Last night I listened again to Ferenc Gyurcsány's speech, available in the archives of MR5, the Magyar Rádió's channel that broadcasts the parliamentary debates: http://real1.radio.hu/hangtar/kossuth/also.htm.
Most commentators found the speech boring and not political enough. It was too technical, they said. It was like a lecture of a university professor. I with my academic background find this kind of speech perfectly okay. Moreover, I don't think that under the circumstances a political speech would have been appropriate. Admittedly it was long, about an hour, and Ibolya Dávid in her comments complained about its length. Obviously the prime minister thought that he had to explain the complexities of the economic situation, not so much to those members of parliament who were present (MSZP, SZDSZ, MDF) but to the citizenry. That is to those few who actually watched the debate on TV and to the newspapermen who were supposed to write their reports about it. In addition, around 8 p.m. Gurcsány made a short speech (about five or six minutes) televised on the more important television stations in which he made an appeal to the Hungarian people for their understanding. Apparently, not too people many watched him, especially among the young.
One of the things I forgot to report yesterday was a change in the calculation of pensions from year to year. I think I mentioned earlier that the Hungarian government currently follows the so-called Swiss indexing that pegs the rise of pensions to a combination of prices and changes in the value of real wages. Many people argued against this system, including Viktor Orbán last summer in his "secret" talk with young political scientists. An outcry followed the leaked Orbán plans. Thus it seems to me that the government didn't dare abolish the Swiss indexing system completely. Rather, they modified it. The real value of pensions will remain the same as long as GDP growth is under 2%. Once GDP growth reaches 4% the Swiss system will kick in again. In between these two growth levels the price component will receive a heavier weighting than real wages in determining pension increases.
Another detail came to light today when Erika Szűcs, minister of social services, announced that 50% of child support for children under the age of 14 will be given in kind (foodstuff, clothing) in cases where there is good reason to believe that the assistance intended for the child is being spent elsewhere. For example, in the pub or on cigarettes. Families with children over 14 years old will receive child support only if the child is attending school. It is quite clear that these new, stricter regulations are intended to make sure that Roma families send their children to school. The Fidesz government actually introduced such a regulation but, if I recall correctly, the opposition parties (MSZP, SZDSZ) were dead set against it and abolished the practice in 2002. Well, now they have to reintroduce these policies again.
Re property taxes: for the time being those "poor" families who own three or four pieces of property don't have to worry. The introduction of property taxes is scheduled for 2014. Currently plans include some kind of discount on property owned by people over the age of 62. (I can already see how many apartments will change hands from younger people to folks over that age!) People will be able to subtract 50% of their property taxes from their personal income tax. Rumors have it that the tax rate would be 0.5% of the property's value. I talked to some people who find that far too high given the appraised value of an average apartment in most Hungarian towns.
Finally, raising the retirement age is postponed until 2016 after which every year they would add four months to the retirement age until 2025 when it would reach the age of 65.
As for the reactions to the "stimulus package." Most of the economists I trust seem to think that although it might not be totally satisfactory, given the government's extremely difficult position Gyurcsány and his team cannot do much more. However, there are certain issues that remain to be resolved. One is the tax free status of the miminum wage. The guess is that most of the people at the so-called minimum wage level are actually making a great deal more under the table and evading paying any income tax. Second, according to many economists something should be done with people who retire at the earliest possible moment and at the same time remain employed, most often at the same place from which they allegedly retired. So their salaries increase quite handsomely while a goodly portion of their income is not taxed. Third, people complain about postponing raising the retirement age until 2016 and consider 65 far too low a retirement age.
However, I'm not at all sure that the "package" is complete. Worse and worse economic news arrives daily and I wouldn't be at all surprised if further steps will have to be taken. Today, for example, the forint fell to an all-time low against the euro. (And it's not that the euro was strong. Moody's warning that faltering economic conditions in Eastern Europe will affect the quality and liquidity positions of major Western banks' local subsidiaries which could then spill over to their corporate parents sent the euro to a three-month low against the dollar.) Who knows what's coming tomorrow. Every new disaster will need new remedies.