Jaksity: "Dancing on the edge" - Hungary to reduce debt or face disaster

"If expectations for a pessimistic scenario are realized, Hungary can expect very bad times ahead. In several areas I haven't the faintest idea as to what could or should be done," György Jaksity said in a panel discussion.

"However, if Hungary fails to reduce its sovereign debt, it will go bankrupt, and the more often we go from one illness into the next the weaker we become."

Jaksity emphasized the importance of bringing debt down to a manageable level which should be Hungary's key priority, citing research which has demonstrated how the economy enters a debt spital once debt exceeeds 60% of GDP.

"There is no alternative to debt reduction, and once you accept this fact, room for maneouver in other areas becomes subordinated to this goal," he said.

In Jaksity's view, the Eurozone political elite has shown they are unable to solve problems; all that is being done is maintaining the illusions of a handful of investors.

"We are dancing on the edge, we have little room for maneouver, the forint and forint assets may soon be liquidated," he said.

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