Budapest bourse fights for its life
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| "Hungary does not need new austerity measures. We need to implement the measures we have already decided to introduce, and not to retract measures or open the debate again" |
The traditional pattern in Hungary used to be that governments dramatically widened the budget deficit before elections. The epitome of this came in the 2006 general elections. The deficit for that year reached 9.2% of GDP, the largest in the EU. The gross external debt to GDP ratio passed 96.7% and was on the way up. Standard & Poor’s downgraded the sovereign. Soon after being re-elected in 2006, Ferenc Gyurcsany, the socialist prime minister, broke the bad news: radical changes were needed to save the country from bankruptcy. No sooner had these changes begun to be introduced, however, than tapes were leaked to the press in which he admitted to lying about the economy in order to win the election. The opposition, unsurprisingly, cried foul, and the worst riots since 1956 ensued.
Two years down the line, Gyurcsany is still in his mosaic-filled offices in one of the world’s largest and most ornate parliament buildings.
