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« Further developments in the Kubatov affair | Main | Lajos Bokros on the budget deficit in 2006 »

April 09, 2010

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Paul

does anyone else see the irony in Mr Gyurcsany's questioning "Will Fidesz be morally legitimate after the elections?"

Was his own government "morally legitimate" after it falsified budget figures to gain re-election in 2006?

eva you have some fantastic posts which i enjoy reading. but i still dont understand how you can ignore Mr Gyurcsany's clear hypocrisy.

Steve

Illegally throwing leaflets into peoples postboxes during election by campaign activists and blaming the other side for it is a dirty trick, but is not in the same category as falsifying the state spending numbers, and lying about them.

After the election, Gyurcsany will try to organise a movement similar to what Orban had, after Fidesz lost the 2002 election. If Gyurcsany stays in MSZP, it will be unable to reorganise as a honest force, ever.

John T

Paul / Steve - Gyurcsany is one of a pack of hypocrates in Hungarian politics. The whole political establishment is really a disgrace and the current alternatives are either poor or unpleasant. And for all the talk from Fidesz about tackling corruption, it would appear that their actions do not match their words.

The more I think about this, the more it strikes me that Hungarians as a nation need to have a real look at the values they wish to adopt. And they need to do this in the context of the modern world, seeing how a nation of 10 million people in a world of nearly 7 billion beings needs to adapt and progress (I say this as the values of Jobbik seem to be stuck in the 1930's).

I'd also add that while I've always considered the Hungarian family to be much more close knit than their UK counterparts, I'm not sure that there is really such a thing as strong society in Hungary today.

Mark

Of course I do - but that doesn't make him wrong. Yesterday I listened to Orbán say that he believed large scale tax cuts ought to proceed the spending cuts necessary to pay for them. This is, of course made in the face of the fact that Hungary would find itself faced with a severe and immediate loss of confidence on the financial markets were he to even attempt to deliver on his promise. Soon after 25th April, you are going to be told by your new government about how bad the financial situation is, and how new, deep cuts in spending and consequently lots of people's living standards are necessary. I suspect that many of the people who now think that all Hungary's problems are due to the MSZP, or that FIDESZ is more concerned about people like them than the Socialists and Liberals are going to get a nasty shock, and one does wonder how "morally legitimate" they'll see a FIDESZ that has been promising them "security" and "success".

Eva S. Balogh

Paul: "does anyone else see the irony in Mr Gyurcsany's questioning "Will Fidesz be morally legitimate after the elections?" Was his own government "morally legitimate" after it falsified budget figures to gain re-election in 2006?"

Let me repeat it: they didn't falsify any data. Fidesz tried twice to go to court and the court decided that there was no fraud.

As for the question of morality. Well, if Sólyom was morally outraged by the speech at Őszöd one would expect that he is equally outraged now. I think Gyurcsány is right about this. However, Sólyom's moral outrage is selective. Cheating at his own election doesn't seem to bother him either.

Mark

Éva: "Let me repeat it: they didn't falsify any data."

On this Éva is correct, and it is worth remembering what actually happened in 2006, because there are some lessons here. It was known before the elections that the budget was deteriorating; in the months running up to the elections Hungary's credit ratings were downgraded, and the country was warned by the EU about its budget. This was covered widely in the media, including the pro-MSZP media: to any voter with the slightest sense of how a government budget works, it should have been obvious that the reckoning was coming after the election. And also that the fiscal correction required to put the budget onto a sustainable path would be substantial.

Gyurcsány's lies were really three (1) giving the impression that rising consumption stimulated by the budget could continue by cutting the top rate of AFA from 25% to 20%, but forgetting to mention the rises that would come later, (2) playing a dishonest Eurosceptic and populist card when confronted with the EU's warnings and saying he would protect social spending from Brussels, when in reality he was not able, and unwilling to do so, and (3) pretending that EU structural funds would solve all budgetary problems, when in reality - because all the project require local co-funding - room in the Hungarian budget would have to found to benefit from the money.

FIDESZ, however, didn't exactly help those voters who wanted to hold Gyurcsány accountable because they promised policies - which had they been implemented - would have effectively bankrupted the country in the summer of 2006. So, they would have reduced state revenues through a large tax cut, and increased public spending to hold energy prices down at a time when wholesale prices for energy after the cold snap of winter 2005-6 were high.

While Gyurcsány has rightly paid the political price for his lies, I'm pretty sure that in 2006 FIDESZ were also playing the voters for fools and had their own plans for austerity after the elections (after all, they could have blamed the mess the MSZP left them for the cuts and tax rises that were coming). This, I suspect, is what will happen now.

Ultimately though, the situation should have been clear to any voter, as the information was available. It is very easy for a political party to bribe voters with their own money - after all the revenue side of the state budget is made up from what they can collect from the citizens and business. Looking back on this election campaign, I'm not sure this lesson has been learned.

Eva S. Balogh

Mark "it is worth remembering what actually happened in 2006, because there are some lessons here."

Correct, but as you pointed out earlier, Orbán hasn't learned a thing.

One more thing about 2006. The government itself didn't know how bad the situation was. This is clear from Lajos Molnár's memoirs (Miért lettem antipatikus?) in which he vividly describes what happened when they found out the exact figures. Perhaps I will translate the whole passage one day but the upshot is that they found out the exact numbers only after the elections, sometime at the end of April. Until then they were thinking in terms of 100-150 billion or perhaps 500 billion. Some of the people literally became sick when they heard that it was actually over 1,000 billion.

Orbán most likely knew that the deficit wwould be very high and yet this knowledge didn't prevent him from promising all sorts of goodies, like fourteenth-month salaries.

And one more thing. I wouldn't call Gyurcsány's promises lies. They were miscalculations. One thing he certainly didn't count on, beside that high a deficit, was the world economic crisis. If that hadn't come perhaps he could have pulled it off.

However, I also think that the cuts should have been much more drastic than Gyurcsány was ready to introduce.

Steve

@Mark

In 2006 Fidesz told that they would give 14'th months pension "if the economic growth allows it".

Gyurcsany did both lie and falsify. The Öszöd speech contains a part, where Veress tells, that two calculations were made, one real and one falsified. Gyurcsany had looked at the real one, and told that it should be destroyed. It is on the recording. And last year we were able to look at the data sent to the EU. Those data were first classified as state secrets, but last year a jury ruled that should be made public. Guess what, the real figures were actually double of what the government has reported. It is improbable that the "miscalculation" can be as high as 100%, it is more probable that the figures were falsified on purpose. Just as Veress tells on the Öszöd recording.

It is one thing, that who actually listened to other sources knew that the situation is bad. And the other is, that the Gyurcsany led government denied all, and published falsified data. If you look at the famous 2006 election debate, where Gyurcsany was so aggressive, all his arguments were based on lies.

Why did Gyurcsany a couple of weeks ago sell the DVD copy of the 2006 debate together with Öszöd speech? Because that is his ultimate confession, he lied, falsified data, made 100's of tricks, just to win the elections. As like saying, "look i lied, but i did it to win the election". And he never regretted it. If he tells that the one who made the Öszöd speech public "betrayed" him, that means he still has not regretted it, and he still does not considers it wrong.

whoever

Thinking of Nye Bevan's speech on Eden.

If Gyurcany's inner cabinet are sincere in saying that it was a surprise the deficit was so high after April 2006; and they may be sincere, they may, then they are too stupid to be in those positions in the first place.

Eva S. Balogh

Steve: "The Öszöd speech contains a part, where Veress tells, that two calculations were made, one real and one falsified."

It shows that you never heard the speech. Veres doesn't speak anywhere.

Eva S. Balogh

whoever: "If Gyurcany's inner cabinet are sincere in saying that it was a surprise "

One cannot call Lajos Molnár one of Gy's inner cabinet. Molnar was SZDSZ's man and Gy called him "a difficult guy" even before he proved to be very difficult.

whoever

"The whole political establishment is really a disgrace and the current alternatives are either poor or unpleasant."

Yes. I'd like LMP to be something they (currently) are not. If they do well tomorrow, it is only because they have enabled the projection of any number of alternative optimistic visions.

In fact, LMP in Parliament may find themselves largely ignored and insignificant, reflecting a lack of coherence: failing to make the grade as either a green or a liberal party. It's possible...

John T

Whoever - it does beg the question of who will actually step forward to take on the task of sensibly taking Hungary forward. I can't see anyone who is capable of taking the job on.

Steve

@Eva S. Balogh
"Veres doesn't speak anywhere."

Wrong. The whole Öszöd recording is 3 hours long, and is not just 25 minutes of Gyurcsany's speech.

The original link is:

http://index.hu/belfold/gyurcshang/

But the mp3 files cant be downloaded from there any more, but as you can see his speech is just one of the files. The only speech that can be found on youtube is Gyurcsany's speech, but i'm sure the others were there too. I'm so sorry i didn't save the files when they were still up for download. I beginning to think, this is some kind of conspiracy, how did the other speeches disappear? I'm sure, that Veress did say in one of the recordings that he made two reports.

Does anyone have a link to the other files?

Eva S. Balogh

Steve: "@Eva S. Balogh "Veres doesn't speak anywhere." Wrong. The whole Öszöd recording is 3 hours long, and is not just 25 minutes of Gyurcsany's speech."

Sorry, but the Őszöd speech refers only to Gyurcsány's speech.

Steve

@Eva S. Balogh

Yes, we commonly mean Gyurcsány's speech when referring to Öszöd speech. Nevertheless, the leaked audio wasn't just his speech, but a 3 hour material, in which Veress too spoke.

Eva S. Balogh

Steve: "Nevertheless, the leaked audio wasn't just his speech"

You must be kidding. Only the speech was released to Magyar Rádió and there the reporters cut out two or three sentences from it which they announced on the radio. The siege of MTV headquarters started on the basis of these two or three sentences out of context.

To this day most people never even read the whole speech and never heard of the rest. So, let's just stick to the facts.

Steve

@Eva S. Balogh

If you look at the index.hu link i linked above, you will see, that there was not just Gyurcsany's speech but more leaked audio was released (at that time). But now, the links on the index page are dead. You see that the Gyurcsany's speech is emphasised with "Gyurcsány Ferenc beszéde:", and there are 4 more parts before that. And the title of the index.hu article is "MSZP öszödi frakcióülésének", which means, "the MSZP parliamentary groups Öszöd meeting" and not just "Gyurcsany's Öszöd speech". There were more files than just Gyurcsany's speech.

And you are right, most people are just captured by the harsh language not the actual meaning of the speech.

Mark

Steve: "In 2006 Fidesz told that they would give 14'th months pension "if the economic growth allows it".

Really - you haven't read the 2006 FIDESZ programme, have you, recently?

Here is is: http://www.fidesz.hu/letoltes.php?letoltesid=610

On the top of page 25 is the promise relating to the 14th month pension - and guess what? It says it will be introduced in four stages - and the only mention of if the economy allows, is that they will do more than 14 months, if the economy allows! For those who don't want to read further there are 38 pages of promises, covering things like free public transport for children under three, removal of taxation on small cars, and virtually anything else they cold think of. I could repeat them all, but the basic consequence would have been a huge increase in state spending, with the state foregoing more revenue.

Eva S. Balogh

Mark""On the top of page 25 is the promise relating to the 14th month pension - and guess what? It says it will be introduced in four stages - and the only mention of if the economy allows, is that they will do more than 14 months, if the economy allows! For those who don't want to read further there are 38 pages of promises, covering things like free public transport for children under three, removal of taxation on small cars, and virtually anything else they cold think of. I could repeat them all, but the basic consequence would have been a huge increase in state spending, with the state foregoing more revenue."

Exactly and MSZP had to carry on with a campaign against these incredible promises. They offered less and they still won because perhaps saner people realized that these promises were really zany. Or because the campaign slogan was that four years before people had lived better. Clearly people knew that it wasn't the case. In fact, that was at the root of the problem. People lived much better but not because the growth of the GDP or productivity warranted it. They lived better because the government borrowed like crazy. Then came the rude awakening in 2006.

Mark

Éva: "The government itself didn't know how bad the situation was."

I find this difficult to believe. In autumn 2005 independent experts were telling the government (and everyone else) the situation was not under control, and were projecting deficit levels for 2006 that were no so far from what happened as early as autumn 2005:

http://index.hu/gazdasag/magyar/hiany051004/

Even at the planning stage of the 2006 deficit, back in autumn 2005, it was clear that the government were doing something reckless with the budget (I mean, just look at the tables):

http://index.hu/gazdasag/magyar/kltsgvt05100/

By citing two Index articles I'm not doing justice to the enormous quantities of information that were out there during late 2005, and early 2006 about the deterioration of the budget, nor the constant controversies that raged between the Ministry of Finance and Eurostat in Brussels as to what could be counted off the balance sheet. All I can say to Steve if Gyurcsány was concealing it, he wasn't concealing it very well.

My charge is that the government ministers, and the MSZP-SZDSZ supporters didn't want to look at the reality, because they were more interested in beating FIDESZ. FIDESZ and its supporters didn't want to look because they wanted to beat the government. And no-one else was looking because they wanted the problem to go away.

Éva: "I wouldn't call Gyurcsány's promises lies."

Just look through the figures in the second link. In October 2005 the government were planning a reduction in income and an increase in expenditure. Given that they published this, they weren't lying. But surely by cutting the top rate of AFA in January 2006, and spending more on child support, and the 100 steps programme they were giving another message to the voters - don't look at all those boring figures, they're not important? Go ahead and spend - buy the electrical goods, take out the CHF mortgage, don't worry about tommorow. I have to say I find this deception difficult to defend. I don't think FIDESZ were any better - by promising the earth for lower taxes, they were complicit in this deception, and also in their own electoral defeat.

Steve

@Eva S. Balogh, Mark

MSZP won because of increased spending. It was a bribe of voters.

Damn i cant find the whole Öszöd recording anywhere.

John T

Steve - what you had were two extremely irresponsible programmes. The electorate simply chose the irresponsible incumbents. Neither MSZP or Fidesz has any moral high ground here.

The sad thing though is that in 2010, Fidesz are again making irresponsible comments - either they will implement pledges on tax that will make the financial situation worse rather than better. Or, they will disappoint their voters when they have to own up to the fact that they cannot deliver what they promised. But hey, no doubt in four years until the next election, those Fidesz loyalists appointed to new central / local government posts will do very well for themselves. And those MSZP appointees who have done well out of the system to date, can enjoy the fruits of their endeavours. Well, until the Orban inquisition gets going anyway.

Eva S. Balogh

Steve:"Damn i cant find the whole Öszöd recording anywhere."

Steve, I am very diligent in following the Hungarian media and I'm not saying that it didn't get published somewhere but one thing is sure: it didn't exactly make waives. Put it that way, I didn't hear about the other speeches. Most likely because there wasn't anything terribly juicy in them.

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