The newest plan named after a former finance minister and prime minister

Viktor Orbán's governments love making plans, and if there are plans they have to be named after historical figures. In fact sometimes the name comes first and only afterward the details of the plan. This is the case with the Semmelweis Plan, named after Ignác Semmelweis (1818-1865) who found that the unclean hands of physicians had something to do with puerperal fever. The name is in place, but the plan that is supposed to fix the ills of Hungarian healthcare is very hazy.

István Széchenyi (1791-1860) has been always a favorite of Hungarian conservatives, mainly because he was juxtaposed against Lajos Kossuth (1802-1894), the revolutionary nationalist. Széchenyi's priority was not independence from Austria but rather the country's economic development. Thus he was very much in favor between the two world wars, whereas after 1945 the darling of the regimes was Kossuth. It was no surprise that during the first Orbán government György Matolcsy's economic stimulus plan was named after Széchenyi. Last year György Matolcsy and Viktor Orbán jointly announced the launch of the New Széchenyi Plan. The first Széchenyi Plan actually had relatively little influence on Hungarian economic growth and I very much doubt that the new plan will be any more effective.

And now we have the Kálmán Széll Plan that allegedly will dramatically lower Hungary's sovereign debt and will usher in a spectacular economic boom. Although few people probably remember Kálmán Széll's name from their studies of Hungarian history in the eleventh grade, Széll (1843-1915) was a much heralded minister of finance (1875-1878) and later a greatly respected prime minister (1899-1903).

The Széll Plan is the Orbán government's answer to the demands of the international markets to improve the precarious economic and financial situation of the country. Although Viktor Orbán while in opposition promised a bright future without any belt tightening, after nine months in office he had to admit that without a serious structural reorganization there can be no sustainable economic growth. The question was how to package this austerity program without calling it austerity. Thus was born the Kálmán Széll Plan for the Reduction of the Sovereign Debt. Like the first attempt at appeasing the European Union in June 2010, this is a numbered list. The first program had twenty-nine points, including such key decisions as permitting the brewing of pálinka at home. This new program has only twenty-six points.

What can I say about the Kálmán Széll Plan? Most of it is as advertised, simply a plan for promised future action. Admittedly, the first point is a concrete change, however modest. From here on ministers will have shorter vacations: instead of two months, only one. In the second point they promise that by July 1 they will work out the details of a freeze on current expenses of the state bureaucracy. But wait a minute, I remember that they promised that already in June 2010. In fact, they promised that they would save 15% on salaries. Of course, we know that in fact the expenses of the government have grown since Viktor Orbán became prime minister.

Similar promises are made about changes in public works programs, disability payments, early retirement, sick pay, drug subsidies. All by July 1. By September 1 they will enact new laws concerning public and higher education. By December 1 they will have put the whole system of social security on a new footing. By the end of the year they will completely restructure the debt load of the Hungarian State Railroad. Then a new world will await the population on January 1, 2012, when all these preparations will be translated into action: a new system of pensions, a new system of public works, and a new system of public transportation. The laundry list sometimes gets a bit confused over tenses: point 21 mentions the freezing of subsidies for parties at the 2011 level, but that freeze, to the best of my knowledge, already took place. Some numbers are serious political targets: in 2014 there will be a parliament of only 200 members!

There are some rather disappointing announcements. First, the extra levy on the banks will continue at the same rate for three years. The government promised earlier that in 2013-2014 business taxes would be lowered from 19 to 10 percent. Well, they will not. Instead there are new, totally unsupported promises of a bright economic future for Hungary. By 2014 the national debt will be only 65-70% of the GDP as opposed to the current 80%. According to the ever optimistic Matolcsy, with the help of the Kálmán Széll Plan and the New Széchenyi Plan there will be an economic growth of 4-6 percent a year. With this spectacular growth there will be 300,000 new jobs created. The Hungarian economic miracle will be "an breakthrough in economic history."

Not surprisingly, investors and analysts were hoping for something more concrete. The reaction was immediate. The yield on government notes due February 2015 climbed 12 basis points. And although it was a weak day across the board for European bourses, Hungary's performance was about twice as bad. London analysts considered the Kálmán Széll Plan vague on the expenditure side and "the timing of the implementation is also not clear." According to Ilan Solot, emerging-markets strategist at  Brown Brothers Harriman in London, the Hungarian government's "plans seem to focus on tax hikes rather than spending cuts … and unless more details on spending cuts are announced, the forint will be vulnerable."

Foreign analysts complain that "the government keeps promising big announcements all the time and then fails to deliver." Unfortunately Matolcsy is no Kálmán Széll.

 

 

67 comments

  1. @KAta
    It’s interesting (and sweet as well) how Agnes Heller says in this video that she is not interested in the Past. I think she means in the nostalgic past or the past which makes you unable to act. I wonder what she might think about history the study of the Past?

  2. Kata: “Agnes Heller says in this video that she is not interested in the Past. I think she means in the nostalgic past or the past which makes you unable to act.”
    In context, I believe, what Heller referred to was Morvai’s statement about all the people who were “shot and tortured after 2002” (which is nonsense). What she meant is that she (Heller) does not want to waste any time to be distract the meeting by going through Morvai’ shock tactic lies. Heller wanted to answer questions regarding current concerns with the current government. Obviously Morvai was planning to discredit Heller, not to deal with the valid concerns. By discrediting Heller, she would pretend that the problems simply do not exist. This meeting was not there to figure out if the Socialists has killed or tortured anyone (which they did not), but to call on current practices by the current government. The true or false accusations of the previous government’s doing cannot authorize the current government for practices they try to justify, simply by using claims made against the previous government.

  3. @someone
    I referred to AH’s words in the video I gave the link to in my previous post. That video was made on AH’s 80th birthday. I did not refer to the EU talk and Q&A afterwards. Sorry.

  4. Kata: I am sorry. Somehow I missed it. THank you. The link does not seem to work.
    Kirsten: ” I guess it means that it is such a fiction that one could not even call it a lie (everything in that is wrong).” Yes, that is my understanding.

  5. The film I referred to is Agnes Heller, Philosopher part 1 in youtube, the interviewer is R Kotroczo. ( Not sure why the link does not work.) I do, of course, have a hunch why, in the current political climate in Hungary, she’s saying that long memory is not necessarily serves one’s survival chances, and that she is not interested in the past. I’m curious though, how she’d separate the usefullnes of history versus the past.

  6. Eva: “Extremist? That’s funny.That’s funny. No, I’m a realist. I can’t imagine that someone is sitting peacefully on the bank of the Danube (where by the way there were no demonstrations) all alone and suddenly a mob of policemen appear out of the blue and put me into jail. Come on! Maybe he wasn’t telling you the truth on the telephone.”
    No you just have an agenda. Why do I have the feeling that if it happened under the Orbán government you’d be more than eager to believe and imagine. Just to enlighten you from a police point of view, maybe they thought that this guy with a bottle fled the riots and now pretends to be peaceful. See, not that hard.
    “Come on! Maybe he wasn’t telling you the truth on the telephone.”
    LOL, and he was rioting throwing rocks at the police while chatting with me about he’s ex for 40 minutes, what a realist…
    Someone:”. At the same time, it is good to know that it is illegal to consume alcohol in public places in Budapest, and the fine could be up to $50,000.”
    Yes, that’s true. But it happens. It’s illegal to be drunk in public in the US (I was told by my roommate that it’s the usual excuse for the police to take you into custody if they want to, I don’t know if that’s true) but it happens. And it’s hella good to sit on the bank of the Danube at sunset drinking something.
    BTW I’m done with this, since I of course don’t have proof (I should really start recording my phone conversations:) ) and it is demeaning to try to defend something like “I swear” against malicious attacks from someone (not you Someone:) ) with an almost religious agenda. (For the record, I didn’t think you were going to believe anything that doesn’t fit into your picture)
    “They talk about police brutality, and individual responsibility, but they do not at talk about the government being responsible, even though we are having fall elections coming up.”
    The difference with Canada is that everybody is talking about police brutality, and no political party tries to push that it was completely ok other than some isolated incidents. I repeat, how was that possible for a whole tac-team to tear off their identification number (not just one isolated policeman).
    Again I repeat, tell me, why was Gergényi given an award? Why ws Gyurcsány thanking Gergényi throughout the following week? Of course, Fidesz used it for their own purposes I’m not defending them (just for people who has the vegetative reflex to start some “But what Orbán did…” reply) but that is no excuse for all these. Did anything like this happened in Canada?

  7. Jano:”Why do I have the feeling that if it happened under the Orbán government you’d be more than eager to believe and imagine.”
    I don’t know why because I wouldn’t believe that story under either governments.
    And why Gyurcsany was thanking Gergenyi? Because the police managed to save the country from a coup. Because this is what was being attempted. In a democratic country where the opposition wasn’t satisfied waiting its turn at the ballot box.

  8. The situation that Jano is describing resonates with a situation that happened to a university friend of mine when I was living in the US. It was post 911 and after the hunt had begaun to arrest people of muslim origin indiscriminately there was a bigger demonstration in our city to protest against these actions of the US government. My university mate was going home across the city centre where the demonstration took place and somehow got mistaken with the demonstrators and got arrested. He spent one night at the police where he had to undergo questionings but was realesed next day. I agree that we are very prone to judge according to our prejudicies and fit reality in accordingly.

  9. Jano: I did not say anything about Orban in the post addressed to you, so I am not quite sure why did you bring that in. You are making an assumption that Gyurcsany or the Socialists suggested to the police to remove their name tags. Again, here is a conspiracy theory, that is hard to argue with, because it is a theory. I quoted to Johnny Boy that according to secret documents that were unveiled recently, it was actually the members of the Fidesz who were upset that force was not used. It was Nyitrai who was demanded to know, why the police was forbidden to use its firearm. So, the FIDESZ acknowledged that the Government instructed the police not to use firearm. Nyitrai and other Fidesz members were mad that the the Government gave this instructions. Obviously it it would of been up to FIDESZ, they would of order the use of live ammunition to protect the police. THis is not a theory. THis is in print, in an official document. Jobbik’s Zagyva Gyorgy, now also mentions that the use of live ammunition would of mean the death of several people. In plain English the Jobbok admits, that there were no live ammunition used.

  10. someone: “You are making an assumption that Gyurcsany or the Socialists suggested to the police to remove their name tags.”
    Well, if that would have been the case the Fidesz-KDNP subcommittee would have discovered it months ago. They couldn’t find anything.
    But let me add here something. Someone mentioned one of the Fidesz members of the parliamentary committee on national security who complained that the government forbid the use of live ammunition. But there was something else in that document: Fidesz parliamentary members were in communication with the leaders of the “uprising” all through the siege of the MTV building. I remember the name of Ilona Ékes and Mária Wittner but there might have been others as well.

  11. Eva: “I wanted to warn you the first time you used this expression. If you keep going like that you can follow Kevin Moore.”
    I accept no warning from someone who called me primitive. You have neither moral nor intellectual ground to lecture me!

  12. The Kalman Szell Plan 2.0 will be implemented. 12 new taxes, which suppose to bring a combined amount of Ft 600 billion in 2013 and “only” Ft 150 billion in 2012.
    Extra tax on phone calling (Ft 2 per minute), and my favorite reduction on medicine for diabetic, if they do not maintain their diet. Apparently, TEK’s new job.

  13. Ron: “The Kalman Szell Plan 2.0 will be implemented. 12 new taxes, which suppose to bring a combined amount of Ft 600 billion in 2013 and “only” Ft 150 billion in 2012.”
    Just to remind everyone. The MOL shares cost the Hungarian government 500 billion forints!

  14. In the Budapest Business Journal a part I did not realized regarding the 2.0 plan.
    “and the introduction of reverse taxation — the practice of obliging the buyer, not the seller, of goods to pay VAT — for grain, oilseed and protein crops in the farm sector that should generate HUF 10 billion in 2012 and HUF 15 billion in 2013.”
    http://www.bbj.hu/economy/govt-unveils-szell-kalman-plan-20_63268
    I honestly believe that the aforementioned VAT reversal the death penalty of the pig and poultry market in Hungary. No way the farmers can finance this.

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