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Utility tariff cuts debated

January 15th, 2013

A left-wing commentator suggests that the energy price cuts will further slow down the Hungarian economy. Pro-government columnists, on the other hand, find it bizarre that the left opposes the price cuts after criticizing the government for restrictions and austerity.

In December, the government decided to cut household gas and energy prices by 10 per cent from January 1, 2013 (see BudaPost December 10). In an interview on Sunday, János Lázár, the Prime Minister’s chief of staff said that further utility price cuts were under consideration. He added that energy prices in Hungary were 30 per cent higher than the level Hungarian families could afford.

Although the Orbán government managed to keep the deficit below the 3 per cent threshold set by the European Union, it has not succeeded in putting the economy back on track, Róbert Friss notes in Népszabadság. Friss accuses the government of excessive interference with the economy. According to the left-wing pundit, the energy sector was paralyzed by the sudden energy price cut. Friss believes that this measure, which will cost 42 billion Forints to the providers, is a purely populist and short-sighted redistribution of wealth, which will in the long run further slow down the economy.

Writing in Magyar Nemzet, Miklós Ugró finds it peculiar that the left-wing opposition staunchly criticises the government’s efforts to help Hungarian families by cutting energy prices. The Socialists seem to believe that ever increasing utility prices are essential to the development of the country and the well-being of its population, the pro-government columnist notes, sarcastically. He admits, however, that lowering energy bills can be very effective in wooing voters since the Hungarian public judges the performance of the government on the basis of tangible benefits, rather than on more abstract achievements, like the reduction of the public deficit.

The opposition, which has for two years criticized the government’s restrictions, now criticizes the energy price cuts, Zoltán Bíró comments in Magyar Hírlap. Bíró speculates that the left-wing parties realized that in order to increase their support, they needed to attack the government’s popular measures as well, by claiming that price cuts will have long-term negative consequences. Bíró wonders when the opposition parties will organize demonstrations protesting against energy price cuts made possible by levying surplus taxes on banks and multinational corporations.

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