Hungarian Rescue Plan

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I must admit I didn’t know Hungary was until recently considered an economic powerhouse of Eastern Europe. My limited time there last week left me with neither the impression that it was an extremely well off country, nor the opposite. At the same time I did notice plenty of construction projects seemingly left unfinished, and infrastructure (like public transport) that looked like it hadn’t received new investment since the 1980’s.

There was talk among Hungarians and expats that I met about the terrible economy, with many expressing that it hadn’t been that bad in a long time. But even then it wasn’t obvious to me how bad it really was.

Today I read about the rise and fall of the Hungarian economy, and immediately following that, the plan to pump money into that economy. Among the reasons for its fall? A government burning through alot of money and taking on alot of debt. One of the lowest employment rates in Europe.

With the IMF’s 25.1 billion dollar bailout of the Hungarian economy, it isn’t clear – as is so often true with bailouts, if this will turn things around. The term “tighten their belts” is thrown around alot. Which begs the question, at a time when so many people are in need of help, where can the government afford to make deep cuts without doing harm to an already wounded citizenry. Then again, I noticed Hungarians are tough, maybe tightening of the belt is precisely something they would be up for.