downgrade pushes hungary deeper into crisis
Last Updated : GMT 10:16:43
Arab Today, arab today
Arab Today, arab today

Downgrade pushes Hungary deeper into crisis

Arab Today, arab today

Arab Today, arab today Downgrade pushes Hungary deeper into crisis

Budapest - AFP

Hungary grappled Friday with a downgrade of its credit rating to junk bond status and sharp criticism of its economic polices, pushing it further into crisis. Late Thursday, Moody\'s rating agency downgraded the country\'s sovereign debt to non-investment grade for the first time in 15 years, sending the forint crashing to 317.25 against the euro, near its all-time low. Budapest blamed this fall from grace on the eurozone crisis and gloomy international market sentiment, but analysts, opposition parties and investors castigated the policies of Prime Minister Viktor Orban\'s government. Moody\'s and fellow ratings agency Standard and Poor\'s highlighted the \"weaker predictability and credibility\" of the government. While the forint has sunk by nearly 20 percent against the euro in recent weeks, the Polish zloty has slid by 11 percent and the Czech koruna just five percent. Under pressure from the markets and in a bid to stave off ratings downgrades, the government finally turned to the International Monetary Fund and the European Union for assistance earlier this week. It was a policy U-turn for Orban who until then had always advocated independence, although Economy Minister Gyorgy Matolcsy boasted on Thursday of \"the success\" of the government\'s economic policies. He trumpeted they \"can only be compared to the reconstruction of the country after World War II.\" The centre-right government has prided itself on slashing the country\'s sovereign debt and producing a budget surplus in 2011. But one-off measures put in place to reach these goals such as the windfall tax on banks, telecommunication, energy and retail sectors and the nationalisation of private pension funds have failed to offset the effects of income and corporate tax cuts. A recent measure allowing the repayment of foreign-currency-denominated mortgages at 20 percent below prevailing market rates also angered the financial sector, which is dominated by European banks, and triggered a sharp response from the European Central Bank. Nevertheless, Budapest interpreted the growing market discontent as a \"series of speculative attacks.\" Orban launched a probe into who might be behind \"a conspiracy against the forint,\" even as Hungary\'s currency fell to record lows and investors shunned Hungarian debt for safer investments. \"This rhetoric perfectly suits the communication style of the Hungarian government,\" Matyas Kovacs, an analyst at Raiffeisen Bank, told AFP. \"But the higher the bond yields climb, the higher the pressure will mount on the government to find a common ground with the IMF,\" he added. Budapest has some leeway however, as two of the three major rating agencies are still maintaining Hungary at investment grade, noted Kovacs. Standard & Poor\'s said Thursday it was holding off an expected downgrade of Hungary until it sees what kind of agreement it reaches with the IMF and EU, and also criticised government policy. \"It will hurt more when we fall into junk status at two agencies, as that is when large American funds start selling Hungarian bonds,\" Kovacs added. Peter Kreko, head of the analyst firm Political Capital, meanwhile warned that Hungary\'s economic turmoil could turn into a political crisis, and that a lack of agreement with the IMF could lead to Orban\'s fall. Although the prime minister\'s Fidesz party has a two-thirds majority in parliament, \"if a country finds it cannot finance itself, even the strongest politicians might be forced to leave,\" Kreko said. This did not necessarily mean that new elections were forthcoming, but \"a new majority might be created behind a Fidesz figure who possesses the economic knowhow to present a credible economic policy,\" he predicted. The opposition has already called for Matolcsy to step down, blaming him for the government\'s unorthodox economic policy, which has been dubbed \"Matolcsism\" in Hungary. A government spokesman insisted Friday however that: \"Matolcsy is here to stay.\" At the close of business, the forint had recovered slightly to 315.46 against the euro, after hitting 317.25 in the morning.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

downgrade pushes hungary deeper into crisis downgrade pushes hungary deeper into crisis

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

downgrade pushes hungary deeper into crisis downgrade pushes hungary deeper into crisis

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Visit Jamaica for more than just sun

GMT 09:45 2017 Tuesday ,21 November

Visit Jamaica for more than just sun
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today UN warns of conflict in Gaza

GMT 08:39 2017 Tuesday ,21 November

UN warns of conflict in Gaza
Arab Today, arab today Missouri problem mirrors woes

GMT 06:46 2017 Tuesday ,21 November

Missouri problem mirrors woes
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today VW says will invest over 34bn euros

GMT 07:19 2017 Tuesday ,21 November

VW says will invest over 34bn euros
Arab Today, arab today Driverless, electric future just round

GMT 02:45 2017 Monday ,20 November

Driverless, electric future just round
Arab Today, arab today Fedra happy for “Between Two Worlds” success

GMT 09:23 2017 Saturday ,18 November

Fedra happy for “Between Two Worlds” success
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 12:15 2017 Friday ,17 November

Mona Abdel Ghany increased artistic activities

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 02:28 2017 Saturday ,18 November

Anti-drug operation nets 4 tonnes

GMT 03:12 2017 Saturday ,18 November

Prince's vision spurs new Cornwall village

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday