were rich, I would organise some exchange visits between tea-partiers in America and their civic-minded counterparts in ex-communist Europe. I think they would get on rather well.
Orban was only elected as recently as April 2010, as head of a centre right coalition. It’s amazing how in three short months, the Czech Repubic, Slovakia and Hungary have all elected three centre right regimes, all making strongly eurosceptic noises. It’s not only in the PIIGS that the EU is failing, it seems. Its authority is crumbling even where economies are sound. The fury of the One World Government will no doubt be visited on HUngarians, and their new Prime Minister will be taught a lesson. The likely outcome of that will be that Hungarians will trust the EU and the IMF even less. Inflicting economic duress has never been a great way to persuade peoples to sacrifice their independence.