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Hungarian fairy tale or sickness on the Danube? Who is right: The Economist or György Matolcsy?

June 11th, 2012

A left-wing pundit chastises public officials and the conservative press for what he calls their pathetic attempts to deny the charges levelled against the government in the West. Former chancellor Wolfgang Schüssel of Austria takes up PM Orbán’s defence. Otherwise, observers across the political spectrum agree that Hungary faces significant difficulties in the months ahead.

In Népszava, Tamás Mészáros calls the attempts by the government’s PR staff to dismiss one western charge after another against their style of governance ‘futile‘. Freedom House reported that the state of Hungarian democracy has been deteriorating for the past two years, while the Economist wrote that Hungary is showing symptoms of sickness both economically and politically. Mészáros calls pro-government complaints about western double standards tiresomely false and suggests they only serve to further irritate western critics. He accuses the government’s PR campaign of “taking all parties concerned for idiots.” This works more easily, he continues, with their domestic supporters, for they “are quarantined by the pro-government media,” than with the foreign public who draw information from their own sources: diplomats, correspondents and other international observers.

Although this comment was published the day after CNN broadcast an interview with the Minister of the Economy, Tamás Mészáros does not react to Mr Matolcsy’s widely quoted claim that ”the crisis is over, the Hungarian fairy tale will reap success in a year’s time.” In Magyar Hírlap, however, Csaba Szajlai, a long-time critic of the Minister’s policies flatly contradicts Mr Matolcsy. The leading business commentator of the right-wing daily quotes the latest statistics as evidence that “we are plunging towards recession.” He does not contradict an assessment by The Economist describing Hungary as the worst performer among the region’s EU member countries. In fact, his own diagnosis is just as bleak as that of the Economist. Industrial production is stagnating, despite the start-up of a Mercedes Benz plant in Kecskemét, investment continues to shrink, household consumption and public spending are also in decline, while credit is frozen, as both the new, and the already established bank tax seems to have displeased the banks.

Problems in the euro-zone continue to multiply in the meantime, with Spain requiring a bailout. Szajlai believes Hungary cannot cope with its debt if its growth is to be halted or limited to a mere 1 or 2 per cent yearly. So a shift in economic policies would be urgent, he suggests, in order to secure the capital necessary to simulate growth. He appreciates the government’s performance in reducing the public deficit, but urges the decision makers to swiftly reach an agreement with the International Monetary Fund over a standby credit line.
In Magyar Nemzet, deputy editor Szabolcs Szerető believes the recent arrest of high ranking police commanders suspected of corruption partly rebutted “the endless succession of politically motivated criticism by international organisations.” The arrests came as country reports found that Hungary was hard hit by corruption. Szerető understands but rejects the argument according to which the unveiling of police corruption undermines public trust in the police. On the contrary, he argues, unconfirmed rumours are much more harmful to the prestige of the police. It is unclear how far the scandal will reach into high command circles, he continues, but in order to restore public trust, it is indispensable to reveal the whole truth, “no matter what the consequences.”

In an interview in Heti Válasz, Mr Wolfgang Schüssel, former conservative chancellor of neighbouring Austria takes up PM Orbán’s defence against international criticism, saying that articles attacking him in an otherwise pluralist media world, sound almost as if they were being written under some central command. Mr Schüssel contends that reality has not proven the fears voiced by those critics. As to Mr Orbán’s democratic credentials, the former Austrian chancellor tells Heti Válasz that Mr Orbán’s „Fidesz party is the guarantee against right-ring extremist ever being able to win a role.”

In an interview in Magyar Narancs, novelist and playwright György Spíró explains why he thinks that Central and Eastern Europe has entered the end of a several decade-long era of peace. “In earlier periods such a state of mind as the one we are currently experiencing, used to result in wars”, he says and adds that as the Yugoslav wars have shown, no option can be excluded.  As for Hungary, Spíró describes our recent history as liberation from the Soviet sphere of influence to become a province of the West. As a result, Hungary managed not to be buried under the ruins of the Soviet Union, but a million Hungarians lost their jobs and “where poverty is so widespread, it is meaningless to talk about freedom.”  Under such conditions, dangerous ideas can easily burst into flames, he warns, and suggests that Hungary must find a compromise with her neighbours and live with them in peace, for “this is our only chance of normality.”

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