Crowds, the IMF, and the Hungarian budget: a follow-up

Yesterday when I decided to bring up the question of the size of the crowds on October 23 I didn’t realize that in the meantime it had become a hot topic in Hungary. The newly appointed undersecretary for international communications, Ferenc Kumin, was infuriated by all the lies foreign journalists were spreading about the size of the pro-government crowd that marched through the streets of Buda and Pest and ended up on Kossuth tér listening to Viktor Orbán’s speech.

First, let me call your attention to a very old post of mine from September 2007. I vented my frustration over the so-called “political scientists” in Hungary who often end up advising political parties, hiring themselves out as political spokesmen, or becoming high government officials with no pretense of being independent. I brought up as examples three “political scientists”: Tamás Fricz, Ferenc Kumin, and István Stumpf. Fricz is still parading as a political scientist while organizing pro-government demonstrations. Ferenc Kumin switched careers several times in the interim. First, from an “independent political scientist” he became a high official in the president’s office of László Sólyom. When his position was terminated with the departure of Sólyom, he became an analyst with Századvég, a pro-government political think tank, only to be chosen a few months ago for another high level government job, this time in the prime minister’s office. István Stumpf, after the fall of the Orbán government, became a political scientist again and then was appointed to the enlarged Constitutional Court. Stumpf has no judicial experience, only a law degree; he taught political science at the Budapest Law School.

Anyway, Ferenc Kumin is outraged about the foreign press’s distortion of the size of the pro-government crowd. He was especially furious at the Österreichischer Rundfunk, the Austrian public television station, that said that “zehntausende Menschen” (tens of thousands of people)  followed the Milla demonstration while ORF’s Budapest correspondent spoke about only “tausende,” meaning thousands, who were present at the pro-government demonstration. Kumin admitted that eventually ORF corrected its figures and announced that 100,000 people listened to Viktor Orbán’s speech.

But the Austrians were not the only ones guilty of distortion, said Kumin. AFP’s stringer is a Hungarian national, and hence the distortion in the French news agency’s report was most likely due to the political views of the reporter. AFP was called on the carpet, most likely by Kumin himself. The French spokesman informed Kumin that in the absence of official estimates the AFP stringer relied on the estimate of Klubrádió. Now that really sent Kumin into a rage. How can anyone call Klubrádió an independent source? Another black mark against Klubrádió.

Finally, I would like to give a link to an English-language article that discusses modern scientific methods of assessing the size of crowds. One of the readers of Hungarian Spectrum mentioned it in a comment, but I think I should make it available to those who don’t always follow the comments. It is worth reading.

It wasn’t only the size of the crowd that excited the government and the media in the last twenty-four hours. The considerably more important event is that the IMF, which initially refused to comment on rumors of a halt in negotiations with Hungary, decided to speak.

Yesterday at the time I sat down to write my post I knew that both Reuters and HVG had tried to find out more from Iryna Ivaschenko, the Budapest representative of the IMF, about the true story, but she refused to divulge anything. At that time her answer was that the IMF doesn’t comment on “media rumors.” However, by this morning the decision was made, most likely in Washington, that it would be better to provide more information. So, Reuters received a written note from Ivaschenko in which she stated that there is no set date for the continuation of the negotiations. Mihály Varga may have been correct when he told reporters yesterday afternoon that he hadn’t received a letter from the IMF informing the Hungarian government about a break in negotiations. But whatever the case, there seems to be no prospect of continuing the negotiations in the near future. Ivaschenko even outlined the reason for this postponement of talks: as the IMF “explained earlier, the Hungarian government should concentrate on steps toward balanced consolidation of the budget” but instead “they propose ad hoc one-time tax adjustments.”

The Hungarian government doesn’t seem to be terribly shaken by this announcement.  Yesterday afternoon Mihály Varga emphasized that it is not only the IMF that has conditions but Hungary as well. The fate of the negotiations depends on “whether people in Washington and Brussels will understand that this government has its own concepts, its own program…. If they don’t recognize this, the negotiations will drag on and at the end they will not be successful.” Well, I think that settles the question. Just as so many commentators have suspected, Hungary is setting  “conditions” that preclude the possibility of ever signing a loan agreement.

This morning Magyar Nemzet claimed to know that, although the excessive deficit procedure will not be lifted against Hungary on November 7, it is unlikely that the cohesion funds will be reduced. The newspaper learned that Germany already indicated that it would not support monetary sanctions against Hungary. Magyar Nemzet added that Brussels has only a few minor objections to the latest Hungarian budget proposals while Greece, Portugal, and Spain are being treated much more generously. If Hungary were punished, the accusation that the European Union uses double standards would be justified. Or at least this is what Magyar Nemzet thinks.

However, if Árpád Kovács’s calculation that Matolcsy’s tax revenue of 764 billion is in fact no more than 453 billion, that might mean more than small adjustments. And this morning Viktor Orbán announced that the government will take over 612 billion forints of municipal debt. That’s not chicken feed. We will see what Ecofin, the joint session of the Union’s finance ministers, will think, especially after learning about the IMF’s explicit disapproval of the Orbán government’s unorthodox economic remedies.

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85 comments

  1. Mark :
    Call me a cynic, but I can’t help wondering how much money is being made by government insiders placing foreign exchange bets on EUR/HUF and USD/HUF, among others.

    hmmm Interesting fought.

  2. Mark :

    Call me a cynic, but I can’t help wondering how much money is being made by government insiders placing foreign exchange bets on EUR/HUF and USD/HUF, among others.

    I wouldn’t be surprised.

  3. it takes a good captain to manage a crew like the hungarians and navigate the rough euro sea you are doing fine victor

  4. Don’t know why captain Orbán reminds me of Lt. William Bligh – wonder when the mutiny will start …

  5. I can see your mind is empty .you never learned what a open mind contains and I wonder who provides you the answers ,is it your nanny

  6. Dr Balogh: The IMF states that they are waiting for meaningful response and the HUF gets stronger to 281 /Euro. How do you handle this counterpoint to your theory?

  7. Louis Kovach :
    Dr Balogh: The IMF states that they are waiting for meaningful response and the HUF gets stronger to 281 /Euro. How do you handle this counterpoint to your theory?

    Eva is not an economic expert and nor am I. But the economic analyst of Portfolio.hu remark made about the HUF/EUR is “From the point of view of technical analysis, the fact that the EUR/HUF “closed” the exciting month of October around 283.5 does not invalidate the trend of forint firming perceived since early January. However, it is clearly visible that the currency was unable to get any stronger than 275 or 276 vs. the euro. This is therefore seen as a strong resistance level.”

    http://www.portfolio.hu/en/fx/hungary_forint_waves_peaceful_goodbye_to_thrilling_october.25088.html

  8. Louis Kovach :
    Dr Balogh: The IMF states that they are waiting for meaningful response and the HUF gets stronger to 281 /Euro. How do you handle this counterpoint to your theory?

    Eva is not an economic expert and nor am I. But the economic analyst of Portfolio.hu remark made about the HUF/EUR is “From the point of view of technical analysis, the fact that the EUR/HUF “closed” the exciting month of October around 283.5 does not invalidate the trend of forint firming perceived since early January. However, it is clearly visible that the currency was unable to get any stronger than 275 or 276 vs. the euro. This is therefore seen as a strong resistance level.”

  9. as long as hungary exports food and imports turist you will do fine viktor, turist will be very impresed with what a empire can do compared to the socialist architecture for their slaves

  10. bernard de raadt :
    as long as hungary exports food and imports turist you will do fine viktor, turist will be very impresed with what a empire can do compared to the socialist architecture for their slaves

    Tourists coming to visit the Hungarian Empire? Have I missed something?

  11. take a tour in budapest all they can show are architecture before world war 2 so you brainless people will understand me. ja ja

  12. slowly some people are finding out that if they work for themself they will better themself and not wait that the governement gives them a lousy free meal using their brain and not the sheepkeepers who only wants non thinking sheep point 23 and 24 the rest give yourself a task brain should be used.ja ja ja

  13. Hungarians are slowly learning and applying the tricks they have learned from the Germans Russians and the actual world , it will take some generations to start growing again as a proud nation but on a solid local generation not with the know-how of EXPERTS that live in other countries “.If” should be taught at school by Kipling. and History not written by interested politicians but by truly researchers

  14. hongorma :
    Re: crowd numbers and the foreign press–as usual the regular BBC correspondent in Hungary portayed Orban in the best possible light and minimized the opposition rally figures:
    http://www.bbc.co.uk/news/world-europe-20053090

    The report is written by Nick Thorpe. In general he favors Orban. I understand that some posters already wrote to the BBC. He has or is part of a website budapost.eu

  15. Really strong words from the BBC correspondent Nick Thorpe. Wasn’t he critised some time ago as being too lenient with Fidesz and Orbán ? Did he change his mind ?

    Or did I mistake him for Nick Cohen, a journalist based In Budapest ?

    PS:

    Bernie is really having fun again, it seems … Bernie, you always make me laugh! At least everybody here can point to someone whose grasp of the English language is even more “formidable” than his own 😀

  16. bernard de raadt :

    take a tour in budapest all they can show are architecture before world war 2 so you brainless people will understand me. ja ja

    Are you sure that all is well upstairs? You can say the strangest things. They simply make no sense.

  17. London Calling!

    Eva! Very perspicacious!

    I don’t think all the lights are on upstairs!

    Regards

    Charlie

  18. London Calling!

    Nick Cohen – is a much respected Observer journalist (and New Statesman too), here in England.

    If it’s the same Nick Cohen – I doubt he lived in Hungary – or focussed on Hungary, Wolfi

    Mistaken identity I think!

    Regards

    Charlie

  19. CharlieH :

    London Calling!

    Eva! Very perspicacious!

    I don’t think all the lights are on upstairs!

    Regards

    Charlie

    Charlies, the lights are on everywhere while I’m skipping down the staircase saying that “Life is beautiful!” Too bad that this feeling usually doesn’t last for too long.

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