The state of the Hungarian economy à la János Lázár et al.

Great was my surprise when I read a Reuters article the other day with the intriguing headline: “Poland’s markets losing luster as Hungary’s star shines.” The reporter noted that “it took more than three years for the ‘Orbanomics’ rally in Hungary’s markets to kick in,” but as a result of the unorthodox policies Hungary became a “star performer.” It’s too bad that the rosy picture painted in the article has little to do with reality, as the latest GDP figures indicate. Perhaps the Reuters journalist read too much government propaganda about the sterling performance of the Hungarian economy, as has been touted time and again by Viktor Orbán and slavishly repeated by his ministers, specifically by János Lázár, head of the prime minister’s office, and Mihály Varga, minister of economy.

János Lázár just celebrated his fiftieth “government info,” his regular Thursday afternoon marathon press conference. The government introduced these allegedly informative sessions to give the appearance of openness and transparency. Lázár has been trying to humor members of the media with his informal style, but often he ends up trading charm for arrogance. And what is even worse: Lázár is caught lying right and left. By now, journalists attending these press conferences refer to them as the “fairy tale programs.”

Lázár exudes self-confidence. He purports to be thoroughly familiar with the smallest details of every issue. If necessary, he will concoct evidence to prove to his listeners that he is absolutely on top of the situation. Such fabrications usually occur when journalists question the accuracy of one of his claims. He is ready to snap back that the information is based on hard facts when his intelligence came either from flawed media reports or from his imagination. One example was his reference to a non-existent police report dealing with the alleged molestation of teenage girls in Körmend by the newly arrived refugees. A couple of hours later the Körmend police announced that the story as reported in the media was false. A somewhat similar example, except much more serious, is Lázár’s claim that the Hungarian government has proof of George Soros’s hostile actions against the Hungarian government and that the evidence comes straight from the secret services. The result is that the parliamentary committee on national security is asking to see proof that the secret services are engaged in spying on civic groups.

Lazar Janos4

And then there are the economic lies. Last week Lázár repeated the assertion, made earlier by Prime Minister Viktor Orbán and Mihály Varga, about the government’s remarkable reduction of the national debt. Eurostat figures, however, disprove Lázár’s assertion that the gross national debt of six years ago, which he said was 80%, has since been reduced by 10%. The fact is that at the end of December 2009 the gross national debt was not 80% but 78%, and at the end of December 2015 it was 75.3%, which is only 2.7% less. Nothing to brag about, especially in light of the tremendous amount of money confiscated from millions of ordinary Hungarian citizens’ private pension funds, allegedly to reduce the national debt.

These lies have to be perpetuated by ministers like Lázár or Varga because they cannot contradict the “boss,” who keeps repeating the same false numbers. At one point Varga found himself in a most embarrassing situation when he was giving a lecture in which he maintained that the Orbán government had reduced the gross national debt from 85% to 75% when behind him one could see the correct figures on the screen: in 2009 78%, in 2010 80.6%, in 2011 80.8%, etc. How discomfiting it had to be.

So, as we can see, Fidesz politicians are not terribly careful with their numbers. Sometimes, I assume, they simply get confused. It must be hard to keep the numbers straight when you’re keeping two or three sets of books. But they never “forget” that in 2010 Hungary was close to insolvency. They repeat this same story at every possible occasion. Last Thursday Lázár, in order to demonstrate the great accomplishments of the Orbán government, again returned to the allegedly dreadful state of the Hungarian economy after the 2010 elections. “We were not sure,” he said, “whether we’d have enough money to pay the pensioners.” Another dramatic claim that has no foundation in reality.

When György Matolcsy took over the ministry of the economy from Péter Oszkó, he himself admitted that “without further measures the deficit will be 4.3% of the GDP.” What made the situation critical was not any inherited fiscal irresponsibility but the alarming statements made by Lajos Kósa, a high Fidesz official, and Péter Szijjártó, at the time the personal spokesman of Viktor Orbán, about the disastrous financial conditions they were saddled with. In June 2010 both of them claimed that Hungary’s situation was as bad as that of Greece, then in the throes of a deep financial crisis. I assume it was Viktor Orbán, who was visiting Brussels at the time, who instructed them to exaggerate the country’s economic woes to strengthen his hand in his negotiations with José Manuel Barroso. The great ruse backfired, resulting in a disastrous fall in the forint, which then was followed by innumerable economic missteps that shook the financial world’s confidence in the Hungarian economy.

Lázár is a master of invention. He even lied about details of the Paks-II nuclear power plant. As is known, the European Commission has serious reservations about the Russian state company, Rosatom, receiving the tender to build the extension to the power plant without any competitive bidding. Lázár, without batting an eye, declared that “we cannot take responsibility for installing a different kind of technology alongside the Russian one.” Gábor Szabó of HVG suspects that Lázár told this same story to Elżbieta Bieńkowska, European Commissioner for Internal Market, Industry, Entrepreneurship, with whom Lázár met a couple of weeks ago. According to Szabó, there is general consensus among Hungarian experts that Hungary could have used French, American, or South Korean technology because Paks-II will operate completely separately from the existing plant. So, when Lázár said, after returning from Brussels where he negotiated with Margrethe Vestager, European Commissioner for Competition, that the European Union is close to accepting the Hungarian side’s arguments, we’d better take this information with a very large grain of salt.

May 30, 2016
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Here are the points where the all-powerful December 31 “Maastricht” percentages are manipulated.

1. Calculation of the numerator (Maastricht debt)
2. Calculation of the denominator (GDP)
3. Year end moving large part of the debt elsewhere just for December 31.

1.1.: d- a = (d-x) – (a-x) = d’ – a’
reducing the gross debt and the assets by the same amount, and reporting d’ to Brussels
1.2.: confiscation of almost 10 billion euros from the private retirement funds in 2011-2012. (they are not part of the Maastricht numerator)

2.: new, inflated calculation of the GDP since September 30, 2014.

3. gross debt of the central government:
2015-12-11 = 25911.7 or 77.2%
2015-12-31 = 24699.7 or 75.3% —> 1.2 TRILLION of debt disappeared in 20 days !

We will not be able to observe the December 31 collapse in 2016 so well, because AKK stopped reporting the weekly debt numbers since January 1. 2016.


Gross debt of the central government as reported by MNB, in billions.
This number includes the retirement funds.

2010-03-31: 21876.6 HUF = 82.122 EUR
2016-03-31: 34463.4 HUF = 109.700 EUR

increase: 57.54% in HUF, 33.58% in EUR


I very much appreciated the clear statistics and sober analysis.

I’m not an economist by any means, but one trick that many heavily indebted governments use is to devalue their own currency, and make their own currency denominated bonds a more manageable to pay. Of course there are many trade offs to this trick that hurt the average person, but when the gov’t did their first devaluation in mid-September 2010 (I believe it was upwards of 20% to many stable benchmark currencies over the course of a couple days IIRC) I can’t help but wonder if this was an additional hidden cost to the average polgár as there could have very well been bonds that were forint denominated at that time. Maybe it’s just academic point.


A. Schiffer, the leader of LMP leaves politics, effective August 31 !

This is good news for the opposition, since Schiffer was against cooperation with other opposition parties.

Final interview with him:


This is not a first. Over the past several years, Reuters has planted several pro-Russian stories with absolutely no basis in reality, and which have gone unmentioned and unnoticed – unnoticed perhaps because they are so clearly wrong, and unmentioned because it is Reuters.
I am not accusing Reuters of taking Russian or Hungarian money – Thomson Reuters corp. has no need of it (though they have incurred huge losses in the past). I am, however, accusing certain Reuters journalists or editors of doing so.
I am all but certain that I will be attacked for writing this. I am also absolutely certain of what I have written.

Webber, I agree and there’s nothing special, nothing specially offending in your statement. Journalists can also be corrupt and journalists don’t make that much money. Probably Reuters hasn’t given a significant raise for its staff for years so many journalists think they deserve to have a side business. Especially as journalists live in a constant fear of losing their jobs. The Russians and the Hungarians etc. meanwhile are happy to pay. Media (propaganda wars) and soft power are designated as absolutely key areas by the Russian as well as the Hungarian security establishment. Not coincidentally Lazar is influential with one faction of the security establishment (though most remain loyal to Sándor Pintér). Having said that while Lazar tends to lie without any inhibitions, I wouldn’t underestimate the idiocy and corruption (not by money, meaning the lack of commitment to principles) of the EU officials either. The need to be open to compromises (any compromises, however corrupt) is in the very DNA of the EU and Lazar and his people are acutely aware of this. Lazar may well be close to an agreement with the EU, I wouldn’t be surprised. Just imagine if all those efforts and money the Orban administration… Read more »


It’s consistent with what we see. I can’t see any other valid explanation.


London Calling!

As I posted before when Stevan remarked on the article:

Marc Jones journalist at Reuters:

“Having started my Reuters life on the sports desk I now tackle the big players in the central banking world”

Says it all for me. A lightweight.

(Doesn’t exactly reflect well on Reuters – a news agency steeped in history. It seems to have been removed from the internet.)


Correction. It’s still there!


Simicska blues.

Profits of his enterprises:

1.325 billion (2015) vs 5.423 billion HUF, a 75.6% fall.

comment image


These are only his media companies. His building companies are not listed above.


Matolcsy plays the market with public funds …

The Hungarian National Bank has bought, through its foundations, Tesla, Netflix and other bonds .

Right now the strategy is to have a bad 2016 so that when the EU funds arrive again in 2017 there would be a big growth. It’s a question of engineering a good basis effect. That’s for Mihaly Varga and György Matolcsy to accomplish. With a bad 2016, a normal 2017 would look very good so the government would sell it as a big success especially as various constituencies will receive significant handouts. By that time there will be even more media owned by entrepreneurs close to Fidesz. Don’t worry, economics is not such a big issue in Hungary as in the US. People will get a new utility price cut and enjoy some other popular decision and will vote for Fidesz. Trust Orban to read the minds of average Hungarians. This is not the liberal East Coast with a lot of intellectuals. People are simple and nobody understands them better than Viktor Orban. Nobody wants Pista Hiller or Jóska Tóbias as their next prime minister. Orban is here to stay. Fidesz is 100% behind the prime minister and György Matolcsy and together they will make Hungary successful again. Luckily nobody in FIdesz cares about liberal criticism, the Hungarian economic… Read more »

I would like them to stay for the next thousand years.


The troll has some points here:

” ..nobody in FIdesz cares about liberal criticism, the Hungarian economic way will not change..” or science or experience for that matter.

I guess not, and if it doesn’t Hungary will continue the slide into poverty and fascism. It has done something similar before and is on the same path now.
Hungarians are capable of shooting themselves in the foot twice?

Hence the only way is to wipe Orban’s gang out, the sooner the better, or else.


Fidesz return to feudalism – Horthy style – reminds me of the saying by Karl Marx:

History often repeats itself, the first time as a tragedy the second time as a farce …

The EU is stronger than democratic Europe was 80 years ago, so let’s just hope that it won’t be a similar kind of tragedy like last time with Putin in the role of Hitler …


Re: EU ‘stronger’ than democratic Europe was 80 years ago

Europe right now seems to be a little rickety when it comes to its balance. They are 0 and 2 in defending territory when it comes to Vlad’s grasping. Let’s hope for Europe’s sake Vlad doesn’t push the envelope again. He may or may not. But if he comes out perhaps in ‘madness’ Europe must believe in the ‘method’ behind. Getting ‘faked out’ is a terrible situation to be in.


” the prime minister and György Matolcsy and together they will make Hungary successful again.”

The Orban-enriched new “elite” cannot exist without stolen public money.
They are not meritocracy but kleptocracy.

Fidesz & Orban has made most Hungarians indigent, and the country will declare bankruptcy when the EU money flow dries up after 2020 (or 2022).

Hungarians will be waiting for the Wunderwaffen in vain.


It’s strategy to have a bad year?
That is the stupidest strategy I have ever heard of. If it’s intentional, why doesn’t Orban know it is? Why did he hold emergency meetings on the state of the economy?
Go lie to someone else.



The UN lambasts Hungary for its treatment of woman – especially in freedom and availability for abortions and counselling – which are high.

Treatment of women is generally very poor – Hungary’s ranking is very low in the
World Economic Forum’s 2015 Global Gender Gap Report.

“Hungary ranks 44 on the UN Human Development Index, out of 188 countries, but it lags behind on the Gender Gap Index, ranking 99 out of 145 countries.”

I’ve no doubt it’s exacerbated by the Roman Catholic Unchristian Church.

Maybe one of your next blogs Eva?


So it’s kind of official again – in Fidesz Hungary the role of the woman is as we say in German:
Kinder, Kirche, Küche
No need to translate that I think … 😉

Orban’s standard load of bunkum and lies. Back in the course of the 2010 elections, this liar in chief made a number of bombastic promises which even then looked like his usual hot air. And it was hot air: – Foreign debt – named enemy no. 1 by Orban. @tapanch elaborated on the figures. Add the now forgotten voluntary patriotic fund for fighting this enemy – less than 180 million Forints were donated by the Fidesz “patriots”, oligarchs included, a little more than the collections of Klub Radio. – One million new jobs in his government, later this was modified “in the period to 2020”,. In fact total employment was: 3 902 k in 2005 3 732 k in 2008 (in full crisis) and 4 101 k in 2014* or 0.5% p.a. increase over the period, various tricks notwithstanding. Unemployment figures were even worse: 302 k in 2005 441 k in 2013 343 k in 2014* * in 2014 statistical methods were changed. – Orbán/Matolcsy rhapsodized about GDP growth 5-6 even 7%: In fact growth was less then 1% p.a. until 2014 and 3% thereafter with EU funding equal to 6-7% GDP . – Orbán blabbered that: 2012 would to… Read more »
@observer Too many numbers, who cares? It’s way too complicated. Natural gas prices were cut, the migrants are about to flood us (even my colleagues say they may need guns to protect ourselves, so it’s a good idea to take the hunter’s exam and buy a few guns, just in case) so it’s much better to trust in the tried leader Orban than to vote for the opposition like LMP which just doesn’t have the ambition to lead the nation. Orban and Lazar will continue to govern Hungary for lack of a better alternative. I talk to people in the country and they say, yes, Fidesz is corrupt, but these communists? You can’t be serious? We just have no real choice here. At least Orban is a real leader who commands respect wherever he goes and he drives a hard bargain again the Western multinationals. The world cannot usurp us any more and foreigners have learnt that Hungarians take no shit. Hungarians are respected again, while the communists would sell us out like during privatization.. A tough leader is needed and Vona is too timid, he must show his ruthless side before they (the people I know in Bács-Kiskun county)… Read more »

“Natural gas prices were cut, the migrants are about to flood us. . .”
Why not gas the migrants with natural gas then?


That was really funny …
Orban is a real leader who commands respect wherever he goes
You’ve been repeating these idiocies under a hundred different names now – lay off!
Do you really believe that?
Hungarians are respected again
No, everybody’s either laughing about Hungary or calling them names – like the new Austrian Chancellor did right now to the dismay of Szijartó:


Sig hel!


Ye, ye sure … these cliches are getting tedious.

Orban is a NON option, ANYONE BUT ORBAN!
Anyway, he has lost every by election the last 18 months, even Lakitelek.
He is just screwing the Hungarians, but you continue to cheer your own rape.



Orban is your only option – only with such ‘Hungarian’ thinking.

Only with such a warped ignorant analysis like this.

You definitely deserve Orban – but one day it will dawn on you.

Enjoy 2018.


Lies, damn lies, Orban.



Re: the confiscation of pension funds

I wasn’t there when it happened but I figure there was a lot of bitterness and recrimination.

And now it is evident that all that popular anger has been successfully sublimated and funneled somewhere else. Not against the home -grown macro and micro eco architects but to the various useful scapegoats namely the EU and the rest of the dastardly West who ruined the country with their past greediness. Revenge is sweet with the requisite poke in the eyes. And let’s add all the ‘unpatriotic’ who prefer open borders and tolerance for the ‘other’ within a pluralistic society where ‘variations’ aren’t considered a disease or illness.

Great ‘teflon’ government in power alright. Lies can be given outright with the grin straight through the teeth but the mendacity can’t stick anywhere on their shiny , bright and ‘clean’ clothes. Nothing like dissipated anger giving a free pass to the eco ministers.

The problem with the stealing of the private pensions was that: most of them were only small pots of money; the investment environment was so sluggish that the small pots didn’t increase much; any pension pots had not been exposed for very long to the investment landscape; average salary was so small that the temptation to agree to the ‘chrystalisation’ (state theft) – and receive a ‘windfall’ meant that there was not much resistance. The amounts were small because mostly they had only been invested after the collapse of communism. In addition the considerations for taking the responsibility for your own future has not yet, even now, had a very high priority in the Hungarian psyche. Pensions are boring. Had a Western culture experienced this State theft there would have been uproar. The theft hardly registered on the Hungarian indignation scale. My understanding was that M8tolcsy was going to open an account for everybody giving credit for the pensions stolen – transferring the responsibility from private to state. In essence mortgaging Hungary’s youth for the future infinity. This has disappeared from the political horizon. Hungarian’s have hardly complained – Orban and M8tolcsy are their heroes. My partner received a derisory… Read more »

GE will pay its tax to Hungary, and not to US or another country for the windfall income it obtained by integrating a branch of Alstom.

The Hungarian budget will gain 500 billion HUF or $1.7 billion.

GE Hungary 2015 [2014], in billions of forints

Revenue : 4452 [1606]
Income (Profit) before taxes: 4415 [304]
Tax to be paid to Hungary: 585 [64]
Effective tax rate: 13.2% [21.1%]


Not “will pay,” but “paid.” The article says GE paid a massive amount of tax at the end of last year in Hungary and thereby (presumably) dodged paying some tax in the US.
It doesn’t say GE will pay a similar tax this year in Hungary.


Kickbacks are huge in Orbanistan …

And talking about off shore riders …

Lies, damn lies, Orban.


Now, I wonder….what size would the kickback be on 1.5 billion…?


If you think GE’s 13.2% tax rate is too low, think twice !

The big sink of EU support:
Mészáros és Mészáros Kft. , le gas-fitter royal de Felcsút

NET revenue, profit (income); tax liability; effective tax rate; in BILLIONS of HUF

2009: 0.996
2010: 0.854
2011: 2.197;
2012: 4.605;
2013: 9.717; 1.629; 0.071; 4.4%
2014: 9.831; 1.930; 0.088; 4.6%
2015: 20.741; 4.075; 0.351; 8.6%

Other large Mészáros companies:

Búzakalász66 Kft.
Aranykorona Zrt.
R-kord Kft.
Puskás Futball Klub Kft.
GeoEco Hungary Kft.


The Orban mafia state par excellence ….
and the trolls are paying too.