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Are the ’unorthodox’ economic measures becoming mainstream?

August 4th, 2012

A right-wing commentator, echoing the government’s claims, believes that the Orbán government’s widely criticised ’unorthodox’ economic measures are being copied by various European countries. A centrist online news site, however, finds such comparisons unconvincing.

On Thursday, government spokesman András Giró-Szász told national public radio that the oft criticised policies pursued by Hungary over the past two years are now being emulated by several countries. European governments are starting to realize that unusual measures need to be taken in order to overcome the economic crisis, he noted, and the French government is also planning to levy transaction taxes on banks, not unlike the Orbán government (see BudaPost July 4, 2012). Slovak PM Fico is considering nationalizing private pension funds and levying surplus taxes on the financial sector, telecom companies and energy providers, as Orbán did in 2010.

It has now become clear why Brussels and Washington opposed the unusual policies of the Hungarian government,”  Zsuzsa Nagy Vajda writes in Magyar Nemzet. According to the pro-government columnist, foreign governments were well aware that the extra taxes levied by the Orbán government on foreign companies could set an example, and foreign banks and other companies could suffer huge losses if these ‘unorthodox’ measures were to be imitated by other crisis-stricken countries in Europe. If the economic context in Europe does not improve in the near future, further governments may copy Orbán’s recipe in order to reduce deficit, and as a result, Orbán, who has been seen as a bête noir, might turn into an icon, Nagy Vajda speculates.

Index, however, finds the comparison betweem the Hungarian and the French transaction taxes misleading. The centrist online news portal points out that while the Hungarian government introduced micro-fees on all bank transactions which, at the end of the day, will be paid by the customers, the new left-wing French government will tax stock exchange transactions.

Magyar Nemzet in a separate report also remarks that the Hungarian transaction levy is closer to the Slovak plans than the French proposal. The daily adds that in addition to Hungary, five EU member states have already introduced transaction taxes, and a futher nine are planning to do so in the near future.

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