Hungary should aim to have a roadmap ready for adopting the euro by the end of September, Prime Minister Ferenc Gyurcsany said on Friday.
Gyurcsany told representatives at a meeting of the National Conciliation Council to make a concerted effort to put Hungary on the path to the ERM-2, the anteroom to the euro, by the end of the year.
The prime minister also said consideration should be given to whether the country should rely to the same high degree on foreign capital investments. He said pursuing a more “patriotic policy” should not be excluded. Domestic companies should be promoted and various burdens on them reduced, he added.
Gyurcsany said Hungary’s government now had the opportunity to consider making “more determined and deeper changes” compared to a plan put forward earlier. The vision for a Hungary able to create fundamental change must be created, he said.
Gyurcsany said the proposals put forward by the Reform Alliance, a panel of economists and business leaders, had pointed to the need for deeper structural reforms as well as a fundamental examination of how to make significant cuts to spending. Next week the government will put forward a bill in parliament on pension and tax changes, he said.
Hungary’s forint fell to a new all-time low on Friday morning past 317.45 against the euro. While the forint weakened along with other central and eastern European currencies there have been signs of a decoupling, with Hungary being punished for its excessive debt, said analysts.
The government sees the economy shrinking by up to 3.5 percent this year owing to collapsing European demand. But some economists have given warning of a more severe downturn if western European markets suffer a longer-lasting recession.
Gyurcsany said that if Germany’s economy were to contract by five percent present plans to keep Hungary on a balanced path could be put at risk.
He added that the government was prepared for deeper cuts to state spending.
The prime minister stressed however that Hungarian bank deposits are secure and client deposits are comprehensively guaranteed by the state.
“We have taken very important steps [...] depositors in Hungary do not have any cause for concern,” he said.
Now you are on the right track. Less foreign dependency is a start. Now you have to weed out the back door thieves etc.
I say we scrap it all and start fresh. What we have isnt working,
dont fix it…dump it and start new. but this time with a new
paradigm – no reliance on others. True change starts within.
Ever wonder about Gy’s choice of labels?
“Solidarity Tax” – meaning all of you that are trying to be solid citizens, pay more in taxes while we in gov’t do just a “little bit” to reduce costs?
“Patriotic Policy” – meaning again all of you that are trying to be patriotic citizens, accept responsibility that YOUR country is in the “doo doo”, and dig yourself out while we at the Parliament continue to just chatter.
Amazingly Gy is able to speak with emotive labels, but has been unable to hear what others such as the Reform Alliance have been saying for years.
And when it comes to getting a mandate from the people, holding elections to identify an approach that people will get behind, instead of any rally cry, we hear a vote of confidence from the Parliament.
“Depositors in Hungary do not have any cause for concern,” Gurcsany said.
MY TAKE ON THAT LATEST AUDACITY: Well, if Gurcsany says this, that means that the money is as good as frozen/gone. I happened to be in Ciudad de Mexico for Christmas 1982. That was the time when the Mexican government froze all deposits over the X-mas holidays, and then every foreign currency deposit was forcibly converted to peso at ridiculosuly warped exchange rates.
Robber Baron Gyurcsany & Co. need money. They need tons of it, and they need it right now. They don’t give a crap where they are getting it from, either. The PM is a psycopath, anyhow, he feels nothing but contempt against all Hungarians.
Maybe the easiest way to save Hungary from the impending apocalypse would be to move the country to Slovakia?
But that’s the whole point. If you’re going to freeze all bank deposits (which, true, doesn’t seem to make much sense now) you won’t go telling about it to people and will obviously suppress any rumors and leaks about it. Not saying there’ll be a freeze, just that we won’t know about it until it’ll prob be too late.
Re. freezing of bank deposits. This is an ancient practicce — happend already in the glory days of the Roman Empire, actually. Two reasons for it in Hungary that I can think of.
One, there has already been such a rush on the Hunagrian banks that the gov’t really needs to stop the hemmorage. And two, this would be a precursor first-step to partial confiscation and forced foreign currency conversion into funny money forint.
In Mexico, the government did not really take anyone’s money at the end. It’s just they forcibly “converted” dollar and other fopreign currency deposits at an artificially low exchange rate. So, people ended up getting a fraction of what they should have been getting in pesos. With the HUF free-falling faster than Genossen Gyurcsany’s brain cells, his gov’t must be looking at this lucrative option with great interest. If I had money parked in Hungary, I would seriously consider the Bahamas, Caymans and/or Panama as last-ditch options.
“Hungarian bank deposits are secure and client deposits are comprehensively guaranteed by the state.” That is the root of the present-day problem there, isn’t it? NOBODY “gurarantees” the Hungarian government. But their story would make a great operatic piece. Maybe an operetta, then?