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Next year’s budget is hard to sell

September 20th, 2011

Commenting on the main figures of next year’s budget, Népszabadság pokes fun at the government’s assurances that no restrictions are being imposed. A right wing commentator fears that the rigorous fiscal policy outlined by the Minister of the Economy will prove costly in terms of voters’ support.

György Matolcsy, the Minister of the Economy told the press on Friday, September 16 that in order to keep the public deficit to the target of 2.5 per cent of GDP in 2012, taxes will be raised and expenditures cut back by a total of HUF 750 billion. These measures however, by no means amount to an austerity  policy, he insisted, since restrictions usually leave the structures of public finances unaltered, while in Hungary’s case “nothing remains as it was.” Last year the government broke off talks with the IMF, arguing that it was not prepared to put an additional financial burden on the population and would resort to “unorthodox” measures of economic policy instead.

The hour of truth has struck”– suggests Népszabadság in a front page editorial the day after the outlines of next year’s budget were released. The author finds no trace of unorthodoxy left in the fiscal policy now presented. In addition, he believes that even the modest, 1,5 per cent growth rate forecast by the Minister will prove unrealistic and will have to be revised downwards before the end of the autumn. “The engine is bound to stop if no fuel is injected into it either from outside, or from inside.”

István Stefka, editor in chief of Magyar Hírlap urges Premier Viktor Orbán to “apply his stop-and-go policies with moderation, unless he wants to become a kamikaze prime minister.” The measures, Stefka contends, “felt like a cold shower to the people.” “Fear of the future is mounting,” he believes, adding that “the joyful expectations and hopes following the victory of Fidesz and its allies last year have given way to anguish.” The right wing commentator believes the outcome of the next elections (scheduled for 2014) may depend on whether the government can win the communication battle now unfolding on the subject of public finances.

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