Sorry I am late replying, but it has been a busy week. Also sorry Eva for the gender “incorrectness” which has now been duly corrected.

Doctor Minkorka

“It seems to me that the overwhelming majority thinks that the Hungarian political class (politicos+the chattering classes) needs reeducation.”

Well look. OK. This may well be the case. Probably there is hardly a country where the educated population haven’t reached a similar conclusion about their own politicians (I mean just look at Italy right now). But we have what we have, and since in the time scale in front of you you aren’t simply going to recreate a political class (to suggest otherwise would be demagogy in my opinion) and Hungary does need governing, and policies to try to make the best out of the mess which you have been dealt by history, then you are going to have either one government or the other.

My feeling is that elections in Hungary are quite similar to those in Spain in their unrealism at the present time. In Spain we just managed to have a hotly contested election where virtually no-one mentioned the major crisis which exists in the Spanish banking sector, the consequences of which will almost certainly occupy the majority of the time and energy of the new government in the coming years.

In Hungary you seem to have elections where the keywords “demographic transition” hardly get aired, although, of course, 90% of what is going on at the present time is a by-product of your very special demographic destiny. Strange that a mid term plan to do something about this issue isn’t at the top of the agenda of any of the main parties.

And all of this is now a “one play” opportunity, since this demographic transition you are in the middle of only gets to happen once and then it is done, by 2020 Hungary will be an old country, and will have a very large and expensive weight of old people (or of workers over 55 who can only add very marginal economic contributions to the economic worth of the country), so either you generate a highly dynamic export driven economy quite quickly or you are going to sink into the most unbelievable economic stagnation.

I think there is now little likelihood of domestic demand ever again becoming a driver of economic growth, following a patter we have already seen in Germany, Japan and Italy. (Indeed what is rather frightening about Hungary is how early - in median age terms - you have entered this dynamic, this does not bode well for many of the other EU10 economies once they come down from the “overheating” stage they are in now).

So the point is, not whether the system is privatised or not, but from where - with a virtually contracting economy, and debt to GDP already over 60% - are you going to get the resources? Not from taxes and social security contributions that is clear, since the current bout of inflation that is doing so much damage is a knock on effect in part of the increases in the adjustment package. And you can’t ramp up exports if you continue raising costs. Maybe this is the point the Hungarian electorate wanted to get into the heads of the politicians, but I doubt it.

Dodo

“These fees only created extra bureaucracy”

This may well be the case. But then without an injection of private money, and no fees, all we are left with is a lower level service catering for more people, and this continuing out as far as the horizon goes, since the increased proportion of over 60s isn’t going to come to an end as far ahead as the eye can see, and as I say the Hungarian economy may well contract this year (depending on how big the crash in the financial markets is) and stagnate over the coming three or four, but even if it doesn’t government spending on health and other social areas will be reduced, the deficit and the debt guarantee this.

So as you suggest, no electorate may swallow such a harsh reality, which just means a lot of political and economic instability going forward. In this sense we could well be talking about economic depression rather than recession, and depression may well then become an appropriate word to describe the state of mind of the population at large. So we seem to be following a classic cycle here of denial (that was the first wave), anger (this is the stage we are entering now), and then resignation (which is what I imagine comes next) as all the rage against the politicians proves futile since there is no real alternative - read the reports of the EU Commission, the IMF, the OECD - they all say the same, whatever the political complexion of the authors. And of course, you always can follow Kirchner or Chavez or Morales off down the road of adventure, but we don’t have a single case of a modern society doing this and the population doing this and having any sort of success.

Even the once “unbowed” Serbia now seem to be bottom lining on accepting EU funds in return for Kosovo, even if they may need an election or two more to finally get there.

All of this is such a pity in the case of Hungary, since I really do believe things could be done better, but doing them better passes through the reality grid of accepting where you actually are, and this “reality recognition” was precisely what was absent from the referendum vote.

“The SzDSz leader was interpreting the referendum as a vote against the government.”

Agreed.

“Which it certainly was for large parts of the right and far-right, but the high ratio of Yes votes included a lot of government voters, and pre-vote polls showed the majority wants the government to stay in place but apply the referendum result…”

I don’t agree. The majority of the opinion polls suggest that voters given the opportunity now would vote the government down. This is only natural, Hungary is in a mess, and the medicine being offered is painful. You can change the mixture in the cocktail, but there is no way ythe ultimate package, from any government, isn’t going to be painful at this stage. What we are lacking on all fronts is sufficient realism and imagination to come up with a plan which might mean that pain now will bring relief later - this means exports - and all we are really seeing is general frustration about pain which is going nowhere. And we really haven’t gotten into any really large adjustment of HUF against the Swiss Franc yet. Once this happens household distress is going to be quite large, so I am afraid in the short term I only see things going from bad to worse.

Naturally coalitions are going to make and break under the stress which all this produces.

The referendum questions were indeed worded cleverly. In particular, they call for an ending of these fees from next year, not immediately: thus the current budget would be unaffected.

But the government found a tactically clever way to push its “this-is-a-budget-issue” line by initiating the immediate return to the status quo ante : no way Fidesz will call for keeping the fees until year’s end.

However, Gyurcsány’s message to the population was, in short, that “you made a stupid decision, now we punish you for that”. Which I find a fascinatingly stupid strategic blunder, I don’t know how he could expect anything other than even more turning away from the government.

You misunderstood, with fascists marching on the street I meant the Hungarian Guard and those even further far-right, not Orbán. (And I saw them and their symbols up close in real life, so when say Duna TV calls them just “black-clad youth” I don’t have to be uncertain.) Calling Viktor we don’t need parliament Orbán a would-be-despot may be a rhetorical exaggeration on my part, but it’s you who is hysterical here.

@DoDo

Mit mondjak? Te tényleg hülye vagy.

Full disclosure: I am in the unfortunate position of being a libertarian who sympathizes with Viki, but realizes his economic anti-market as well as tax-and-spend policies don’t bode well for Hungary - neither does not privatizing healthcare, but is for another day.

But to imply he is a fascist and call him a ‘would-be despot’ is hysterical and deranged. Ironically, the referendum, with which I firmly disagree, he originated is a democratic device, therefore you have no evidence of this would-be despotism. On the contrary, just the opposite!

But if you are stuck on calling him an anti-democrat fascist what-have-you — why stop there? Why not just invoke Godwin’s Law and call him the second coming of Hitler? Would make just as much sense.

Correction: against the PM. (And yes, one poll by Gallup still showed a majority for his resignation rather than that of the government, but that’s one poll and Gallup Hungary is known as Fidesz-bent.)

As said above, it’s others who need a re-education.

These fees only created extra bureaucracy (which is not for free) and waiting lines (try to stand in them with a to-be-stiched cut in your toe like I did), in effect punishing all patients for made-up problems (nice comparison with doctor visits in the BeNeLux - forgetting about a much worse general health situation), good riddance.

That privatised healthcare isn’t cheaper was proven over and again in the West. Only, unlike the West, Hungary is not rich enough to play around with lots of money (the playing around with money by the incompetent political elite, see Budapest Metro Line 4 now, or highways and National Theatre under Orbán). Crap healthcare is still better than unavailable healthcare. Thus if the next referendum defeats the multi-insurer reform, good riddance.

I note that following the reformist line in the region has a record of being suicidal and having catastrophal after-effects. The main reason the previous Slovakian government fell, despite bright macro-economic numbers, was its healthcare reform. Look what came after. I already dread the thought of what comes after Gyurcsány if he continues down this road, with the fascists already marching on the street. (And no, I don’t believe Orbán, he is a reckless would-be-despot. With best friends among Europe’s reformist conservatives, to add an irony.)

To clear up a minor misunderstanding: the comment taped by HírTV signals less of a coalition rift, more joint coalition depression and a form of self-delusion. The SzDSz leader was interpreting the referendum as a vote against the government. Which it certainly was for large parts of the right and far-right, but the high ratio of Yes votes included a lot of government voters, and pre-vote polls showed the majority wants the government to stay in place but apply the referendum result…

It seems to me that the overwhelming majority thinks that the Hungarian political class (politicos+the chattering classes) needs reeducation.
Next lesson: the next referendum.
Subject: “Let us stay together! Let us save the social health insurance system!”
Number of supporters: 400.000 (it took 2 weeks to reach this number).
Sponsors: The Green Party and several civil organizations
Date: autumn, this year
http://www.vedegylet.hu/modules.php?name=News&file=article&sid=802

Your ‘he’ is a she. And her name is Éva.