Posted on 06/13/2011 5:48:39 AM PDT by Erik Latranyi
This is a tale of two countries in Europe.
Both got in trouble after decades of corruption, sloth, and wasteful spending.
One took the advice of the European Union, the International Monetary Fund, and its richer allies and creditors. It’s now more of a basket case than ever, with a 16% unemployment rate and an economy expected to shrink 3.5% this year.
The other country told the would-be foreign nannies to shove off, and opted for a radical and homegrown remedy. It’s the one that just reported better-than-expected growth of 2.4%, and can boast that its stock market has outperformed every other in the emerging—and developed—world, year-to-date.
The weak sister in this comparison is Greece, and it appears to have sealed its fate by adopting the austerity prescribed by foreign dignitaries. Predictably, tax collections missed estimates as the last vestiges of growth curdled, but the government is now doubling down on the pain to secure a second bailout it has no realistic hope of repaying.
In contrast, Hungary’s center-right government rejected the austerity program prescribed by the IMF. Instead, after winning a landslide election victory a year ago, it embarked on a radical plan widely panned in the West. It included:
the introduction of a flat income tax tax breaks for small businesses surcharges for banks, utilities and telecoms, some of them foreign-owned The Fidesz party, led by the popular (and controversial) prime minister Viktor Orban, also nationalized private pension assets to get by without the IMF’s help.
And, borrowing a page from Franklin Roosevelt, it created a public employment scheme for the long-term unemployed. Hungary has high unemployment too—though it should be noted that, at 11.4%, it’s more than three percentage points below Greece’s.
(Excerpt) Read more at seekingalpha.com ...
Praise Hungary !
They show the way
If I were Hungary I would swallow up Greece.
Despite all the complaints that the pension grab and the tax surcharges would drive foreign investors away, nothing of the sort has taken place.
Because foreign investors are foreign investors, not Hungarian retirees that saw their entire net worth sans hard assets confiscated by the government. One thing we have learned from government is that given the opportunity they will loot and pillage until everyone but Party members are made slaves. The Producers who lost everything to the government can't trust the same government that stole everything to be gracious enough to return even a fraction back, thus the Producers are highly motivated to once again try to scratch back something - this time, not put a single damned Forint in pension.
So what is not to like as a foreign investor? The government is flush with stolen cash, proven Producers are now thrown back out into the jobs market so wages will be depressed as labor supply greatly exceeds demand, and now taxes are leveled so that if one avoids industry that has surcharges imposed on it, the spreadsheets are far more simple to navigate. Contrast that to the Western nations where its more prudent to "invest" at the Craps table than deal with the greater uncertainty of the business climate made FUBAR by each government.
If Russia attacks Turkey from the rear, would Greece help?
sorry, “Greece” and “from the rear” is just too easy a set-up for a comment that’ll getcha banned...
All this proves is that foreign investors are stupid. From this article, I gather Hungary did one or two good things like cut the budget and institute a flat tax. I also gather that they nationalized private property in the form of a pension grab, and instituted “surcharges” on market segments that were foreign, like banks. And their economy is getting a lot of help from the German recovery, upon which Hungary’s economy is very dependent. Why any foreign investor would want to buy into this, I don’t know. But I’m sure they will scream bloody murder for a taxpayer bailout when Hungary nationalizes their investments too.
They are a noble, hard working people who, at the time, couldn't wait to shrug off the shackles of the Russians and socialism. The Polish have a similar attitude.
Agreed. I have nothing but praise for both countries.
From my childhood:
"Austria got Hungary and fried Turkey in Greece"
most like Turkey would like Greece, which would be pretty Bulgar.
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