Dispute over government’s economic measures
April 20th, 2020A pro-government and an independent economist find the government’s economic incentives to kick-start the economy reasonable and well-balanced. A former liberal minister and a left-wing commentator, on the other hand, accuse the government of mismanaging the economic crisis. A centrist analyst predicts that after the health emergency, the government will face tremendous difficulties in managing the economy.
In Magyar Nemzet, Csaba Szajlai welcomes programs by the government and the National Bank intended to boost the Hungarian economy. Szajlai recalls that the government plans to spend 9,000 billion Forints, around 20 per cent of the GDP to kick-start production. The conservative economist, who in the past was often critical of the Orbán government’s economic path, thinks that the ‘Orbán package’ will help the Hungarian economy recover without creating long-term systemic risks. As a result of low deficits and shrinking public debt over the past ten years, the Hungarian economy is in a much healthier state than it was at the time of the 2008 global financial crisis, and therefore the government has more elbow room to boost the economy through public spending, Szajlai claims.
On Portfolio, Krisztián Kertész also finds the government’s proactive policies reasonable and well-balanced. He cautions, however, that loose monetary policy and increased welfare spending may prove counterproductive. Kertész fears that cheap money may not go to sectors that are harmed by the coronavirus emergency, but rather boost less risky businesses. Kertész adds that increased government support may also keep those businesses alive that are not worth saving. In conclusion, Kertész praises government intervention to shore up the exchange rate of the Forint, along with the recently announced loan repayment moratorium and tax cuts, as the best tools to help the economy.
In Népszava, István Csillag, on the other hand, scorns the government’s economic emergency policies. Csillag, who served as Minister of Economy under a former socialist-liberal government, accuses the government of penalizing opposition-led municipalities and multinational companies, in order to entrench itself in power. The liberal economist speculates that the government wants to bleed opposition parties dry by cutting funding and criminalizing the spread of fake news. He suggests that the government wants to take over lucrative companies as well. Csillag contends that the subsidies announced by the government to mitigate the impact of the coronavirus are too little too late to help Hungarian companies avoid insolvency. He calls for increased welfare benefits to help Hungarians in need. In a passing remark, he calls on the opposition to create a shadow government and use the economic crisis to come up with meaningful policy recommendations.
168 Óra’s Péter Somfai fears that the number of Hungarians living in poverty and deprivation will skyrocket. The left-wing commentator quotes inhabitants of a poor village in the countryside and contends that starving Hungarians left without a job and proper welfare have already started to break into shops to get food. Somfai speculates that public order will break down as such incidents become more frequent. To avoid this, he recommends increased welfare spending, and lambasts the government for abandoning those families most in need.
In an interview with Magyar Narancs, Gábor Török predicts that the government has a bumpy road ahead even if it manages the health emergency well. The centrist political analyst thinks that it will be very difficult to overcome the harsh economic implications of the coronavirus lockdown. Török believes that until the 2022 Parliamentary election, the government will need to strike a balance between popular demands for increased government welfare spending on the one hand and calls for more support for pro-government companies. Török goes so far as to wonder if the government may call an early election after the pandemic before it starts confronting the economic consequences.