Twenty-nine people, no friends of the current government, published an open letter in Magyar Nemzet and Magyar Hírlap addressed to members of the Hungarian parliament. The men and women who penned their names to the document were even ready to pay for the publication of the letter. MTI claimed that the letter was the work of "well-known economists, among them high-level government employees of the Orbán government." Yes, it is true that there are some "well-known economists" among the signatories, but most of them are neither well known nor economists. Some come from the business world and not all of them occupy high positions. For example, I found one woman who was described on Linkedin as a "marketing assistant." I was also somewhat baffled when I saw the name of Gábor Náray-Szabó, a member of the Academy, who is not an economist but a chemist. (If anyone would like to have a good laugh he/she should visit one of my earlier blogs in which I translated a conversation between Gábor Náray-Szabó and József Orosz in Kontra. The comments to this post are also hilarious.) Perhaps most startling was the name of Ferenc L. Gazsó, the editor-in-chief of the far-right Magyar Hírlap.
Admittedly, there are some well-known economists on the list, but I would say that they are in the great minority. The most prominent are two former chairmen of the Hungarian National Bank: Péter Ákos Bod and Zsigmond Járai. Bod filled the position during the Antall government only to resign under pressure by Prime Minister Gyula Horn (MSZP) while Járai, after serving as minister of finance in the Orbán government, occupied the post between 2000 and 2005. Járai's relations with the Medgyessy and Gyurcsány governments were singularly bad. Some people blame him for keeping the forint artificially strong and thus doing great damage to the Hungarian economy. In addition to these two men another big name is György Szapáry who left Hungary in 1956 and, after receiving his degree in economics at the Catholic University at Louvain, worked for the IMF until 1990. In that year he returned to Hungary as the representative of the IMF. Later he became one of the vice-chairmen of the Hungarian National Bank.
When asked why he decided to sign this letter Zsigmond Járai said that it was out of desperation. He and his fellow signatories are convinced that this budget will only deepen the economic crisis. The letter claims that the budget before parliament is bogus, that it cannot be implemented and therefore will further discredit the country in the eyes of the international financial community. The minister of finance, they write, overestimated the size of certain revenues while underestimating expenses. In addition, the signatories blame the government for postponing necessary reforms and not helping Hungarian entrepreneurs' competitiveness. The letter concludes with: PLEASE DON'T PLUNGE THE COUNTRY INTO NEW DANGER.
Finance Minister Péter Oszkó's reaction was brief but to the point. He accused the signers of the document of partiality and stated that anyone who has a sense of duty and responsibility for the future of the country should vote for next year's budget. As for the bogus budget he brought up the fact that this is the first Hungarian budget to undergo the scrutiny of the European Committee, the International Monetary Fund, the Hungarian National Bank, the State Accounting Office, and the newly founded Budgetary Council. Not one of them thought that the budget used false data.
Today an opinion piece appeared in Népszabadság by Tamás Bauer, himself a well-known economist, publicist, and former member of parliament. The article is entitled "I can't believe that Bod, Járai and Szapáry actually signed this!" And later: "This must be a forgery! Not the text, the signatures." Of course, Bauer knows only too well that the signatures are for real, but he wants to emphasize the absurdity that these people could possibly lend their names to opinions expressed in the open letter. Take Szapáry, for instance. After all, for about thirty years he was employed by the IMF and originally came to Hungary as its representative. He then represented those very principles he now finds unacceptable.
Bauer also expresses surprise that Járai signed this document. Járai who until now time and time again demanded the radical reduction of government expenses. And this budget cuts expenses by 1,000 billion forints. Járai while he was minister of finance wanted to introduce a flat tax but was unable to implement it due to Viktor Orbán's opposition. This budget's tax structure is as close to a flat tax as possible without calling it a flat tax. Bod, a cautious man who believes in gradual change, should really know how deeply and bravely this government reduced government expenses.
How can these three men say, continues Bauer, that "this budget takes the country in the wrong direction just as the bogus budgets of the Gyurcsány government," when they know full well that it was the 2002 Medgyessy budget that moved the country's economy in the wrong direction. As for lack of reform, surely they couldn't mean what they say because this budget contains serious reform steps as far as pensions and family assistance are concerned. The reason that no more could be included is due to the Fidesz initiated referendum that put an end to certain reforms. But then "responsible economists" didn't raise their voices, says Bauer sarcastically.
As far as "plunging the country toward new danger, they could have said that about the 2000 or 2002 budget but then they said nothing." Oh, yes, all that talk about independent experts! Let's face it, they don't exist.