How did less money become more? Viktor Orbán’s historic success in Brussels

This afternoon the new session of parliament began with a brief “victory speech” by Viktor Orbán. He described the “historic success” he managed to achieve for Hungary during the European Union’s summit that hammered out the new 2014-20 budget.

Considering that initially Hungary was going to receive about 30% less in European subsidies than in the previous seven years, one can be grateful that the actual monetary loss was only 20%–from 26 billion euros to 20 billion. However, for Viktor Orbán it is never enough to say: “We are very happy that the cuts were less substantial than we had feared.” He has to come up with a mathematical trick that can make less more. The trick lies in the fact that when the Hungarian prime minister announced his phony figures he was calculating in forints per capita. According to him, while between 2007 and 2013 660,000 forints per capita arrived, between 2014 and 2020 that sum will be 712,000 per capita. Sure, but when Hungary received that money in 2007 one euro was worth 252 forints while today the exchange rate is to 1:292. And then there’s the very high Hungarian inflation rate that further reduces the purchasing power of the allocated funds.

While collecting material for today’s post I realized that Ferenc Kumin, a fairly recent acquisition in the Office of the Prime Minister from Századvég, the Fidesz think tank, has changed his focus in the last few months. As assistant undersecretary for international communication he was first entrusted with making propaganda in the United States. Among other things, he paid a visit to the Democratic Convention, acting as if he were an important guest there. But now Kumin seems to be a spokesman for the government in connection with Hungary’s position vis-à-vis the European Union. In this capacity he extolled the virtues of international cooperation. Hungary, together with Poland, Romania, and France, lobbied hard for high agricultural subsidies. He naturally didn’t mention that Poland, Romania, and Slovakia received more money than in the previous seven years. Hungary was also pleased that the share of EU monies remained 85% instead of 75% of the total cost of projects, as had been talked about earlier. As it  is, the Hungarian side has difficulties coming up with its 15% share, and thus a lot of available money is never used.

But there is another way of looking at the “historic success” that is much less encouraging. While the overall EU budget was reduced by only 2%, Hungary lost 20% of its subsidies. In fact, Hungary could have done much worse because the sums allotted were based on a percentage of the countries’ GDP, and Hungary’s GDP actually shrank in the last few years. If the EU had adhered to this principle Hungary would have been deprived of a huge amount of money, a move that Brussels considered too extreme.

jackpotAnd now let’s see how wisely successive Hungarian governments have used these subsidies in the past. Not wisely at all. A great deal of the money was spent on swimming pools, wellness centers, and repaving and redoing the central squares of practically all mid-size towns in the country. And no one should think that there is any major change being contemplated for the future use of cohesion funds.

The latest brainchild of the Orbán government is a “museum quarter” around the present Szépművészeti Múzeum (Museum of Fine Arts). Only yesterday Zoltán Balog announced this huge project, which will be completed in five years. It will involve the complete renewal of Budapest’s City Park (Városliget) and the construction of several new buildings to bring practically all important galleries and museums currently scattered around the city into one “Museum Quarter” (Múzeum Negyed). The government is planning to spend 120 billion forints on the project, which will make it “the biggest cultural development in a hundred years in Budapest.” The area will look like at last “what the city planners dreamed of in 1898 at the time of the millennial celebrations.”

Indeed, it will be a big project: new buildings will be needed for the Museum of Ethnography, the Hungarian Museum of Photography, a new National Gallery, the Museum of Hungarian Music, and the Hungarian Museum of Architecture. In addition they plan to restore a wing of the Museum of Fine Arts that was badly damaged during World War II. This time the government promises an international competition given the importance of the project.

For the buildings of the Museum Quarter the government is planning to spend 70 billion forints. But, don’t fret: 90% of this sum will be “financed from EU sources.” Another 50 billion will be spent on the City Park where they will enlarge the zoo. In addition they will redo the Petőfi Csarnok (Petőfi Hall) which in the future will be a kind of Disneyland, Hungarian style, for youngsters.

This project, like practically all others, will undoubtedly be carried out by Hungarian companies favored by Fidesz. How much of the EU monies will actually end up in the coffers of the party no one knows. Yes, the project will employ people in the building industry, which has been badly hit in the last five years. But, beyond this, it is hard to justify spending EU monies for such an undertaking. The man who is in charge of the project claims that the very existence of the City Park and the Museum Quarter will bring 1-1.5 million tourists to Hungary. I very much doubt that claim.

Meanwhile the towns cannot keep up their new stadiums and swimming pools, the fancy stone pavers in the main town squares are becoming loose and starting to look shabby. These projects might make town centers a little more attractive, but they do not facilitate Hungary’s cohesion to the more developed parts of the European Union.

Advertisements

48 comments

  1. Oh my god, the Hungarian Museum Project will be a giant money syphon if there ever was one. Concrete is the name of the game.

    Simicska’s (Hungary’s main oligarch, closest ally of Orbán) Közgép Inc. or Demján’s (an old school, but Fidesz-leaning oligarch) Arcadom Inc. are well-positioned to build these huge buildings which are completely unnecessary for a number of reasons.

    Similary to the new National Theatre and MÜPA (both were built by Arcadom), they will be built quickly and the operational costs will be burdened on the taxpayers (crowding out subsidies for smaller projects).

    The operational subsidies of National Theatre equals to all other theatres in Budapest, MÜPA (Palace of arts) takes away more than complete sectors of culture. Every ticket sold at MÜPA is subsidised by not less than 8000 HUF (that is 35 USD) by the famously rich Hungarian taxpayers. At the same time, other museums, especially in the countriside are closed for days every week to save costs, attendace is down, reaserch work at museums, acqusition of artifacts are all down — and we need to burn hundreds of millions of USD on new museums.

    And we need to spend the money in Budapest, when the countriside is already unlivable so that more intellectual jobs will be created in Budapest. For example one of the only popular museum, the Museum of Photography would be reloctaed to Budapest, depriving Kecsekmét of an important local institution.

    There has been no conception, ideas, preparation at all, just an order — build and make as much money as possible. While you build projects, you make a lot of money (i.e. you syphon off the inflated costs) and then it is up to the future taxpayers to deal with it. The money is now, the consequnces in the future.

    I mean why a House of Hungarian Music when we have MÜPA (even with such subsidies it is not full and many days there is no show at all, we have Zeneakadémia soon ready, and Vigadó too, just to mention a few venues). Simply, there is no need for it there are notthat much people interested in music, it is the same idiotism as with MÜPA, the Palace of Arts (which, in addition of the muscic hall, also houses a museum with minuscule attendace and a center for dance, which are just redundant there, but the huge project needed functions and fomral reasons why it was important to burn a 100bn on it).

    In the name of developing the famous Hungarian spa culture small countryside municipalities – in nice bipartizan fashion – built literally dozens of huge wellness spas and swimming pools in small towns from public monies, which – when constructed it turned out immediately that despite the rosy plans – they obviously cannot be operated even with break even, the costs are just too huge (but each cost USD 50-100m to build in towns with 20.000 people). And taxpayers need to pay just to keep them open. But obviously everbodys interest was to build and build, and syphon off money and before the municipalities went insolvent, they nicely were bailed out (still, operation is unprofitable, so these building a constant burden on taxpayers). The Museum Project is exactly the same story.

    This story is a huge scandal, but I guess the interests are just too huge also, dozens of top Fidesz people cant stop hearing hear “katching” and I guess they get MSZP-leaning people on board by offering some fraction of the spoils. This is how they operate.

  2. An added plus that Orban can finally move in to the Castle, as the museums currently in the Castle area will be relocated 🙂

  3. An :
    An added plus that Orban can finally move in to the Castle, as the museums currently in the Castle area will be relocated

    This is behind the huge expenditure indeed – Orban wants to occupy the Royal Castle, so he expels the museums from there.

  4. The facelift given smaller cities has, at least, made them more attractive, more pleasant. Prof Balogh, had you had the spending of those EU funds, on what would you have spent them?

  5. Two remarks:

    Every time we “commute” from Hungary to Germany or back we pass a new Spa/amusement center/whatever in Körmend (Müxxxx – forgot the exact name). It’s been built around five years ago and now has been empty for two years – slowly rotting away …
    Though I don’t know whether it was built with state funds or with private money.

    Here in Western Hungary, especially in Zala Megye there are several small historical museums/archeological sites from the first millennium. We visited as many as we could because the husband of one of my sisters is really interested in Roman/Goth/Avar history.

    Many of them were a sad sight, one could see that they would need more money to be able to present their findings better.

    Totally OT:

    Did you know that there was in Isis Temple in Savaria (now Szombathely) in Roman times ?

  6. Yes, Orbán wants the Castle, remember that he reconstructed the Sándor Palace for billions but ultimately he could not move there because he lost the 2002 elections.

    It’s the president’s office now. But if they slowly move everything out of the palace (the national library too, national galery, other museums) then it will be great opporunities for cronies to build giant concrete stuff again and again and then Orbán can move there and see the world from the top of the hill.

    I guess this visceral feeling that literally everybody is physically below you is very attractive, tickles his fantasy very much. (I guess he is a sick dictator, who has feelings related only to power and money).

    So its the best thing. He can get what he wants, the Castle and his pals (and I also assume he somehow) will get tons of money from the constructions. Yippi.

  7. Sarcastic mode on:

    Eva when you start to learn that VO is never lying, always telling the truth, although I must admit he is not telling everything.

    For example: The calculations mentioned are not phony, but correct. HUF 616,000 is simply divided by 253 to get the EURO amount times 10,000,000 people is EUR 26 billion. As to the HUF 712,000 divided by 273 (a figure used in the calculation of the Hungarian budget earlier) times 7,668,535 people is EUR 20 billion.

    But what VO did not inform us is that the population of Hungary is 7.5 million. Which is the estimated 9.5 mio (CIA factbook July 2012, because the census 2011 are not published yet) minus the Hungarians emigrated to the rest of the EU, USA and Canada around 2 mio.,(see previous article about Roma in Canada).

    Eva: But there is another way of looking at the “historic success” that is much less encouraging. While the overall EU budget was reduced by only 2%, Hungary lost 20% of its subsidies.

    The Budget was not decreased by 2%, but increased by 1.3% (http://www.euractiv.com/priorities/2014-2020-budget-figures-news-517725). A large chunk of increase is caused by

    Sub-heading 1a (Competitiveness for growth and jobs) increase of 38% around 27% of total budget (see previous link),

    and Hungary does not need such amounts, as Matolcsy and Orban did everything in their power to abolish to old ways and introducing the new ways before this budget, therefore, they do not require this amount, and as result the total budget is less than the rest of the EU.

    Sarcastic mode off.

  8. Eva: Hungary was also pleased that the share of EU monies remained 85% instead of 75% of the total cost of projects, as had been talked about earlier. As it is, the Hungarian side has difficulties coming up with its 15% share, and thus a lot of available money is never used.

    Economics Hungarian way. Increase the budget to 100% and on paper Hungary is financing the 15%, but in reality the entire project is financed by the EU.

  9. Wondercat :
    The facelift given smaller cities has, at least, made them more attractive, more pleasant. Prof Balogh, had you had the spending of those EU funds, on what would you have spent them?

    I think this was actually money well spent. In Debrecen and (to a lesser extent) Szeged (just two cities I happen to know) this made a huge difference. It is not only better for tourism, but also lifts people’s spirits (such a change from the grey, grim, run-down state these places were in under communism) and gives them a sense of pride in their city.

    In Debrecen’s case, it’s turned an everyday, boring city centre into a really pleasant place to visit and spend a few hours. We often go in just to walk around or sit and watch the world go by, and the kids love the place to ride their bikes in (in safety) or roller skate. The combination of trees, flower beds, open spaces and fountains, not to mention some of the beautiful buildings that have been very nicely renovated, is so superior to any city centre I can think of in the UK, and many others I have visited in Europe.

    And I have seen no evidence of paving stones coming looses or starting to look shabby. In fact the city centre is very well looked after, both by the authorities and the people. A similar project in the UK would be a waste of time, as no one would care about it and in no time the statues and flower beds would have been vandalised, the fountains would have stopped working (and never get repaired) and the whole place would be covered in litter.

    I know Debrecen is deep in debt and Kósa is a slimy, trumped up little Himmler, but credit where credit is due in this particular case.

  10. Completely OT (my apologies), but we need some help re Wizz Air flights. Has anyone on here flown Wizz Air much? If so, is it normal for prices to drop as you get nearer to the flying date?

    Despite living in Debrecen, we’ve continued to fly into Budapest and get the train, simply because the Wizz Air flights are always so expensive. But we cocked things up a bit this time and ended up booking our Easter flights very late – only to discover that easyJet prices have gone up and Wizz Air’s have come down – so WA is now considrebaly cheaper.

    Thinking WA had seen the light at last and reduced their fares, we then went to book flights for the summer, only to discover the opposite – eJ prices much as normal and WA flights very expensive. Obviously we’d rather fly direct to Debrecen, so is it worth waiting for the WA prices to come down (and taking the risk of higher prices on eJ if they don’t)? Any advice/experiences would be most welcome.

    (Sorry for hijacking HS, Éva but I couldn’t think of where else to ask.)

  11. Paul: I do not have experience with Wizz Air as such.

    However, I use to fly a lot with discount airlines and “normal” ones. The prices are decided as and when other people book, yes or no. Therefore, you need to see it as an auction, the more people use that particular trip it becomes more expensive, if less people are using it, it becomes cheaper.

    Also you may want to use some programs such as skyscanner or cheapflights.com etc.

  12. @WizzAir

    They make money on the luggage. Upgrade luggage size online, if you can (sometimes you cannot). At the airport, they charge much more – more than they advertise on the internet.

  13. Recent experience – 1 checked-in small bag (because you cannot have 2 carry-on bags at all) cost $70 at the airport, one-way.

  14. tappanch :
    Recent experience – 1 checked-in small bag (because you cannot have 2 carry-on bags at all) cost $70 at the airport, one-way.

    A friend of mine sent his luggage by courier from USA to Hungary. Saved him a lot of money. He has a family of father, mother and two small kids.

  15. tappanch :

    Recent experience – 1 checked-in small bag (because you cannot have 2 carry-on bags at all) cost $70 at the airport, one-way.

    That is steep. I just checked here from Connecticut to Florida and back and I was told that the bag would cost me $50.00. That would include to and fro.

  16. @Paul:

    I often use Matrix to search for cheap flights, but it seems Wizzair isn’t in their scope:
    http://matrix.itasoftware.com/
    Funnily enough, when I enter DEB the software offers me flights with TAROM from Oradea (OMR) to LCY as an alternative …

    If you use Matrix you can choose to include “airports in the vicinity” and Oradea is only 40 miles away …

  17. Eva S. Balogh :

    tappanch :
    Recent experience – 1 checked-in small bag (because you cannot have 2 carry-on bags at all) cost $70 at the airport, one-way.

    That is steep. I just checked here from Connecticut to Florida and back and I was told that the bag would cost me $50.00. That would include to and fro.

    The low-cost WizzAir charged this $70 (15,500 HUF) at Ferihegy a week ago.

  18. wolfi :
    @Paul:
    I often use Matrix to search for cheap flights, but it seems Wizzair isn’t in their scope:
    http://matrix.itasoftware.com/
    Funnily enough, when I enter DEB the software offers me flights with TAROM from Oradea (OMR) to LCY as an alternative …
    If you use Matrix you can choose to include “airports in the vicinity” and Oradea is only 40 miles away …

    It is a good software, it is excellent. Thanks.

  19. Although other infrastructure improvement projects would be wiser, I am not necessarily against upgrading Budapest’s museums. In theory at least, they contribute to the tourist trade and help the construction industry. BUT… what happens to the old buildings? If they will be used to house more government offices and officials, then it is a waist of money.

    I can’t help sometimes to compare the size of the Hungarian Government and New York City. Both administer to about the same number of people, yet NYC is satisfied with a relatively small City Hall, where the mayor and his staff share it with a 35 member City Council. The Mayor resides (officially) in a modest historic mansion, Gracie Hall, which would dwarf beside any of the palaces in Budapest. Of course, we too have bloated organizations housed around the city, but I doubt they are as large as the Hungarian state. Plus we are hosts to the world’s largest useless sloth, the United Nations and the 200+ diplomatically immune “embassies” who clog up our streets without contributing tax revenue.

  20. OT: have you checked the home page of the constitutional court?

    Yesterday, it had too interesting cases on its agenda at the conference meeting of the full fifteen members.

    One was the constitutionality of the communist red star. It is currently a crime to wear it in Hungary, but according to the case law of the European Court of Human Rights it cannot be a crime.

    Second case was the constitutionality of the current Hungarian church registration system. While previously churches were regulated by law and the general courts registered (gave them the status of) a church, today the Parliament decides in its sole discretion whether an organisataion may be called or have a status of a church or it is only a simple associataion.

    As you know, a couple of days ago the Orbán government instroduced a piece of legislation to amend the constitution (which was to remain “more lasting than ore” to translate a Hungarian idiom) in a comprhensive manner.

    Most of the measures are clearly meant to override recent case law of the constitutional court. One of the proposed measure is the writing in (direct constitutionalisiation) of the current church regsitartion system (keeping it in th hands of the parliement which can discriminate between churches as it sees fit).

    If I am not mistaken, the content of the government proposal to amend the constituition implies that the government knows excatly what the draft decision (debated yesterday) before the court is.

    It seems that the court, with its last breath would repael the controversial church law (which is also before the ECHR). Two non-completely Fidesz-leaning judges are leaving the court in the coming weeks to be replaced by Fidesz party commissioners so that the majority will be directly Fidesz appointed soon – but note that the soon-to-be minority (previously majority until the number of members was significantly increased to make room for new judges) has been conservative for long time, only less reliably so than the Fidesz appointed ones, and they fought the previous Gyurcsany/Bajani governments in any way they could; there are no liberals at all.

    On the other hand, since I did not see any proposal re the red star in the amendment bill, it seems the constitutional court will disregard the ECHR’s case law and keep the prohibition of the red star as constitutional.

    We will soon see if I am right.

  21. Renovating streets is in theory a nice idea, but two things: they have to be renovated properly (i.e. not done quickly and on the cheap) and be maintained after that.

    Budapest has seen a number of streets renovated in recent years. But it seems that there is a clear difference in quality for high-profile streets and other areas. The streets around Egyetem Ter, St. Istvan Ter and the northern end of Kazinczy utca are beautifully done, and look great. I suspect these were part-financed or project-managed by various religious groups.

    On the other hand, the newly renovated Kiralyi utca started falling to bits not long after it was finally completed in 2004. The same is true of various streets in the Palotanegyed and the southern part of Kazinczy, which – after a year or two – are now cracked and stained, with missing paving slabs and potholes in the pavements (sidewalks) as well as the road. Perhaps the project took the EU money gladly and did the job with the cheapest labour and materials possible.

    In the 8th district, a few months ago (I don’t know about other districts), ‘disabled parking spaces’ suddenly appeared at random on every street. I put this in inverted quotes, since these are simply bits of the road painted blue, with a wheelchair icon, over the still cracked and dog-mess encrusted streets, almost always next to a high kerb.

    No doubt, for this overnight paint job, the 8th district council can tick some EU boxes saying that it caters for the disabled, and stretch out the hand for some more grants.

  22. Bowen: On the other hand, the newly renovated Kiralyi utca started falling to bits not long after it was finally completed in 2004.

    I use to work in that area. Btw this is so very typical. It is a case of bad planning. First they renovate the street, and some housing in the street. And once finished they start to do a major renovation of the udvar just behind the Madach Center, as well as the entire area between the Dob utca and Kiraly utca up to the Nagymezo utca.

    Furthermore, I noticed, qua planning the following. towards the end of last year I spent a few week in various okmany irodak to arrange some stamps etc. Most of them had some kind of Magyarorszag renewed, mostly paid for by the EU. But all relating to administrative upgrade of the offices, new software or new computers, but the rest remain the same. As most of them do exactly the same why not invest in one project for all this type of office. In stead of one by one.

  23. Bowen :
    Renovating streets is in theory a nice idea, but two things: they have to be renovated properly (i.e. not done quickly and on the cheap)

    The city is using EU funds matched by residence to install a new sewage system. The cheap piping they very quickly buried under our street was soooo bad that the street hired a lawyer to sue the city. Basically the system is so fragile that we’d be stuck with a maintenance problem for life. Someone said that this system is used in Germany but I can’t believe that Germans would accept anything like this. I’ve never seen anything like it and I’ve no intention in hooking up to it. I’ve no idea how much the EU is paying and I’m wondering if the EU even cares how the money is being spent.

    OT, my father-in-law told me a while back that a car sales guy told him that model X, a car that I’d never heard of before, was one of the most popular in the US. I’ve no idea how many bought that pack of lies but… Germany story seems of the same ilk.

  24. The truth about Hungarian debt is here

    Forint debt in billions of HUF
    2010 May 10,572
    2013 Jan 12,446

    USD/EUR & other debt in billions of HUF
    2010 May 9,109
    2013 Jan 8,464

    Total debt
    2010 May 19,933
    2013 Jan 21,188

    They also used up the some 2,900 billion of nationalized private retirement funds.

    So the Orban government has increased the total debt by 20.8% in less then 3 years (32 months)

    http://www.akk.hu/object.c693e119-153c-49bc-bc3d-71f805d83db1.ivy

    It is also true that the non-HUF debt has decreased, thanks to the retirement money.

  25. I apologize for occupying too much space in this blog, but have you read this?

    http://www.nepszava.hu/articles/article.php?id=621517

    From March 15, 2014, one has to be careful to criticize government officials for fear of being penalized by the brand new Civil Code.

    Minutes before the final vote, the Justice Minister wanted to take this out from the Code, but the Fidesz party overruled him. So freedom of speech can be restricted to protect those sensitive politicians of Orbanistan.

  26. tappanch :
    I apologize for occupying too much space in this blog, but have you read this?
    http://www.nepszava.hu/articles/article.php?id=621517
    From March 15, 2014, one has to be careful to criticize government officials for fear of being penalized by the brand new Civil Code.
    Minutes before the final vote, the Justice Minister wanted to take this out from the Code, but the Fidesz party overruled him. So freedom of speech can be restricted to protect those sensitive politicians of Orbanistan.

    Presumably this is to help prevent ‘smear’ and ‘hate’ campaigns against Fidesz in the run-up to the election?

  27. Hungarian government issued dollar bonds today on the market
    5 yr bond $1.25 billion paying 4.25% yearly interest
    10 yr bond $2.00 billion paying 5.45% interest.

    Suppose the IMF had given Hungary money for 2.5% interest.

    The Orban government, or rather the Hungarian taxpayers will pay an extra interest of $80.875 million = 17.44 billion HUF every year for rejecting negotiations with IMF.

  28. Thanks to all those who replied to my Wizz Air question (and to Éva for her tolerance of my misuse of her blog!).

    As for the extras charged by Wizz Air, they are no different than most of the other cheap carriers (with the possible exception of easyJet). The trick is to do everything online (WA even charge for non-online checking in!) and not to make any changes – e.g. don’t take extra/heavier bags.

    If anyone else has experience with Wizz Air, especially how their prices change over time, I really would appreciate their feedback.

    We are facing a serious problem with the costs of our flights to and from Hungary, which is threatening to stop us travelling there altogether – we have already had to cancel our Christmas visits as the price of eJ flights has more than doubled over the last few years.

    And now we are looking at paying over £1,200 for our summer flights (they were £400 last year!). These days we have to stick to the school holiday calendar, so we can’t just pick the cheapest days – although £1,200 was actually picking the cheapest days we could, including taking our daughter out of school 3 days early (for which we have been threatened with being taken to court in the past).

    eJ flights definitely DO get dearer as you approach the flight date, so we are caught in a nasty trap – do we book now and take this huge hit, or do we wait to see it WA flights get cheaper, but, if they don’t, face the very real possibility of not being able to afford to fly to Hungary for the summer, or drastically cutting our stay short?

    So, if anyone can confirm that WA prices DO tend to come down, I would very much like to know! Thanks.

  29. “It is also true that the non-HUF debt has decreased, thanks to the retirement money.”

    Does this mean that they actually paid off some of the non-Ft debt with (or effectively with) the retirement money? Or are you just looking at the reduction of the debt and the nationalisation of the pension system and drawing a conclusion (albeit probably the correct one)?

    I’m not being pedantic, it’s just that the issue of Orbán’s ‘stealing’ of the pension money is a topic frequently argued over in my family, and it would be nice to have something more concrete on my side than ‘of course he stole it, you won’t see it again’!

  30. Paul: And now we are looking at paying over £1,200 for our summer flights (they were £400 last year!).
    Did you check out alternative forms of transport, such as by car or by train (although last one tend to be more expensive). Having lately do trips by car in spring, summer and autumn I would suggest by car is much cheaper and you can take much more both way with you.

  31. Paul :
    “It is also true that the non-HUF debt has decreased, thanks to the retirement money.”
    Does this mean that they actually paid off some of the non-Ft debt with (or effectively with) the retirement money? Or are you just looking at the reduction of the debt and the nationalisation of the pension system and drawing a conclusion (albeit probably the correct one)?
    I’m not being pedantic, it’s just that the issue of Orbán’s ‘stealing’ of the pension money is a topic frequently argued over in my family, and it would be nice to have something more concrete on my side than ‘of course he stole it, you won’t see it again’!

    Well he stole it and it had no long term impact at all. This was the argument of the IMF/EU about substantial growth, and there is none.

    http://www.tradingeconomics.com/hungary/government-debt-to-gdp

    http://www.tradingeconomics.com/hungary/gdp-growth

    You can fill out and change the lay out how you want this.

  32. Ron – we don’t have a car, and both kids (and me) are travel sick, so the car option would be expensive and a nightmare! Train is just too complex and expensive (if not effectively impossible!).

    We have used cheap flight sites in the past, but this always involves changing planes in Germany or Holland, and, with two kids and a load of luggage, this just isn’t on (plus they are rarely cheaper anyway).

    Even with flying, our journey from home in the UK to home in Debrecen takes about 12 hours – train to the airport, flight to Bp, train to Debrecen, and, with young children, is exhausting. The new station at Ferihegy cut the time quite a bit (we used to have to go into Bp by bus and Metro and get the train from Nyugati station), but now they’ve closed the second terminal at Ferihegy, we have to take a taxi from the new terminal back to the old one to get the train! (I’ll leave you to imagine what this journey is like, with two kids, two large suitcases, four ‘cabin bags’ (actually medium sized suitcases), a pushchair, and Hungarian summer weather – and invariably the lifts at Ferihegy station aren’t working…)

    So you can see how attractive flying Wizz Air directly to Debrecen is, even if it costs quite a bit more. It cuts the journey time down to about 7 hours, and, more importantly, it’s so much easier. In fact, because the outbound flight leaves so early in the morning, we are staying over at a hotel in Luton the night before, so we’ll be getting up about 7 and will be at home in Debrecen in time for lunch – and the kids get to stay in a hotel!

  33. Paul: Ron – we don’t have a car, and both kids (and me) are travel sick, so the car option would be expensive and a nightmare! Train is just too complex and expensive (if not effectively impossible!).

    The option are going to be limited.

    As to travel by train. When I was a teenager (a long time ago) I use to travel by train (I like trains) via an Europass. I understand it is now called Eurail. I do not know the exact details, but from my nephew I understand that it was very affordable.

    http://www.eurail.com/ kids have 50% discount, group 15% and there is also ferry discount as well.

    As to travel sickness, if you drive (you are the driver not your wife) you cannot become sick, as you drive you focus on one point and therefore you will not become sick. As you kids, either medicine or drive through the night (they sleep). That last thing is what always do, and let them watch dvd.

  34. Ron – I like train travel too, and would love to sit and watch Europe pass by on the way to Budapest. The problem is the reality is far from this. In the early days I did quite a bit of ‘research’ on this and even the best ‘solution’ involved a ferry crossing, changing trains 5 or 6 times, more than a day’s travel, and a lot of money (far more than the then air fare). No way could we do this with luggage and kids.

    As for car travel, I’m fine driving (but NOT on the ferry!), but it’s just not fair to keep dosing my daughter up with tablets (she’d need 4 or 5 lots to get from home to Debrecen) and our 3 year old simply won’t take tablets or medicine. Also, never having had a car, they aren’t used to sitting still for hours, so a two day car journey would be torture for them (and us!).

    I’m afraid (until there is a high-speed rail link from London to Debrecen!), flying is the only realistic option.

  35. And how many times a year do you usually go back to Hungary, Paul, may I ask?
    Once a year is the maximum I can cope with… It’s a shame because I enjoy being in Hungary.
    (We usually change planes somewhere in Europe, and it’s fine. Haven’t flown with WizzAir for a decade, I’m afraid.)

  36. @ Paul & Wizzair
    In recent years, I’ve needed to travel a lot on Wizzair to and from Luton. This was especially after Malev disappeared, and when Ryanair made one of its regular disappearances from Hungary. The only other option would be British Airways, which is for the most part extremely expensive.

    To lower the costs, I had a Wizz credit card, which used to cut the prices down (I didn’t need to pay the 6000 HUF credit card fee for a return) and belonged to the ‘Wizz Club’ which meant every booking was discounted by about 10%.

    I’m not sure these options even exist now, since Wizz Air have become more aggressive in extracting money from passengers. You will now have to pay for your cabin bags too (about 9 Euros, I think, per bag). And they will measure your bags strictly at the airport.

    Ryanair have started pulling out of Hungary once more, which probably explains why they’ve hiked the prices up again. Plus the forint is dropping, which means that the prices will seem higher if you’re calculating in forints.

    To be honest, they do keep on changing their prices in advance of the flying date. The prices may well go down a few months before you travel. This has happened to me: I thought that a flight was expensive, but then the price went down the next time I checked.

    But if you’re flying at a peak holiday time, then this will be a gamble. The airlines will simply calculate what they think customers will pay. And they will lower the price of a ticket only if they think they need to act to fill up the plane.

    To be honest, the only way you’re going to get a cheap ticket these days is if you’re flying in the middle of February at 6 in the morning.

    Oh, and my advice would be to go direct to Debrecen. Unless you’re using taxis, getting out of Ferihegy 2 by bus is just a nightmare. You actually have to fight to get on the bus with all the other travellers, with all their luggage, since the buses don’t come that frequently.

  37. Re the discussion on flights:

    Yes it is a shame about Ryanair practically leaving Hungary – especially for us here at the west end of the Balaton, since we had three flights a week from Sármellék to Stansted. I’ve met a few Brits who bought houses here and now feel cheated – they either have to drive all the way or fly to Budapest or Vienna, which actually is the better option …

    Paul, have you looked for flights to/from Oradea ? Though over the holidays they’re probably very expensive too. My Romanian/Hungarian/German friends now fly from Stuttgart instead of risking that 1500 km drive to Romania …

    We’ve been on the road to the East too (Motorway No 5 and highway no 4) when visiting my wife’s family – I wouldn’t recommend it to anybody, there are a lot of crazy drivers out there.

  38. Paul :
    “It is also true that the non-HUF debt has decreased, thanks to the retirement money.”
    Does this mean that they actually paid off some of the non-Ft debt with (or effectively with) the retirement money? Or are you just looking at the reduction of the debt and the nationalisation of the pension system and drawing a conclusion (albeit probably the correct one)?
    I’m not being pedantic, it’s just that the issue of Orbán’s ‘stealing’ of the pension money is a topic frequently argued over in my family, and it would be nice to have something more concrete on my side than ‘of course he stole it, you won’t see it again’!

    Paul, eurostat has some interesting reports, I think the best may be for you the following pdf file:
    http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/2-22102012-AP/EN/2-22102012-AP-EN.PDF it is a pdf file and you should go to hungarian section, and pay attention in 2011 on the surplus, and compare this with GDP, Debt and debt as percentage of GDP. There is no change.

  39. @Ron
    the eurostat numbers can be misleading.

    I made some calculations. Added the EU support and the nationalized retirement funds to the nominal government debt at the and of each year to come up with some “genuine” deficit number.

    So the “genuine” yearly increase in the Hungarian governmental debt in current HUFs was the following:

    2004: 05.7%
    2005: 10.9%
    2006: 16.2%
    2007: 06.6%
    2008: 15.0%
    2009: 07.3%
    2010: 05.5%
    2011: 17.8%

    You can observe the Socialist relative peaks in 2006 & 2008,
    and the Orbanist absolute peak (so far) in 2011.

    I do not have enough data yet to calculate the increase for 2012.

  40. Tappach I agree fully with you stand alone these figures mean nothing. However, Paul was asking for leverage against his in-laws. According to hi, they claim that taking the pensions was justified due to the fact that Hungary was attacked.

    I am many others are of the opinion that there was not substantial impact, and therefore there was no real reason for “stealing the pension”. In fact I believe this action and one fixed tax rate Hungary is in a negative spiral to total bankruptcy.

  41. cheshire cat :
    And how many times a year do you usually go back to Hungary, Paul, may I ask?
    Once a year is the maximum I can cope with… It’s a shame because I enjoy being in Hungary.
    (We usually change planes somewhere in Europe, and it’s fine. Haven’t flown with WizzAir for a decade, I’m afraid.)

    We originally flew out more or less when we felt like it, and stayed for as long as we wanted (neither of us worked at the time), then, once our daughter started school, this reduced to three times a year – Christmas, Easter and Summer. Prior to the Orbán coup we were considering living there (we have a flat in Debrecen) and even put our daughter in óvoda for a term before she was five (i.e. before the age of compulsory schooling in the UK). But she didn’t get on with óvoda (“baby school”, she called it) and that and the arrival of Orbán decided us against living there.

    easyJet then ratcheted up their flight prices at Christmas, so three years ago was our last Christmas in Hungary (probably for a long time), and subsequent to that we started having problems with my daughter’s school threatening to take us to court if we kept taking her out of school for a few days before the end of term, so that started cutting our Easter and Summer stays down as well (my wife is a teacher in a private school, so gets much longer holidays and I don’t work, so we could easily spend three or four months in Hungary each year if the UK school authorities were more sensible).

    So, we’re now down to just the bare minimum of Easter and Summer school holidays, or in reality less than that, as we can’t afford to fly on the popular days. And, the way prices are going, I can see us only going for 5 weeks in the summer soon.

    I appreciate that to ‘normal’ working families this seems a fantastically long ‘holiday’, but to us, who always aimed at bringing our kids up equally in the two languages and cultures, just a few weeks in the summer is a huge compromise. If it were possible, I would (even with Orbán in power) still prefer to live half the time in each country – at least for our kids’ sake.

    As it is, although both are fluently bilingual, they are inevitably growing up far more English than Hungarian, which is a great shame.

  42. Ron/tappanch – in a nutshell, the ‘pensions’ argument between myself and my Fidesz supporting in-laws is that I say Orbán stole the money because he needed it to reduce the deficit and get the EU off his back, and they’ll never see that money again – it’s gone. Whereas they argue that Orbán was simply doing the ‘right thing’ by the Hungarian people (whom he loves and cares for) by righting the wrong of the Socialists and renationalising State pensions to prevent the poor Hungarians being fleeced by the greedy foreign banks.

    Thus, like most arguments, it’s utterly pointless – both sides arguing purely from conviction and belief and neither having any facts to support their case. Admittedly, even if I had some facts to underpin my opinions, it would make no difference to the worshipers of Our Saviour Szent Orbán, but I at least would feel more comfortable.

    I am a (mostly) rational person who prides himself on having no opinions he can’t back up with facts, and I find the Hungarian situation very difficult because I am so often put in a position where I am basically arguing mostly from conviction and belief (i.e. doing exactly what I accuse my in-laws of doing!).

  43. Of course – lose my wife, abandon my children, put us all into poverty, just because my in-laws are politically naive. Now why didn’t I think of that?

Comments are closed.