2011. augusztus 01. 12:28

Non-decreasing debt, increasing deception – more facts!

The real losers of the crusade of the second Orbán-government against the sovereign debt, –which is in fact a (revenge) campaign against the previous governments – are the citizens, who unfortunately can not judge clearly what and why has happened in Hungary over the last eight, ten, or even twenty years because of the propagandistic sand-storm of the Fidesz-KDNP coalition. In order to provide the people with factual information from now on the Hungarian Socialist Party presents every year an overall economic and fiscal report based on the expertise of experts and professional organizations.

The LMP and the Socialist Party have not participated in the joint subcommittee of the Fidesz-KDNP and the Jobbik, examining the growth of public debt. The resolution of the committee confirms that the decision to abstain was right. While all prime ministers and finance ministers appeared before the committee and provided extensive information in their testimonies, the resolution lacks all reason, flouts all facts and is impetuous. Therefore the Socialists will prepare each year a comprehensive report based on the opinion of the experts and professional organizations to empower people to learn the truth.

The Socialist Party considers as important the thorough examination of the evolution of public debt over the past twenty years, because this provides important lessons for the future. It is also necessary because of the Fidesz-KDNP government misguides people. This was clearly demonstrated, when they announced an “unprecedented reduction” of the public debt by 4 percent, which however was actually nothing more as a compensation for the increase of debt caused by their government.

But even this was only a semblance because they nationalized the accumulated savings of the private pension funds, and reduced thus the debt by the gained government bonds, which is nothing else as an elimination of government debt toward the people. Nor is it true that this reduction would be unique. Between 1994 and 1997 the Horn government reduced the rate of debt to GDP from 90 percent to 62 percent, which equals an average annual reduction of 9 percentage points, – more than double that Viktor Orbán is now proud of.
Against the accusations of the joint Subcommittee of Fidesz-KDNP and Jobbik the reality is that no right-wing government had so far reduced the public debt, and not only the socialist-liberal governments have increased it. Under the right-wing government between 1990-1994 the public debt rose by 90.7 percent. Thanks to the Horn government it had been reduced to 52-56 percent between 1994-2001. It increased between 2001-2007 to 65.9 per cent.

Big difference is that while under the right-wing governments the increase of the debt was caused by privileges granted to the privileged, the left-wing governments made debts to increase the low subsistence of pensioner’s and to finance on infrastructure developments.

The government debt, as in several other European countries, exceeded 70 percent in consequence of the crisis. But due to the consolidation measures undertaken Hungary is now considered as one of the most stable countries. But the austerity measures of the current right-wing government elected are not only unjust, but also hinder the economic growth, do not create new jobs, and do not provide protection to the vulnerable.

Imre Szekeres
Chair of Economic Policy Cabinet of the Socialist Party