Hungarian rhapsody

Hungary, once the most promising of transition economies, has done it again. That is, made international headlines for it's poor economic practices. The New York Times, in a recent article , reports new economic worries in the small Eastern European economy.


The last government, spokesman for the new ruling party FIDESZ (elected in April this year) Peter Szijjarto says, were lying about economic indicators and thus the economy is in a far worse shape than previously thought, allegedly slipping into a Greecestyled default.

As a result of these statements, the Forint (the Hungarian currency), plummeted as bond yields rose. The below image shows recent developments from Google finance on the Forint from FIDESZ "spooking markets".





Whereas policy analyst dismiss the threat of a new Greece, deeming it a "ham-handed negotiating ploy", it never fails to interest me how this once promising little economy perpetually falls into trouble and makes it to the big headlines of international media rarely for any other reason than economic calamity.

Why is this the case?

A fairly simplistic analysis would be to say the dire political climate never has allowed Hungary to reach it's full economic potential.

It is often the case that politicians are caught lying or in other ways infuriating the public, most notably in the past years is former head of state, Ferenc Gyurcsany (shown in the image below) caught on tape in 2006 calling the country a whore (kurva) country and stating that "I almost perished because I had to pretend for one and a half years that we were governing. Instead, we lied in the morning, at noon and at night. " leading up to mass demonstrations and fuel for the extreme-right. These incidents make the electorate turn to extreme alternatives, such as neo-fascist party Jobbik, or just simply choose the opponent on the political scale, which is what happened this year, when FIDESZ took over power from MSZP. Many political commentators have said that this lack of consistency in a political agenda (ie changing every 4 years) has made economic progress difficult.




In either case Hungary once known as " the happiest barrack in the Communist camp", has a lot more to offer than economic calamities. Hopefully media will have reason to focus their energy on some of the young creatives, filmmakers designers and artist the country has to offer rather than this political economic mess.