Hungarian ambassador to speak at IU
At 4 PM on Wednesday, March 7, the Hungarian ambassador to the United States, Dr. György Szapáry, will speak in Room 102 of the Fine Arts Building at Indiana University-Bloomington. His lecture is titled “Melting Down the Iceberg: How to Deal with the Debt Crisis?” Click here for more details on Dr. Szapáry’s visit, scheduled for March 7-9.
Hungary’s financial issues have become more visible in recent months, perhaps for reasons that are primarily political in nature. Like other debt-ridden European nations, Hungary’s credit rating has been downgraded to ‘junk’ levels, and the country is in need of significant loans from the EU and the IMF to avoid default. While Hungary’s total debt is proportionally similar to that of France, hovering around 80% of its GDP—the figure for Greece is approximately 150%, by comparison—the country’s debt issues have been exacerbated by a broader conflict with the European Union over recent amendments to the Hungarian constitution.
The European Commission began legal proceedings against Hungary on January 17 due to concerns that the conservative Fidesz party had compromised the independence of the Hungarian Central Bank, the judiciary and the media through a series of new laws passed by way of its two-thirds majority in parliament. The EU is likely to avoid participation in loan talks with Hungary and the International Monetary Fund until that dispute is resolved, and is also threatening to withhold nearly 500 million Euros worth of EU Regional policy funding from Hungary if the country’s budget deficit is not reduced to 3.25 percent of its GDP by 2013. As noted by the Wall Street Journal in a recent editorial, the EU’s tough stance on this issue with respect to Hungary is rather unusual. The EU officially demands that no member state have a budget deficit greater than 3 percent, but several prominent EU nations have been way over that limit in recent years: figures released in 2011 showed the budget deficit of the UK was over 10 percent in 2010, while France stood at 7 percent. While those more well-off nations receive far less regional development funding than Hungary, Hungary has been threatened with the brunt of the discipline. These disputes have been repeatedly characterized by Orban’s government as machinations of the “international left,” and Hungarian officials believe a court battle with the EU Commission in the near future is likely.
UPDATE: As of March 7, the EU Commission has given the Hungarian government one month to change the disputed laws. If Hungary does not comply, the Commission will take the matter to the European Court of Justice in Luxembourg.