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Downgrading by Standard & Poor’s criticised

November 27th, 2012

A pro-government commentator calls the downgrading of Hungary’s sovereign debt by S&P “low grade entertainment”, unsubstantiated by the actual state of Hungarian public finances.

“On a day, when Hungarian government bonds were selling like hot cakes, an American credit-rating agency felt an irresistible urge to downgrade those bonds,” Anna Szabó complains in her Magyar Nemzet editorial. By taking away one +, and leaving Hungarian bonds at BB level, she continues, Standard & Poor’s reacted to the latest decision by the Hungarian government to leave the banking tax intact for the indefinite future and to increase the rate of the planned transaction tax. The market did not collapse, “because what is seen as an unorthodox policy, harmful to banking interests, is in reality a patriotic one, which attempts to distribute burdens more evenly, by involving the banking sector.” Szabó remarks that Hungary received the same treatment as France last week from Moody’s, after “having dared” to impose a crisis tax on big business, “rather than dumping the whole burden on the population.”

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