Orbán’s central bank attack is self-defeating 28 Apr 2023 Hungary’s premier has picked another fight with Europe by meddling with the country’s rate setter. That could complicate the release of over 10 bln euros of frozen EU aid. With sky-high inflation and zero growth, the autocratic leader may soon face a foreign investors’ strike.
Three carry trades for a new monetary policy era 27 Jan 2023 Central banks’ moves mean that investors borrowing money in yen and placing it in U.S. assets – a once-popular “carry trade” – are no longer onto a sure-fire winner. They can do better by shorting the euro and investing in Mexico, Brazil or Hungary.
Economic chaos will break Orbán’s strongman spirit 20 Dec 2022 The Hungarian leader needs EU funds to prop up his country’s struggling economy. With inflation at 20% and the forint in free fall, social unrest is brewing. Backing down on civil rights restrictions and tackling corruption would be a small price to pay for the EU’s support.
Inflation raises stakes in Hungary’s EU war 17 Jun 2022 PM Viktor Orbán’s tight political grip largely kept investors happy. Yet inflation fears are now pushing the forint to record lows. Unlocking 7 bln euros in EU funds could restore the autocrat’s power-and-prosperity sweet spot. That makes his hostility to the bloc more costly.
Central Europe is monetary policy’s control test 8 Nov 2021 The Czech, Polish and Hungarian central banks are hiking interest rates, the traditional riposte to rising inflation. In contrast, peers in major economies are responding less aggressively to price pressures. That makes for an interesting experiment.
Poor-country central banks will go awry aping Fed 4 May 2020 Rate-setters from Indonesia to Hungary are copying Fed Chair Jay Powell by buying bonds. Others could well follow. That will curb borrowing costs at a time of rising public spending. But these policymakers run bigger inflation and credibility risks than their developed peers.
Orbanomics may be Hungary’s best political shield 6 Apr 2020 Covid-19 has enabled Viktor Orban to rule by decree. Busy with the virus, the EU may fail to stop abuses. But the prime minister's power grab may be limited by Hungary's economic reliance on foreign investment, which gives the like of BMW more scope to register disapproval.
Vodafone’s $22 bln deal is worth financial strain 9 May 2018 The UK mobile group is buying Liberty Global’s German and eastern European assets. Boss Vittorio Colao is funding the deal with debt and funky convertible bonds. He can point to juicy cost savings to quell any concerns about Vodafone’s creaky balance sheet.
Hadas: Even Trump can’t make graft great again 11 Apr 2018 Resistance to corruption is evident in cases against ex-leaders of South Korea, Brazil and South Africa. Old royal privileges make no sense in modern economies. U.S. officials and the corporate elite have strayed, but rising middle classes will keep straightening out the crooked.
Where to put Europe’s bank regulator? Try Bulgaria 26 May 2017 Brussels has invited member states to bid to host the European Banking Authority when its current host, Britain, quits the EU. The EBA hasn’t exactly dazzled in its handling of bank stress tests. But it could be a decent trophy for a non-euro country that feels unloved by the bloc.
Dimming Olympic flame casts long shadow on bloat 1 Mar 2017 Budapest saw the light and became the fourth city to drop its bid for the 2024 Summer Games, leaving only Los Angeles and Paris in the race. With the ranks of potential hosts getting exhausted, one good way to save the global athletic fest would be to cut events back to basics.
Hungary throws straw on Europe’s values bonfire 3 Oct 2016 Only a minority voted against EU migrant quotas. Yet almost no one voted for them. Like Britain’s Brexit supporters, Hungarian nationalists want both the benefits of free trade and control of immigration. Europe can resist, but the calls to blunt its ideals are getting louder.
Erste deal sees Hungary’s Orban thaw on banks 9 Feb 2015 The Austrian lender is to sell 15 pct of its Budapest-based business to the Hungarian state. Prime Minister Viktor Orban will cut a swingeing banking tax, while Erste will lend 550 mln euros in-country. Hungary’s growth prospects make this a mutually beneficial arrangement.
Foreign banks’ tricky call on Hungary: stay or go? 18 Nov 2014 Prime Minister Viktor Orban wants more of the banking sector owned domestically, and one foreign lender has already quit. The concern is that high-handed regulation intensifies. Yet Budapest’s bank supervision is not yet so unreasonable to make leaving a no-brainer.
Edward Hadas: Illiberal economics is here to stay 15 Aug 2014 The majority of voters in Russia, Turkey and Hungary have all endorsed governments run by charismatic and bullying strongmen. China seems to be getting more authoritarian too. The economic problems with these arrangements are large. But that doesn’t mean the systems are doomed.
Erste’s eastern problems are partly self-inflicted 4 Jul 2014 The Austrian bank’s shares sank 14 pct after nasty surprises in Romania and Hungary led it to predict a 1.5 bln euro loss this year. The charges should be one-offs, and Erste doesn’t need capital. But the bank has to be more cautious about business in its riskier outposts.
A decade on, some EU values still look strong 2 May 2014 Eight of the 10 countries which joined the union on May 1, 2004 were former communist states. Since then both old and new members have gained, economically and culturally. The EU has proved remarkably strong. But its financial and political values look far less robust.
Baiting the EU will only go so far for Hungary 7 Apr 2014 Viktor Orban won re-election with Brussels-condemned policies such as a flat tax, a floating exchange rate and levies on foreign companies. But his populist disdain for property rights can do long-term damage and his big Russian deals are risky. More orthodoxy will work better.
Hungary’s budding market success may not last 6 Mar 2013 Investors seem hungry for Hungary. Last month Budapest raised funds from the market for the first time since 2011, luring buyers with high returns and improved finances. But the government’s erratic agenda ahead of a 2014 election could curb future appetite for the country’s debt.
Warning: emerging economies can go backwards, too 3 May 2012 Bolivia has followed Argentina in the pointless nationalisation of Spanish-owned assets. Argentina is fiddling with its central bank, as Hungary tried to. The obstacles to growth in emerging economies can be large. Investors should beware. Emerging economies can go down as well as up.