Comments on: Hungary: New President & Debt Downgrade

By: Edward

Edward — Sat, 11 Jun 2005 22:59:50 +0000

Sorry Dave, we’ve had to disable trackbacks following the dreaded spam attacks.

By: Dave Schuler

Dave Schuler — Sat, 11 Jun 2005 20:38:00 +0000

I linked to this post as part of my morning run-down on Friday. For some reason my trackbacks don’t seem to take here, so ping!

By: Edward

Edward — Fri, 10 Jun 2005 17:06:50 +0000

This is getting to be never ending. Now Lituania is having second thoughts:

http://fistfulofeuros.net/quicklinks/archives/001515.php

By: Edward

Edward — Fri, 10 Jun 2005 16:23:36 +0000

I’ve just come across this from the Czech republic:

“Macroeconomic indicators from the Czech Statistical Office (ČS?) could provide new ammunition for euroskepticism in the country.”

“The ČS? reported in its annual analysis of macroeconomic development dated May 30 that the Czech drive last year to meet the Maastricht criteria for adopting the single European currency, the euro, cost the country faster growth.”

“In particular, the ČS? analysis of macroeconomic development highlighted slashing the state budget deficit to 93.5 billion Kč ($3.8 billion) making the Czech Republic the first country in the region to fulfill all the single-currency criteria as a factor that put the brake on growth. “The fast drive to reach the Maastricht criteria did not contribute to economic growth in this country,” the ČS? report tactfully said.”

http://www.praguepost.com/P03/2005/Art/0609/busi2.php

The whole article is worth a read. I’m just about to try and chase up what Paul de Grauwe has been saying.

By: Peter J.

Peter J. — Fri, 10 Jun 2005 16:19:35 +0000

Here’s the link corrected

No need for draconian measures

By: Peter J.

Peter J. — Fri, 10 Jun 2005 16:14:49 +0000

I would agree Edward. To-date I have rather had the impression that adopting the ?uro here has been regarded more as a matter of status than anything else. That opinion ought to be changing.

As an addition to the post today Finance Minister J?nos Veres is quoted as saying:

{{ - ?Analysts want to force me to carry out a Draconian package of measures, but I don’t think that’s needed. If and when measures become necessary, I won’t hesitate to act,” Veres said.

?There’s no reason to make a move hastily. If for instance oil prices went through the roof, that would be another thing. They are already rather high, but we can live with them.” -}} See No need for draconian measures

So the markets are not going to get any joy from the government - it is now probably a matter of when they punish the government, than if they will do so.

By: Edward

Edward — Fri, 10 Jun 2005 15:33:41 +0000

“it may be that some in Hungary?s political class, both on the left and the right, might are now considering”

This wouldn’t surprise me at all. This situation would counsel prudence. To take important economic decisions under political pressure would be extremely foolish. The ‘option call’ on waiting and watching just went up a lot. I think the most intelligent thing to do now would be to let the experiment continue with the 12 existing ‘guinea pigs’.

I would want to see strong evidence of things working a lot better, if it were my future at stake.