Economy
Hungary would have gone into default in a matter of hours - Orbán
The recording revealed that Orbán gave advice for Hungary’s future premiers, and he used one of these advices to describe what happened four years ago.
“The Prime Minister needs to know that if in the country’s interest he steps on the toes of too many interest groups with great power they will join forces. A counter power needs to be organised that can combat this," he said.
In this respect he underlined that when you impose a tax on banks, for instance, it must be timed well, let’s say, relative to the taxation of energy companies. Then he went into details how in the autumn of 2011 economic players closed ranks, were given support by the European Union and hedge funds started their offensive against the forint. Hungary’s CDS spread started to rise and “it was perhaps above 700, now it is 150", the forint depreciated and at the Austrian border they started to raise panic against Hungarian banks. This huge pressure could have had the impact that due to sharply rising interest rates the country cannot be financed any longer. Orbán said Hungary was on the verge of this, it was a matter of five to six hours.
“There was such a [huge] pressure, they have formed such a [strong] team that I had to nudge someone out of the hostile position. We had a quick discussion with Matolcsy [who was then Economy Minister - Editor’s note] and announced that after the assessment of the financial situation we are turning to the IMF for help. Then, all at once, most of the financial attacks ceased. And then when the boot was no longer on my throat we did not make a deal," the PM said, according to the leaked recording.
“We announced that we would like the Flexible Credit Line which had then been granted to Poland. They said we could not have it. What a shame, I replied," Orbán recalled in a jovial tone.
During the talk Orbán also mentioned his potential successor and how long he would like to remain in power. He also addressed the U.S.-Hungary relationship and his breakup with his old ally, the billionaire businessman Lajos Simicska.
“The Prime Minister needs to know that if in the country’s interest he steps on the toes of too many interest groups with great power they will join forces. A counter power needs to be organised that can combat this," he said.
In this respect he underlined that when you impose a tax on banks, for instance, it must be timed well, let’s say, relative to the taxation of energy companies. Then he went into details how in the autumn of 2011 economic players closed ranks, were given support by the European Union and hedge funds started their offensive against the forint. Hungary’s CDS spread started to rise and “it was perhaps above 700, now it is 150", the forint depreciated and at the Austrian border they started to raise panic against Hungarian banks. This huge pressure could have had the impact that due to sharply rising interest rates the country cannot be financed any longer. Orbán said Hungary was on the verge of this, it was a matter of five to six hours.
“There was such a [huge] pressure, they have formed such a [strong] team that I had to nudge someone out of the hostile position. We had a quick discussion with Matolcsy [who was then Economy Minister - Editor’s note] and announced that after the assessment of the financial situation we are turning to the IMF for help. Then, all at once, most of the financial attacks ceased. And then when the boot was no longer on my throat we did not make a deal," the PM said, according to the leaked recording.
“We announced that we would like the Flexible Credit Line which had then been granted to Poland. They said we could not have it. What a shame, I replied," Orbán recalled in a jovial tone.
During the talk Orbán also mentioned his potential successor and how long he would like to remain in power. He also addressed the U.S.-Hungary relationship and his breakup with his old ally, the billionaire businessman Lajos Simicska.
