The state at the Rába wheel again

The main pro-government daily welcomes the government’s decision to buy up the shares of the Rába automotive company, as a sign that even amidst the current financial crisis, Hungary’s leaders try to invest in the future.

“The state can be a good owner” – Matild Torkos asserts in her editorial in Magyar Nemzet, in response to an oft repeated liberal commonplace (“The state is the worst possible owner”).

The company used to be one of the jewels of Hungarian industry before the régime change, producing trucks and chassis for buses, but lost much of its market share when Western competition suddenly appeared in the 1990s. The state holds at present a 16.15% stake in Rába, and intends to buy all the outstanding shares. 66% of them are free floating, and since the government’s bid is 30 per cent above the market price, small shareholders are expected to be  only too happy to sell. Malaysia’s DRB Hicom Group holds just over 10 per cent. The remaining 7 per cent plus, is held in treasury bonds owned by the company.

According to Matild Torkos, the Malaysians are ready to sell their package, because the company has been consistently loss-making for the past three critical years. The right-wing commentator thinks the announcement carries a clear message: the recession will come to an end one day and the future must be invested in.

“This is a totally different philosophy to that of the (formerly governing) Socialists. They sold and used up everything they could lay their hands on.” In fact, Torkos continues, the left-wing opposition objects to the government’s plans, saying that the state has no business in manufacturing, and should only be present in the market as a regulator. However, she remarks, the left-wing governments failed even to regulate the markets, which is why Hungary lost its sugar-production quotas and the citizens became indebted in foreign currencies.

Magyar Nemzet’s columnist remarks with satisfaction that the automotive industry is a strategic sector in today’s Hungary, unlike under Communism, when such endeavours were foiled by the Soviet Union.

While she welcomes the government’s plan to buy up the Rába shares, Torkos reminds decision-makers of the sad state of another strategic sector, agriculture (and the food industry) where, she believes, most of the hundreds of thousands of new jobs promised by the government could be created.

Tags: economy, nationalisation