Vienna, June 13: Hungary’s prime minister said Friday that he is confident a new package of economic reforms will help his country survive the debt crisis, despite remarks by some in his government that a Greece-like meltdown is possible.
But in a sweeping and at times critical and sarcastic speech, Viktor Orban also acknowledged that challenges lie ahead and due to “falsification” of data in previous years, it is tough to tell what the country’s real economic situation is.
Recent comments by Hungarian officials that the country could enter a debt crisis like Greece’s dragged down both the euro and the Hungarian forint.
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Market jitters have since eased but analysts have said what matters now is implementation of Hungary’s proposed reforms, which include an overhaul of the tax system and cuts to the public sector. The so-called action plan also foresees a bank tax and a ban on foreign exchange mortgages.
“The Hungarian economy was weak, uncertain … but the new era has begun when the new government announced its first action plan,” Orban told members of the Institute of International Finance, meeting here, in Austria’s capital. “May I say to you that we have quite a good chance to survive.”
Orban, whose center-right Fidesz party won a two-thirds majority in parliament in April elections, accused the previous Socialist government of submitting wrong economic numbers.
“I have to say that because of a lot of falsification we have suffered in the previous years, it’s difficult to say what the real figures are,” Orban said. “But we have some estimation.”
Earlier this week, Hungarian Economy Minister Gyorgy Matolcsy said his government would strive to meet the 2010 budget deficit target of 3.8% of gross domestic product, set by the previous administration, downplaying comments by other officials last week suggesting the deficit could reach 7%-7.5% of GDP and that the country is close to defaulting on its debts.
In other comments to the roomful of bankers gathered for lunch in Vienna’s Hofburg palace, Orban said Western capitalism has to be reformed and is to blame for the current global financial crisis.
“This is primarily a crisis of Western capitalism,” Orban said. “In a sense we are talking about the crisis of Anglo Saxon-type capitalism.”
–Agencies