East Europeans Opt for Needless Austerity to Battle the World Recession

By Land, Thomas | Contemporary Review, Summer 2009 | Go to article overview

East Europeans Opt for Needless Austerity to Battle the World Recession


Land, Thomas, Contemporary Review


ALMOST all the developed world ranging from Britain, Western Europe, North America, Japan and Australia are in the grip of a deep recession. With varying degrees of misery all of these places are suffering a decline but increasingly politicians and economists are worried most about Eastern Europe.

Hungary's economy fell by 6.4 per cent in the first quarter of 2009 according to an official report (Reuter 15 May). Once the brightest economic hope of formerly communist-administered Eastern Europe, Hungary is set to suffer a severe and unnecessary self-inflicted wound by embarking on a brutal austerity programme as it seeks its separate way out of the world recession. The brunt of the projected economies will burden the most vulnerable segments of society.

A similar tragedy is also occurring in many countries elsewhere in this region. The reason is that their leaders are still steeped in the obsolete discipline of the bygone Soviet command economy.

Gordon Bajnai, a non-party technocrat and former businessman, has just been sworn in as Hungary's new prime minister. He had been endorsed by a crisis conference of the ruling Hungarian Socialist Party (MSZP) to replace Ferenc Gyurcsany, the prime minister who had tendered his resignation. Bajnai, the 41-year old former economy minister in Gyurcsany's cabinet, has also won the support of the neo-liberal Free Democrats (SZDSZ), the Socialists' erstwhile coalition partners.

These two parties command a decisive majority in Parliament. The dominant ultra-conservative Fidesz Opposition would prefer parliamentary elections in the realistic hope of securing a landslide victory.

Gyurcsany resigned because he said he perceived himself as an obstacle to national economic recovery from conditions generated by the deepest and most widespread global recession experienced since the Second World War. Hungary is the third East European country to face a government crisis triggered or exacerbated by the recession.

Its austerity programme coincides with the emergency release of a staggering 830bn euros, through the International Monetary Fund (IMF), following a decision reached by the Group of 20 industrialized countries (G20) at their London conference in April, to forestall national bankruptcies by stimulating trade in Eastern Europe and elsewhere. But many leaders in this region evidently still see their countries isolated from the world economy, like in the bad old days under the rule of the Kremlin, as they attempt to battle the recession on their own.

Belt lightening in socially divided Hungary will increase tension between the classes. It will isolate further the underprivileged ethnic minorities. It will hurt mostly the poor and the pensioners, undermining the socialists' diminishing voter base. This will increase the chances of Fidesz, led by the populist Viktor Urban, at the next national elections due in 2010 at the latest. Indeed, the socialists' crisis conference coincided with a Fidesz rally at Heroes' Square in Budapest attended by an angry crowd of 25.000. including uniformed members of an outlawed racist paramilitary organization, demanding immediate parliamentary elections.

The present austerity measures follow an earlier wave of tough tax increases and social benefit cuts imposed by Gyurcsany, intended to meet the conditions prescribed to adopt the euro as a national currency in place of the volatile forint. The Gyurcsany administration sought to moderate the burgeoning budget deficit that reached 9.3 per cent of the gross domestic product (GDP) in 2006. generating a national debt burden worth 64bn euros, a third of it in foreign currencies.

These economies enabled Hungary last year to cut the deficit to 3.4 per cent and the country became the first member of the European Union (EU) during the present recession to obtain a package of soft loans from international lenders led by the IMF, worth 20bn euros, to avoid default. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

East Europeans Opt for Needless Austerity to Battle the World Recession
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.