If there is no bread, a circus will do

Bread and Circuses” (or bread and games) (from Latin: panem et circenses) is a metaphor for a superficial means of appeasement. The current Hungarian government no longer can give bread, so remains the circus. It is amazing to watch the performance of this populist government as it tries to divert attention away from the real problems.

Let’s start with the problems. First and foremost they are in the economic sphere. Viktor Orbán claimed that the most urgent problem facing Hungary was the very high sovereign debt he inherited from the irresponsible socialists. We heard endlessly about his excellent stewardship between 1998 and 2002 when Hungary’s indebtedness was around 55% of the GDP and the deficit was around 4%, although the 4% was a phony number due to some clever accounting. The real figure was close to 9%. But he’s right: the sovereign debt of the country climbed steadily, as it did in practically all countries of the developed world.

Viktor Orbán vowed to wage a war against sovereign debt and in June he announced a spectacular reduction of Hungary’s indebtedness. Mind you, this significant drop was the result of the government’s cancellation of treasury bonds after the takeover of private pensions funds.

By August Bloomberg reported that Hungary’s state debt had resumed its upward trend as a result of the widening budget deficit. The paper predicted that it might climb above 20 trillion forints. However, Viktor Orbán didn’t believe the data published by his own Economic Ministry and a month later, on September 6, he announced that during the months of October and November his government will lower the country’s debt burden from 77% to 73%. This, he said, will amount to approximately 4 billion euros.

But what is the situation today?  By September Hungary’s sovereign debt had reached more than 20.5 trillion forints. So, the analysis conducted by Napi Gazdaság based on data available at György Matolcsy’s ministry proved to be correct.

This is what has happened between April 2010 and September 2011. As you can see, the debt never fell back to the level the Orbán government inherited from Gordon Bajnai, even when the first stage of the “war against sovereign debt” began in June 2011.

Sovereign debt between 2010 and September 2011

 

But that’s not all. The budget that hasn’t even been voted on seems to be in tatters already. Hungary’s economic growth most likely will be much lower than the government estimated for the next year. Growth may slow to 0.6%, as opposed to the government’s 1.5% forecast. All in all, the “unusual economic policies” Orbán promised would solve the country’s economic problems have so far turned out to be misguided.

What does a demagogic populist politician do in a case like this? If he cannot satisfy the economic demands of the population, he turns to some other matters that might whip up enthusiasim for him and his party. And since Orbán has been working hard on falsifying recent history and showing the late Kádár regime as a hard-core, almost Stalinist dictatorship, it is now time to find some people responsible for the suffering of Hungarians. Never mind that the Kádár regime, especially after 1963, was called “gulyás communism” or “the happiest barracks” of the Soviet bloc; people’s memory is short. An odd combination of public consciousness prevails in today’s Hungary. On the one hand, a large segment, perhaps even the majority, of the population looks back with nostalgia to the good old days of János Kádár; on the other hand, many of the same people demand harsh punishment for the guilty communists who made their lives unbearable.

So, instead of putting all their energy into solving the current problems facing the country, the government party has decided on a totally futile witch hunt for the guilty communist leaders of the past. During the early 1990s there were attempts to find people who were responsible for mass murders of peaceful demonstrators during the revolutionary period of 1956, but after so many years there wasn’t enough evidence to convict them. Now, they are trying again. Fifty-five years after the events. They are also submitting a bill to parliament to discuss the possibility of retroactively taxing those whom a committee would determine were personally responsible for running the party and state apparatus. They would pay a kind of reparation tax that would be spent on “the victims and/or children” of the post revolutionary reprisals. Considering that there were about 800,000 members of the communist party in 1989, it might be difficult to decide who would have to pay this retroactive tax.

As we know, retroactive legislation is not alien to Fidesz and therefore we shouldn’t be surprised that János Lázár thinks that “it is reasonable to expect these people to make amends by paying a reparation tax.”

But that’s not enough. Fidesz is suggesting another bill that would allow the current Hungarian government to bring charges against those who ordered the political trials that took place after the failed revolution. In addition, judges or prosecutors who were in any way involved in these trials could also be called before the courts. Admittedly, the penal code would have to be changed in order to bring charges because of the statue of limitations. But if Hungary adopted certain international treaties that make these events crimes against humanity, then the cases against these people could be pursued.

How many people are we talking about? Given the number of years that have elapsed I doubt that there could be too many left. One Fidesz MP who is very active in these “political retribution” cases estimates a dozen or so.

And what will happen to the former officials is hard to know. Just to give an idea of some of the ideas that have surfaced, Mária Wittner, a victim of the harsh political reprisals, thinks, for example, that Gyula Horn should be one of those who would have to pay a reparation tax because he was a high official in the the former regime. Never mind that he was also the foreign minister of Hungary who was instrumental in the negotiations about allowing the East German refugees in Hungary to cross to freedom via Austria. Or that between 1994 and 1998 he was the prime minister of the country whose party received more than 50% of the seats in parliament in a free election.

The edifice is crumbling while inside lunatic ideas are circulating about events that took place 55 years ago. It’s extraordinary even to contemplate forcing people to pay extra taxes retroactively, twenty years after the change of regime. In 1989 the political change occurred in a peaceful way. It was a negotiated settlement. Twenty-two years later changing the rules of the game doesn’t seem fair to me. But then, as they say, all’s fair in love and war. And this is certainly a populist war.

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Member

I agree with Orban. Orban’s father should start with the repayment as he was a party secretary. His son likely got into University as both of them were faithful members of the party (young Victor as a Young Communist). Based on this I think Orban should fully reimburse Hungary, with the full cost of his university education, around $80,000. I think he also should pay compensation to those who were not allowed to university because they were actually working against the communist party (sometimes it was as simple as not agreeing wit them). So with the lost wage the person suffered as a consequence of Orban as a party insider taking away the spot , since 1989 is around $720,000. So a total of $800,000 from those who themselves or whose parents were party insiders while their children get into university prior to 1988 should pay. Yes, let start wit the current government!

Ron
Guest

Off topic: Are you aware that VO has a small statue made from plaster. This statue is in the blind institute, so that they can experience VO.
Now a new plaster statue is made from VO’s ass especially for dogs. The statue will be located at the dogpound of illatos utca. And every day this statue will be sprayed with special luft.
Just to be certain only dogs can smell this statue a special security unit will be placed there at all times, just to prevent the fans of VO to smell and lick this ass.
The story is here: http://hircsarda.blog.hu/2011/10/18/orban_fenekerol_keszitenek_lenyomatot_kutyaknak?utm_source=bloghu_megosztas&utm_medium=facebook&utm_campaign=blhshare

Ron
Guest

Off topic: The October 23 rally of Fidesz at Astoria is cancelled, due to the fact that VO need to leave the country for Brussels.
His fans are now hoping that he stays in the country during December. Otherwise, Mikulas, Christmas and New Year’s Eve will be cancelled as well.

Ron
Guest
Eva S. Balogh
Guest

Ron on Auschwitz. Did you see the man who bears a suspicious resemblance to Hitler at the demonstration of a far-right group in Olaszliszka where some Gypsies lynched a man five years ago?

Eva S. Balogh
Guest
Some1: “I agree with Orban. Orban’s father should start with the repayment as he was a party secretary.” There was a rather frightening interview with the rising star of Fidesz, a young man called Gergely Gulyás, yesterday on Egyenes beszéd (ATV). Highly recommend it: http://atv.hu/cikk/video-20111018_gulyas_gergely I saw the interview after I had finished my yesterday’s article on the topic. I really find it incredible that these young guys (Gulyás was born in 1981) are such experts on those days. They haven’t gotten the foggiest idea how the regime functioned and how people behaved in those days. In addition to the Gulyás interview it is also worth listening to a conversation between a Fidesz supporter and György Bolgár on the topic. Bolgár inquired about Pál Schmitt whose position in some office dealing with sports was the equivalent of undersecretary of a ministry. The Fidesz supporter’s answer was “no, he wouldn’t fall into this category.” And what about Csurka? He wouldn’t either. On the other hand, Gulyás said that in his opinion a former minister in charge of food supply (élelmezésügyi miniszter) should also fall into the category of people who would have to pay extra taxes because it served the Kádár… Read more »
Ron
Guest

Eva I just saw the picture on Facebook. What an idiots.
Clearly it provoking, so what is next? Kristallnacht?

Ron
Guest

Al Kamen report on the meeting between VO and the US ambassador. It like the last sentence on this story: Trust but verify (Ronald Reagan).
http://www.washingtonpost.com/politics/looking-for-a-seat-on-the-federal-bench-fuhgeddaboutit/2011/10/18/gIQAalHOvL_story.html

Eva S. Balogh
Guest

Here is an exceptionally good opinion piece on the “reparation tax” (jóvátételi adó) http://tiny.cc/aze8w
She also talks about the Gulyás interview and points out that even Olga Kálmán who is a very good reporter didn’t manage to ask the appropriate questions from this young punk.

Member

I guess the “circenses” would have not been so popular in the ancient Rome if instead using gladiator slaves they would have selected people randomly from the audience. Just a little improvement by the modern day Nero. I’m sure the lions don’t care. Brussel, on the other hand, would be a bit uncomfortable if slavery would be re-introduced in Hungary.
If, for a moment we assume a little last spark of intelligence, what could be the idea here? Gaining votes from the geriatrics of the country? Gulyas rather seems to be mediocre career politician riding on controversial issues to gain spotlight. I don’t think this madness will resonate with the young voters. What if all the MSzMP party members will be taxed? Do you want your parent’s taxed as a war criminal?

Kirsten
Guest

Are those former MSzMP members or party officials all so rich that they could pay a sum that would make a difference for the current state budget and debt? From the picture that Eva showed I understood that even the extra income from the pension funds may be already used so that the decline in the state debt will prove temporary only. The additional income from the former party officials, should is amount to a substantial contribution at all, might also serve only to reduce the debt temporarily. It is growth, which is needed and that will not come from sickles or home-grown food. I think that you cannot at the same time ask people to get back to self-sufficiency AND repay debt as there will be nothing that the debt can be repaid from.

Member
I read on Portfolio.hu that : “It was not the government that invited a group of IMF experts to Hungary, they “came on their own,” said Lajos Kósa, Vice President of the governing Fidesz party, in an interview with public television today morning. ” “Portfolio.hu has asked Iryna Ivaschenko, the resident representative of the IMF, for a comment. Her emailed response is as follows: “Technical assistance is one of the benefits of IMF membership, this is a service we provide to all countries members of the IMF, at countries’ request. ” So, who would you believe Kosa from the ever word-twisting Fidesz or Ms Ivaschenko? I vote for IMF. Fidesz proved again that they will lie to Hungarians in order to sound like the saviors of Hungary, while they are ruining it. Two-faced bunch that is for sure but I am still blown away by the American Ambassador’s new statement on how she believes that Orban will make it right because “he said so” to her. At what point will the USA give up on this poor woman who is clearly not cut for a job to serve as an Ambassador? It is almot as painful to witness Ms Kounalakis… Read more »
Ron
Guest

Some1: This is what the guardian said about the IMF and assistance: http://www.guardian.co.uk/business/feedarticle/9894381

Paul
Guest

Ron – technically it’s what Reuters said about IMF and assistance, as the Guardian just reprinted it without comment.
But how did you find it?? I frequently check the Guardian web site for Hungarian stories and usually come up with nothing. Wondering how I missed this, I tried searching on ‘Hungary’, but still couldn’t find it, even when I narrowed it down to just ‘Business’.
But, in the process, I did find something else I missed – http://www.guardian.co.uk/film/2011/oct/11/brad-pitt-guns-film-hungary?INTCMP=SRCH – I’m ashamed to say that the Guardian has totally accepted the official line on the film props or weapons’ story.

Ron
Guest

Paul: A few days ago I stumble on it, as I was looking for the Brad Pitt story.
Like Eva said a few days ago, it depends who’s story you follow the film crew or the police.
Btw in a new twist apparently some criminal organizations were interested in the weapons, and that is why they raided the warehouse.
http://www.caboodle.hu/index.php?id=12&no_cache=1&tx_ttnews%5BbackPid%5D=11&tx_ttnews%5Btt_news%5D=9478

Eva S. Balogh
Guest

Ron: “Btw in a new twist apparently some criminal organizations were interested in the weapons, and that is why they raided the warehouse.”
I hope you don’t believe this. The more they try to explain the affair the worse it gets.

Ron
Guest

Eva: I hope you don’t believe this. The more they try to explain the affair the worse it gets.
Well, this is what I believe, the more publicity they look for, the less likely they have a strong case.

Member

Ron, Eva: I think the key words are “according to data from the Anti-Terrorist Centre”. Bahahaha , yes I will certainly take their word for it and I am only wondering how come they just released this key information now, not right when they caught the key shipment.
Does anyone recalls from the movie, Untouchables (dir.: Brian dePalma), the scene when Elliot Ness raids Al Capone’s warehouse, but all they find are these chinese umbrellas. Next day photos all over Chicago with Ness holding the umbrella.

Paul
Guest

The funny thing is that, if this story was true and someone from the UK had exported live weapons disguised as film props to Hungary, it would be a huge scandal here and all over the media.
But it isn’t. In fact it’s hard to find anything about it.
So, either an anti-Fidesz cover-up (where are you JB?) or the anti-terrorist people are lying to cover up an embarrassing cock-up…

Eva S. Balogh
Guest

Paul: “or the anti-terrorist people are lying to cover up an embarrassing cock-up…”
That’s my hunch.

Ron
Guest
Today I received by e-mail two legal/tax newsletters regarding various changes due in 2012. If the aim of the new changes was to increase growth then they shot themselves in the foot. Unfortunately I cannot copy/paste the link of these so I give a small summary: BANKING LAW Legislation on early full repayment In another controversial move to fix the woes of the Hungarian economy, Parliament enacted a law, Act CXXI of 2011 on the amendment of the acts in connection with the protection of homes (the “Act”), which allows holders of loans denominated in Euros, Japanese yen and Swiss francs to pay off their loans at preferential rates. The Act came into force on 29 September, 2011 and will remain in force till 1 April 2012. According to the Act, borrowers may fully repay their loans at the preferential rate of HUF 250 to the euro, HUF 180 to the Swiss franc and HUF 2 to the Japanese yen. Holders of loans wishing to pay off their loans must indicate their intention to their bank by 30 December 2011 and will have to make payment within 60 days after indicating their intention. If the conditions prescribed by the Act… Read more »
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