Prime Minister Orbán and Deutsche Telekom CEO Höttges have signed a “partnership agreement” and Deutsche Telekom is rumoured to invest one billion Euros in Hungary which would allow Hungary to achieve its goal of providing high-bandwidth Internet-connection for every Hungarian household by 2018, implementing an EU directive two years earlier than Hungary’s original undertaking for the year of 2020.
Orbán mentioned some surprising statistical data: the telecom and IT sector currently produces 12 to 14 percents of Hungary’s GDP and 25% of last year’s GDP growth came from these sectors. When I had a look at the Eurostat site, I have found something even more surprising:
2.6 percents of Hungary’s work force is employed in high-tech manufacturing! Only Ireland has a higher figure, at 3.0%, than this in the EU and the EU average is 1.1%.
Posted by Leto مؤدّب on 21/02/2014
Hungary’s central bank (MNB) cut the base rate by 15 basis points to an all-time low of 2.70% yesterday. This was quite unexpected since nearly every economic analyst had thought the reduction would be 10 bp and nobody predicted a 15 bp cut.
Base rate in Hungary
The Hungarian Forint went to 310.5 HUF/EUR after the announcement and today it has depreciated further.
EUR vs HUF
Economy Minister Mihály Varga said before the decision yesterday that he “trusts the MNB will act responsibly in view of the current situation ” (that is the weak level Forint is at) He added that “we’re in the 310 HUF band now despite Hungary’s good and stable economic fundamentals and an external market shock may send the forint in the 320 or 330 band, though this would mean business as usual at least domestically “.
A lower base rate is certainly good for Hungary’s economic recovery and for increasing exports, besides it also reduces Hungary’s debt payment burden, but (mainly because of the very high FX loan exposure Hungarian households have) it carries a lot of risk, too. I keep my fingers crossed since our central bank now is skating on thin ice.
Posted by Leto مؤدّب on 19/02/2014
This is an interesting lecture given by American political analyst John Fonte, director of the Center for American Common Culture at the Hudson Institute, in the Danube Institute and it is discussing the issue of national sovereignty in the 21st century.
The Danube Institute is an independent think-tank in Budapest, “established for intellectual debate between conservatives and classical liberals and their democratic opponents in Central Europe”.
Here is a very interesting interview (unfortunately in Hungarian) with John O’Sullivan, the executing manager of DI, once a special councillor to British prime minister Margaret Thatcher and editor of British and US conservative newspapers, and DI deputy manager Gerald Frost. Please stay tuned because I’m going to review it in a later post.
Posted by Leto مؤدّب on 06/02/2014
According to the Jerusalem Post, the Federation of Hungarian Jewish Communities (Mazsihisz) “may send people to physically prevent” members of the nationalist far-right Jobbik party from holding an (undoubtedly provocative) rally at a former synagogue next Friday.
While the local Jewish community has called upon Esztergom Mayor Éva Tétényi to prohibit the gathering, it is also preparing itself for a physical confrontation, Mazsihisz president András Heisler told the Post.
“In case this [gathering] will not be prohibited, the Mazsihisz and Jewish civil organizations will protest and physically hinder the Jobbik rally on the spot,” Heisler wrote in an email.
Mazsihisz has previously indicated a willingness to use physical force, if necessary, to combat rising anti-Semitism.
During an interview last June, Mazsihisz executive director Gusztáv Zoltai told the Post that “until this moment, we have [had] verbal attacks so we strike back with words, but we have more than words.
“We are strong, and if we have to, we will strike back,” he said at the time.
Did Gusztáv Zoltai hint at his AK-47 assault rifle perhaps which he used as a Communist militiaman assisting the Soviet troops to crush the Hungarian revolution in 1956? Or did he mean Mossad, the Israeli secret service infamous for its clandestine operations in other countries?
So are the Mazsihisz men going to attack the Jobbik-rally? Has the Hungarian police allowed the rally to be held? Was there a court appeal by Mazsihisz? What was the court sentence? Unless there is a legally binding court decision to ban the Jobbik rally, the police’s job is to protect their rally and to remove all those who want to “physically hinder” the rally. It really sounds like Mazsihisz thinks they are above the law… But they are very wrong about this indeed.
The Mazsihisz executive director in the uniform he may long for
This is not the only sign now that certain Jews may want to resort to violence in Hungary though. American Nepszava online, the Internet site where Jewish writer Ákos Kertész called Hungarians “genetically inferior” and “pigs wallowing in the mud, happily grunting and guzzling swill”, published an anonymous article which urges that a planned memorial to WWII German occupation in Budapest should be blown up, Magyar Nemzet reported. The Foreign Ministry of Hungary has sent a letter to the US embassy which said that the article conveyed extremist views and incited criminal behaviour. The ministry also has asked the US embassy to take steps, according to the US legal system, against the news portal which is registered in the United States, “similarly like we repeatedly asked to in the case of kuruc.info” (which is an extremist, racist far-right site also registered in the US)
Posted by Leto مؤدّب on 06/02/2014
The central banks of Turkey, South Africa and India caved in and they increased their base rates after the Turkish Lira, the South African Rand and the Indian Rupee were smoked in the financial markets. Now the Hungarian Forint is under a strong attack, too.
The exchange rate of the Hungarian Forint against the Euro
The big difference to these countries is that Hungary has a massive trade balance surplus. Besides the budget deficit is under 3 percents and the economic growth is accelerating, the inflation is low (under 1%). The debt-to-GDP ratio is still high (80%) but at least it’s not growing anymore.
In fact the trade balance surplus of Hungary, which in principle should matter most in determining the exchange rate, in last November has turned out to be more than expected, it was 825 million Euros instead of 804 millions. The surplus was almost 7 billion Euros in the first 11 months which is half a billion Euros more than it was in the first 11 months of the previous year. That’s big for a country like Hungary. So what’s cooking?
Let me quote this comment on Business Insider because I think it sums the situation up very well indeed:
If tapering of 10-20 billion has this kind of effect on these small countries currency then why didn’t we see the opposite when QE was announced?
This is economic warfare pure and simple. Why any of these countries should have their currencies move this violently makes no sense. Their share of exports to the US can’t be that high. The US wants the world to say go ahead, keep print and living above your means. The Truth is that this will shorten the life of the dollar as a reserve currency. People around the world will band together against us.
We should be cutting gov’t spending and we should have reduced taxes over the last five years, but that would have only benefited the American people and let the gov’t feel the pain. We can’t have that now can we.
Posted by Leto مؤدّب on 03/02/2014