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Little elbow room in IMF talks

November 25th, 2011

A pro-government columnist accuses the left-wing of celebrating the government’s retreat from its previous strategy by turning to the IMF. She believes the current economic hardships are the result of the irresponsible policies of the former governments, whose supporters are now cynically feasting on the failure of Orbán’s strategy.

“The Prime Minister and his National Economy Minister are dancing in straightjackets. They should meet the expectations of investors, without losing public support. They have to make sure that their supporters do not turn away from them even when they have to swap their straightjacket for a fool’s cap,” writes Matild Torkos in a tough opinion piece in Magyar Nemzet.

Torkos lists several left-wing politicians and intellectuals, who have celebrated the decision of the government to start negotiations with the IMF (see BudaPost November 21). Some of them seemed to hope that the involvement of the IMF would force the Hungarian government to abandon its unorthodox economic strategy in order to meet the expectations of international investors.

Such rhetoric is deeply unfair, since previous governments were clearly aware of Hungary’s vulnerability, but did nothing to clear up the mess caused by loans taken out by over a million people in foreign currencies, Torkos writes. In particular, PM Gordon Bajnai tried in 2009 to calm international credit agencies, claiming that his successors’ hands will be tied, and they will have no space to go against the interests of international investors. And Bajnai was right, Torkos admits. As recent events have shown, Hungary can be driven to the wall, no matter how much the Orbán government has achieved (in cutting public deficit).

“Those who celebrate now wash their hands of their own ‘irreproachable’ policy of excessive debt, and their endorsement of loans denominated in foreign currencies. They  deign to describe an economic policy which hurts the banks, rather than milking the people as paranoid,” Torkos complains.

Despite this kind of cynical approach on the left, turning to the IMF is a reasonable move, Torkos believes. If that is the way the exchange rate of the Forint can be stabilised and lending boosted, the government “should put on both the fool’s cap and the straightjacket.”

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