HUNGARY: Prime Minister Viktor Orban says country must defeat state debt and crisis

Record ID: 560848

  • Title: HUNGARY: Prime Minister Viktor Orban says country must defeat state debt and crisis
  • Date: 9th February 2011
  • Summary: BUDAPEST, HUNGARY (FEBRUARY 7, 2011) (REUTERS) ORBAN TALKING PEOPLE LISTENING (SOUNDBITE) (Hungarian) HUNGARIAN PRIME MINISTER VIKTOR ORBAN SAYING: "It makes no sense to entertain illusions. Everybody knows that things cannot go on like this any longer. If we want to defeat debt everybody who is able to work must work. Without this we cannot defeat either crisis nor debt." VARIOUS OF PEOPLE WALKING IN CITY CENTRE (SOUNDBITE) (Hungarian) ANALYST PETER KREKO FROM POLITICAL CAPITAL GROUP SAYING "This was a speech to prepare sentiment for the very serious spending cuts which the government will announce in the weeks ahead. We have heard nothing about the specifics but it is clear that there is a tough period wrought with hardship and adversity ahead " WOMAN WALKING INTO CURRENCY EXCHANGE BUREAU EXCHANGE RATES
  • Embargoed: 24th February 2011 12:00
  • Keywords:
  • Location: Hungary, Hungary
  • Country: Hungary
  • Topics: Economic News,Domestic Politics
  • Reuters ID: LVADGKTG8USRQ3KQRCTCW3JHRP29
  • Story Text: Hungarian Prime Minister Viktor Orban says defeating state debt and economic crisis are the government's top priorities Hungary's prime minister vowed on Monday (February 7) to defeat state debt which he called "country's main trouble" .
    Prime Minister Viktor Orban, who shocked markets when he broke ties with the International Monetary Fund last year to pursue an anti-austerity agenda, said his main focus would be on boosting employment and cutting debt.
    "There is no other solution but to face the threat. We must know that we can avoid neither the crisis, nor debt. If we do not defeat them, they will defeat us," Orban said in his annual state of the nation address in Budapest.
    "We must and we will defeat state debt, which is the main source of our troubles today. If we do not wrestle it down, it is going to wrestle us down for good," said Orban.
    Orban's pro-growth government is working on a 600-650 billion forint ($3-$3.3 billion) three-year fiscal adjustment plan to stabilise the budget beyond 2012 when "crisis" taxes worth 1.3 percent of gross domestic product are due to expire.
    Expectations for reform and improved market sentiment have lifted the Hungarian forint to nine-month highs below 268 forints versus the euro and sharply reduced the cost of insuring Hungary's debt against a default.
    Orban's remarks revealed no new details about the planned reforms, which he had said would affect spending on pensions, unemployment benefits, drug subsidies and the public transport system.
    The measures are needed to put Hungary's public debt -- rated on the brink of "junk" status by Fitch, Moody's and Standard&Poor's -- on a downward path after a one-off decline this year due to changes in the pension system.
    "It makes no sense to entertain illusions. Everybody knows that things cannot go on like this any longer. For us to defeat debt, everybody who is able to work must work. Without this, we cannot defeat either the crisis, or debt," Orban said, adding that "sustained benefits" were not the solution for those out of a job but able to work.
    Analysts say that Orban's remarks indicated a clear commitment from the government to cut back on social benefits and further steps to support the middle class.
    "This was a speech to prepare sentiment for the very serious spending cuts which the government will announce in the weeks ahead. We have heard nothing about the specifics but it is clear that there is a tough period wrought with hardship and adversity head," said analyst with Political capital group Peter Kreko.
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