September 10, 2013

Orbán says era of economic “colonisation” over, promises stronger growth in 2014

Hungary’s economy is back on a growth path after the repayment of its 2008 loan to international lenders, and the government forecasts growth of 2 percent in 2014, Prime Minister Viktor Orban told lawmakers in parliament on Monday.
The repayment marks the end of constant pressure by international financial organisations trying to enforce austerity, Orban said.
Orban said that some forecasters expected the economy to grow by more than 2 percent next year, but the government’s expectation is a more cautious 2 percent.
He said this achievement was only possible in a country with a stable government and the appropriate reserves, as well as a disciplined budgetary policy and people who stuck together.
He said employment in the country was growing, inflation contracting and economic growth had started. Further, health-care workers and teachers have received wage rises thanks to the “successes of the past few months”.
The government is expecting further criticism and “attacks” over its efforts to help troubled forex mortgage holders and cut utility prices, but it will not back down, Orban said.
“We are ready to face the dispute and to fight for what we believe is right,” he said. He added that unlike under the previous Socialist governments, banks and monopolies must get used to a new situation: “while they were stronger before and Socialist governments bowed to their power, now we are stronger and it is they who must adapt to Hungarians.” Hungary will never again allow anyone to “earn extra profits at the expense of the Hungarian people,” he said.
“Hungary is an independent, sovereign country, the era of colonisation is over,” Orban added.
He said utility price cuts, eliminating forex loans and helping families and homes were matters of “national importance”, adding that the government had protected the savings of pensioners and family benefits and kept special taxes on multinationals and banks in place.
In response, the opposition Socialist Party said that Orban’s remarks evoked the spirit of communist party congresses back in the 1950s and 60s.
Socialist leader Attila Mesterhazy insisted that the number of Hungarians finding jobs “has grown in London rather than in Hungary”.
Concerning the government’s utility price cut programme, Mesterhazy said that several times the amount left with families is paid into the central budget in higher taxes.
Radical nationalist Jobbik group leader Zoltan Balczo criticised the government’s early repayment of an IMF loan Hungary had taken out in 2008. Balczo said the repayment could not have been done without issuing bonds, in other words the government had taken out another loan to raise the necessary funds.
Group leader of the small LMP party Andras Schiffer said that “Hungary is not doing better” – contrary to Orban’s remarks. Schiffer said that the country was not better off, though businesses associated with the ruling parties are getting richer. Schiffer insisted that while in 2009 some 1,000 billion forints were exported to other countries, that amount has doubled by now.
Schiffer also said that the government was “doctoring” employment figures by those participating in public works schemes. Local economies are shrinking and small and medium-size ventures are not in a position to embark on development projects, Schiffer said.

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