Hungary seen avenged by EU downgrade

Magyar Nemzet believes that what its editors always saw as double standards in judging economic policies came to an end when Standard and Poor’s stripped the European Union of its top credit rating just before Christmas. The commentator cautions, however, against premature triumphalism, despite the first signs of recovery in Hungary.

In her Magyar Nemzet editorial, Anna Szabó is glad to agree with much of the diagnosis spelled out in the unpleasant “Christmas gift” prepared for the EU by S&P: “for once they happen to be right on some points”. In fact, she continues, despite  victory statements from Brussels, recession is still far from over in 9 of the 18 Euro-zone countries, with five still kept afloat by the IMF and the European Central Bank. She quotes liberal Nobel Prize winning economist Joseph Stiglitz to paint a picture in which money is being channelled from poor countries to rich ones, with the mountain of public debt getting higher and higher, despite repeated restrictive measures applied everywhere according to the European Commissioner Olli Rehn’s “mistaken recipe”.  Meanwhile, Central and Eastern Europe is showing signs of recovery, including Hungary whose 2 per cent growth “cannot be attributed to good weather alone”. Szabó warns, however, that the first signs of growth, coupled with low inflation and a positive foreign trade balance should not prompt exaggerated optimism. “If one does not want to apply double standards, one should avoid triumphalism both in the East and in the West”, she concludes.

Tags: credit-rating, downgrade, EU