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Your quote doesn't support your point. Ambrose is noticing a then new trend at the time the Forint came back from the brink, not the cause of the 2006 movements. The Central Banker is closer to the truth. It has to do with runaway deficits, elections and repercussions, as per my previous comment.

In 2002, the incumbent Fidesz government and the Socialist-liberal opposition ran a heated campaign with outlandish promises. When the opposition won narrowly, the then PM felt they must deliver -- and the combination of Socialist pay and pension increases and liberal tax cuts naturally led to a budget crisis. Nothing much was done about it after that PM was replaced by another Socialist, what's more, the 2006 campaign was again marked by a competition of unrealistic campaign promises. Then the really bad deficit numbers came in quarter by quarter, while the political mess (demand for recounts, riots) left economic players uncertain about what will be done. When PM Gyurcsány geared up in 'reforms' mode, things went back to normal, the Forint was maintained around 250 again.

(I note a subterfuge here: still in 2006, the Central Bank was ruled by a political appointee of the previous, right-wing governent, and there were several public confrontations on economic policy, and mutual accusations of messing up.)

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon Oct 27th, 2008 at 09:01:17 AM EST
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