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No growth in sight

September 30th, 2011

The main pro-government daily is worried about how the public will receive the rigorous fiscal policy that the government has to follow in today’s hostile environment.

Nobody thought that 2012 would turn out this way” – complains Anna Szabó in her editorial in Magyar Nemzet. Hopes for a steady recovery and stable growth have been cancelled out by near-recession throughout the Euro-zone, which absorbs most of Hungary’s exports. The surge of the Swiss Franc is siphoning hundreds of billions of Forints out of Hungary, and a ruling of the European Court compels the government to disburse 250 billion to VAT claimants.  “Filling these huge holes with tax increases is enormously risky”, Szabó warns, as higher taxes may divert liquidity towards the “black economy”.

For the first time since the Fidesz victory last year, Magyar Nemzet suggests that the government has “often taken hastily improvised steps”, but the commentator believes that the credibility of the government could still be improved by better communication. “The administration owes citizens who are beset by difficulties an explanation – why the planned measures are unavoidable.”

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