Good economic news in Hungary doesn’t carry over into the political arena

The economic news in Hungary is good: the estimated 6.4% deficit for 2007 will be smaller: 6.2%. The economic growth for 2008 is estimated be about 4%. Higher than thought. The stock market immediately recovered what it lost yesterday, and the forint gained against the euro. The head of the central bank of the European Union announced that Hungary ought to be congratulated: he has never seen more ambitious and successful reforms in such a short time.

Would that everything were so rosy in the political arena. But it’s not. By now not only the Hungarian press but foreign papers as well are speculating about Ferenc Gyurcsány’s possible fall. On the surface it sure doesn’t look too promising. There is a rather loud minority within the MSZP caucus that is relentless in its criticism of the party’s and the government’s policies. They obviously became frightened of the polls, the strikes, the constant political attacks by the Fidesz. Their solution would be to slow down the reforms. Some would even vote against the healthcare reform bill. Then with the help of the opposition members the bill would be dead. But if the bill is dead the coalition is dead as well. Whether they will go that far, I doubt.

One cannot really make predictions because we have no hard data on the size of the opposition within the MSZP. But looking at the situation from the outside, I don’t think it’s very logical to have a palace revolt against the leadership at the moment. There would be only one beneficiary of such a move: the Fidesz. If there are early elections, Fidesz would most likely win about two-thirds of the seats in parliament. Those who worry about the future of the coalition, for example József Debreczeni, try to warn the revolting members of the socialist party that "they are dancing on thin ice and they don’t have any idea how deep the water is beneath" (Népszava, November 27). Debreczeni is really worried about Viktor Orbán’s antidemocratic tendencies and the future of Hungarian democracy. And he’s not alone.

But the socialists continue to demand changes in the healthcare legislation. Some of these changes are minor: a comma here, a period there, may be a better sentence structure. However, some of them are substantive and would make meaningful reform impossible. The four sticking points are the composition of the boards of the mixed (state and private) insurance companies, the payment of dividends, the compensation per patient and among regions, and the expenses of running the companies. These socialist demands are not new. They have been around since summer but then it seemed that the two parties in the coalition managed to come to an understanding. These old problems have now resurfaced with a vengeance. And they will be difficult to resolve because they reflect radically different attitudes about the relationship between government and private enterprise.

And if the serious challenges to the legislation were not enough, add to them one absolutely mad suggestion by a single socialist parliamentary member: once the new insurers begin their activities, the co-payment and daily hospital fee should be abolished because then everything will be wonderful and it won’t be necessary to receive the extra payments. Considering that the copayments remain with the family doctors, specialists and the hospitals, I don’t understand why our genius of a socialist thinks that it has much to do with the successful operation of the insurers. But it is indicative of the current political environment that although the parliamentary committee on health care decided to drop this crazy suggestion, another committee on the budget decided to pass it on for full plenary discussion.

Meanwhile two economists, both of liberal persuasion, came out with a lengthy article in Népszabadság (November 28) in which they complain that the execution of the reforms is too slow. I agree with them. However, the participants don’t play ball.