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Hungary to outlaw state debt - literally

Parliament

A new government drive could lead to former prime ministers of the now opposition socialist MSzP serving prison sentences for their earlier political activities.

The parliamentary panel – the budget committee’s subcommittee - in charge of investigating the increase of Hungary’s state debt between 2002 and 2010 found that the socialist MSzP governments of the period committed a “crime” by enlarging the debt in such a huge manner.

 

Accountability” for the actual or assumed transgressions of the previous cabinets was one of the main campaign promises made by Prime Minister Viktor Orbán in 2010 and remains a key issue for his party's most-devoted voter base.

 

As such, Fidesz will now propose that authorities assess whether current laws enable enforcing legal consequences in addition to political ones in the cases of former MSzP prime ministers Péter Medgyessy, Ferenc Gyurcsány and Gordon Bajnai. If this is not possible at the moment, then Fidesz will make the necessary arrangements, the party said.

EU debt hunt

 

State debt features prominently on the European agenda these days when the future

existence of the entire European Union and the eurozone is questionable due to the arrears some of its member states have amassed. It is also a fact that Hungary’s state debt increased from the 2002 level of 55.6% to 80.2% by the end of the second socialist term in 2010, which means at the same time that the country could not meet the EU’s Maastricht criteria (a prerequisite of adopting the euro) of keeping the state debt under 60% since it joined the community in 2004.

 

The global economic crisis breaking out late 2008 has also left a strong mark on western countries. Germany, for example, had state debt of 66.3% in 2008 that increased to 73.5% in a single year and today reaches 82.4%, which translates to €2,100 billion. Also, together with Hungary, ten other EU members had their state debt exceeding the Maastricht limit and even the Hungarian debt. These include not only the troubled PIGS countries but also frontrunner economies of the bloc such as France, Belgium or Germany.

 

Still, no reports have come about these countries considering any legal consequences for politicians reigning during the debt-increases, meaning that such an accusation would be a 100% Hungarian invention. Not even Greece has such initiatives, a country that had been forging budget figures for years and pushed the entire European Union to the near-calamitous situation it is in now.

Selective memories

 

However, Fidesz has not always been this obsessed with state debt. After winning the elections last spring, the government did not exclude the possibility of even increasing Hungary’s debt in order to boost the economy but Brussels’ answer was a definite “no”. Later, in February, state debt suddenly became a core point in the communication of the Hungarian government that even laid out a 50% ceiling to state debt in the country’s new constitution and has also established the committee that is now meant to identify and punish those responsible for the past.

 

The subcommittee, that otherwise has six members representing the governing party alliance accompanied with a current and an ex-representative of far-right Jobbik while lacks MPs from both the socialist party and green-liberal LMP, went about its task. It found that the significant increase in Hungary’s state debt cannot be led back to global economic trends but to the socialists’ bad decisions.

 

If they make good on their promises, state debt could be the issue that will grant the governing party one of its greatest wishes: seeing MSzP PMs, especially controversial left-wing political figure Ferenc Gyurcsány, behind bars.

 

 

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