The hour of the truth for Hungary: Nation nearly going bankrupt
Article: Hodina pravdy pro Maďarsko: země se ocitla na pokraji bankrotu
Translation: The hour of the truth for Hungary: Nation nearly going bankrupt
What it is about: Article written by a Hungarian journalist describes the situation of Hungary — a nation with great national debts and more importantly in these days — with people having great debts denominated in Swiss franc or in yen.
Comments: I found the article very interesting although it contains some economic inaccuracies (e. g. it’s not exactly stated why the wages went up when the minimum wage was set up to a new high, it is only said it happened so).
I think the article is very important for Czechs because it was also the Czech Social Democrats who said that “national debts must not be paid back”. Unfortunately, many people believe this statement to be true.
But it’s the personal debts is what I find more devastating. There are tens of thousands of families with mortgages denominated in foreign currencies (the article says in franc and yen). The Hungarian forint fell dramatically to an all-time low almost doubling the exchange rate for franc and yen. That caused huge paying problems for Hungarians who are, of course, earning forints. This situation can be their personal catastrophe, I fear.
And so Hungary’s PM Gyurcsany went to Brussels begging his country could join the euro as soon as possible. This mission failed, of course. Hungary does not fulfill the Maastricht criteria.
I think that Hungary is a classic example of a nation that made very bad fiscal decisions in the past and they became great debtors. And the debts must be paid. It’s not possible to owe and never pay back. If I were to be mean I could say — a nation where the both big political parties are so demagogic deserves nothing less than a loud wake-up call. But something similar can soon happen to other European nations, also including the Czech Republic. The politicians have gone absolutely crazy. The budget deficits in Europe and in the USA, too, are so big and no one seems to worry about it.
For more, we shall wait and see.