Holy cow this has got to hurt. According to reports on Reuters and the Wall Street Journal, two of the three other members of the so-called “Visegrad Four” have unceremoniously rejected an idea mooted by Hungarian Prime Minister Viktor Orbán to create a joint “crisis plan” aimed at heading off further contagion from the eurozone crisis into the CEE region.
Orbán’s idea, in a nutshell, is for the four countries to band together to pressure the (foreign) parent banks of local lenders from withdrawing credit from the region – that is, an extension of the so-called “Vienna Initiative” of 2008 – and to get the European Central Bank to add some local liquidity.
But, to put it mildly, so far there hasn’t been much enthusiasm on the part of Hungary’s healthier peers to fall in behind the region’s poster child for financial mismanagement and instability.
Speaking for the Poles, heavyweight Central Bank Governor Marek Belka was pretty diplomatic in brushing off Orbán’s idea, saying “an intergovernmental initiative isn’t the proper thing to do here,” adding that any said need for boosting liquidity in the east was something that should be handled “between the ECB and national central banks.”
Czech Prime Minister Petr Nečas (with a sad-looking Orbán at right) was more blunt: “As far as the proposals from Hungary’s prime minister go… we see them, in view of the good condition of the Czech banking sector and the current economic situation, as unnecessary.”
Blunter still was a spokesman for the Czech National Bank, who said that “given the solid fundamentals and the healthy state of the Czech banking sector, the Czech Republic does not need to join such an initiative. Our recommendation is unambiguously negative.”
The Slovaks – who not have the poorest relations with Hungary but are already a full member of the eurozone – would be probably more scathing still, except apparently Budapest hasn’t even let them know about it. Ouch.