Economy
Hungary's plan to "buy back E.ON" makes it to foreign papers again
FAZ journalist Michaela Seiser wrote about Hungary eyeing E.ON’s local interests, saying Prime Minister Viktor Orbán takes yet another attempt to take key economic sectors under state control. She said Orbán’s plans will create a conflict with the European Union, adding that it is “dubious" how this “pile of debt" amounting to four-fifths of GDP could be financed by “renationalisation", Hungarian newswire MTI reported.
Die Welt published an analysis by Boris Kálnoky (Is Hungary a role model for Greece?). The author said Greece and Hungary are struggling with similar problems, but unlike the Greek administration the Hungarian government is not employing privatisation and downsizing public administration to remedy the problems, rather it expands the state sector and buys back strategically important companies that were privatised after the change of regime.
Kálnoky noted that Orbán’s economic policy is criticized in the West for its unpredictability, while it is “in fact cunning" policy. The objective is to enhance the role of the state, but the means to this end is not repatriation rather than making life for of certain foreign concerns so difficult that in the end they choose to sell their Hungarian interests.
He added that in Hungary it is “not new communism in the making but a new etatism" which determines where could private enterprises operate and which are the areas where the “state needs to hold the reins".
Apparently, the Hungarian model of crisis management is in contrast with Brussels recipe and this causes friction with the EU, Kálnoky said, adding though that “some things are in favour of the Hungarian model". The author of the article noted that the problem of the Roma who had lost their jobs during the change of regime has become so stressing that “a quick solution needs to be found, but the open market does not offer a solution."
Polish conservative daily Rzeczpospolita said today the great success of the Hungarian cabinet is that it has survived “in the constant crossfire of Brussel (and to some extent Washington) canons", while “it has been engaged in a complicated game (also) with Moscow."
The paper praises the country for shrugging off outside opinions and does not degrade its own nation when comparing it with western European peers. It said the majority of Hungarians do not find the country’s alternative route compromising or fatal.
It also stressed that the Hungarian government’s objective, among other things, is to restore democratic contents in politics. This is why every democrat, irrespective of their political affiliation (rightist or leftist) “should cheer for Orbán’s success in conflicts with western elites."
Not the first time
Earlier this week German papers have already addressed this issue, slamming the Orbán for his plan to repurchase E.ON’s gas business.
Die Welt pondered how would the country, which is struggling with massive debt, would be able to finance the transaction.
Handelsblatt noted that Hungary is a great challenge for the European Union for its persistent budget deficit, the structural weaknesses of its economy and PM Viktor Orbán’s populism.
Financial Times Deutschland wrote in an article and an editorial comment that that the Orbán cabinet’s “nationalist economic policy" has been threatening foreign investors for some time now. As an example it mentioned the sectoral taxes that caused more than just a headache for several German enterprises. FTD cited a survey conducted by the German-Hungarian chamber of commerce that found 87% of German-owned companies in Hungary find the unpredictability of the cabinet’s policies problematic.
The editor’s note went even further than that, using the phrase “goulash communism" a number of times. The editor said Orbán’s policy involves not only a reduction of democratic rights and total negligence to separating ‘powers, but it is also driven by pulling the economy under state control. The editor also emphasized that a company will not be able to bargain more favourable prices with the supplier only because it is owned by the state, but by strengthening its presence it may significantly discriminate price competition on the market.
FTD’s editor added that on top of the aforementioned Orbán’s policy reduces investors’ confidence, which is already in shambles. No investor will like a country that prohibits its companies to make profit, leaving losses as the only business option for them. FTD said Hungarians cannot win with this policy in the long run, while voters will decide (who to vote for in the elections) on the basis of whether their situation is better or worse. “But it seems Orbán has a different goal," the editor concluded.
Die Welt published an analysis by Boris Kálnoky (Is Hungary a role model for Greece?). The author said Greece and Hungary are struggling with similar problems, but unlike the Greek administration the Hungarian government is not employing privatisation and downsizing public administration to remedy the problems, rather it expands the state sector and buys back strategically important companies that were privatised after the change of regime.
Kálnoky noted that Orbán’s economic policy is criticized in the West for its unpredictability, while it is “in fact cunning" policy. The objective is to enhance the role of the state, but the means to this end is not repatriation rather than making life for of certain foreign concerns so difficult that in the end they choose to sell their Hungarian interests.
He added that in Hungary it is “not new communism in the making but a new etatism" which determines where could private enterprises operate and which are the areas where the “state needs to hold the reins".
Apparently, the Hungarian model of crisis management is in contrast with Brussels recipe and this causes friction with the EU, Kálnoky said, adding though that “some things are in favour of the Hungarian model". The author of the article noted that the problem of the Roma who had lost their jobs during the change of regime has become so stressing that “a quick solution needs to be found, but the open market does not offer a solution."
Polish conservative daily Rzeczpospolita said today the great success of the Hungarian cabinet is that it has survived “in the constant crossfire of Brussel (and to some extent Washington) canons", while “it has been engaged in a complicated game (also) with Moscow."
The paper praises the country for shrugging off outside opinions and does not degrade its own nation when comparing it with western European peers. It said the majority of Hungarians do not find the country’s alternative route compromising or fatal.
It also stressed that the Hungarian government’s objective, among other things, is to restore democratic contents in politics. This is why every democrat, irrespective of their political affiliation (rightist or leftist) “should cheer for Orbán’s success in conflicts with western elites."
Not the first time
Earlier this week German papers have already addressed this issue, slamming the Orbán for his plan to repurchase E.ON’s gas business.
Die Welt pondered how would the country, which is struggling with massive debt, would be able to finance the transaction.
Handelsblatt noted that Hungary is a great challenge for the European Union for its persistent budget deficit, the structural weaknesses of its economy and PM Viktor Orbán’s populism.
Financial Times Deutschland wrote in an article and an editorial comment that that the Orbán cabinet’s “nationalist economic policy" has been threatening foreign investors for some time now. As an example it mentioned the sectoral taxes that caused more than just a headache for several German enterprises. FTD cited a survey conducted by the German-Hungarian chamber of commerce that found 87% of German-owned companies in Hungary find the unpredictability of the cabinet’s policies problematic.
The editor’s note went even further than that, using the phrase “goulash communism" a number of times. The editor said Orbán’s policy involves not only a reduction of democratic rights and total negligence to separating ‘powers, but it is also driven by pulling the economy under state control. The editor also emphasized that a company will not be able to bargain more favourable prices with the supplier only because it is owned by the state, but by strengthening its presence it may significantly discriminate price competition on the market.
FTD’s editor added that on top of the aforementioned Orbán’s policy reduces investors’ confidence, which is already in shambles. No investor will like a country that prohibits its companies to make profit, leaving losses as the only business option for them. FTD said Hungarians cannot win with this policy in the long run, while voters will decide (who to vote for in the elections) on the basis of whether their situation is better or worse. “But it seems Orbán has a different goal," the editor concluded.
