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Yet another government collapse

by DoDo Mon Mar 30th, 2009 at 04:25:10 AM EST

In recent months, governments toppled in Latvia (twice), in the Czech Republic, and Hungary. Though the international media likes to 'credit' one over-arching factor, the global economic crisis, domestic reasons carried the prime in three out of the four cases.

In Hungary last weekend, at the annual party conference of the Socialist Party (MSzP; which runs the minority government), PM Ferenc Gyurcsány declared his resignation as PM.

Rather than a sign of failure, political analysts saw a cunning move: for, this resignation shut up his inner-party detractors and got him a re-election as party chairman by a high margin -- and, with that, put him in the pilot seat to influence the selection of a new PM.

However, that was a week ago. Today, we have a PM candidate, but the regional bosses of the MSzP forced Gyurcsány to resign as party head, too.

Whatever the outcome (some new PM elected by parliament or new elections), it will be nasty. Update [2009-3-30 8:14:29 by DoDo]: After a long hard struggle, MSZP's new shock therapist candidate seems to have secured a majority -- see comments for details.


Gyurcsány is a yuppie who turned from communist youth leader to bankier and then Bliarite politician (following the recipe of spin + third-way-ist reform). He has been weakened continuously over the last two years. In paticular with the departure of the Socialists' liberal coalition partners a year ago.

Over the past few months of economic crisis, a every big media-present initiative Gyurcsány started foundered. There was his "Reform fellowship", a "national summit". There was his big initiative at the European Council for a safety net for new EU members -- a really stupid idea, concocted without considering that even the less worse-off among the supposed co-beneficiaries aren't all that hot on the idea to be associated with a basket case.

This haplessness was an occasion for some rival potentates within the party to grumble about the necessity of a PM change, right before the annual party congress.

Gyurcsány speaking at the MSzP congress a week ago. Photo by Szabolcs Barkonyi from Index.hu.

Gyurcsány's final downfall must have come because he failed even with his apparent original idea for the government re-start.

The idea was to create some kind of 'expert government', which could then gain the votes of two smaller parties: the Socialist's former coalitioners the liberals, and a centre-right party recently converted to reformism. ('Expert governments' are typically a reformists' wet dream: a couple of economists with the image of clean hands not affected by the daily squabbles of discredited party politicians can ram through changes no one elected them for.)

However, all of the big names brought into play declined. (Including The Moustache of Reform.)

Meanwhile, even the (figurehead) President slipped from his role and advocated the main opposition party's wish: snap elections.

In the end, Gyurcsány still got his most trusted lieutenant chosen as PM candidate. But then he was forced to resign.

:: :: :: :: ::

The man the MSzP named as PM candidate is Gordon Bajnai. Except for the communist past, his personal history is exactly like Gyurcsány's: a 41-year-old yuppie from the financial sector, who switched into politics (brought in by Gyurcsány) only two years ago. He currently holds the economic ministry -- and profiled himself as a would-be more radical reformist...

Gordon Bajnai in parliament last November. from Index.hu.

However, Bajnai's election as PM in paliament is not at all certain. The latest info is that over half of the opposition liberals won't vote for Bajnai. So, snap elections might also come -- then this man will be back:

Ex-PM (1998-2002) Viktor Orbán, eternal leader of the main opposition party, right-populist Fidesz; holding his "state of the country" speech a month ago. (Yes, PR is all for Fidesz, too; in this case more US-inspired.) from Index.hu.

Display:
I wanted to write about this in short on the sidelines of a report on the EP campaign, but events accelerated.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Mar 28th, 2009 at 06:47:57 PM EST
Oh, and needless to say: my photo selection doesn't intend to show the portrayed in their best shape...

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Mar 28th, 2009 at 07:04:09 PM EST
[ Parent ]
A meta-comment: the extent to which the reformists manage to use the occasion of the failure of the system at a global level to further push their catastrophe capitalism makes me tear my hair out.

The worst exhibit is the EU country even worse (actually, much worse) hit than Hungary: Latvia.

  1. PM fires anti-corrupion agency head. Protests errupt, PM resigns.
  2. Bring in a respected former statesman! Former statesman responds to crisis with IMF-advised austerity programme. Massive protests errupt. Parliament fires now not at all respected PM.
  3. Parliament names a 'clean' respected expert next. Clean respected expert introduces even more radical cuts.
  4. ?


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Mar 28th, 2009 at 07:15:15 PM EST
[ Parent ]
  • The choice of Bajnai was not the selecting gremium's first choice: that was the minister of agriculture József Gráf, who is said to be popular within the party (he is also one of the least unpopular within the entire population); but despite getting more votes, he delared he doesn't want the post.

  • Media reports about Bajnai's plans: a spending cut of 600 billion Forints (€2 billion) in social budgets and pensions... as well as decreased subsidies for the state railways... It is a question however, that even if he would get to be PM, he could execute this insanity.

  • Meanwhile, the battle is on within the leadership of the liberal SzDSz, on whether they should support Bajnai -- with the opponents still said to be in majority. (Their reason is not stated in reports.) The twist is: SzDSz is unlikely to wish for new elections, but the Socialists said that they won't bring in a second candidate if they fail with Bajnai.


*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Mar 29th, 2009 at 05:27:56 AM EST
[ Parent ]
What exactly is Hungary's problem that
  1. nobody wants to be in charge of solving
  2. those who try propose outrageous social cuts.


Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
by Carrie (migeru at eurotrib dot com) on Sun Mar 29th, 2009 at 05:34:12 AM EST
[ Parent ]
nobody wants to be in charge of solving

That's not the point. The point, for expert candidates who waved off, is getting parliamentary support and not turning a mere tool of MSzP's struggle for survival. (As for Gráf, he is really a desperation candidate: he doesn't havew much clue about or ambitions regarding things outside agriculture.)

those who try propose outrageous social cuts.

That's the only game in town, for the political elites, only the packaging differs. (Thougfh for Fidesz, that includes praising Obama's programme.) They are clueless and uninspired, even though there are domestic voices advocating deficit spending and calling austerity programmes an idiocy. A(t least a) Kirchner would be needed but there aint'.

The problem this is supposed to solve is of course a "recreation of trust on the markets", by complying with the IMF demand of keeping the budget deficit under 3% of GDP (a GDP which is now expected to fall 4-6% instead of 3.5). (This IMF demand is at least loosened relative to the original demand of near-zero deficits.)

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

by DoDo on Sun Mar 29th, 2009 at 05:49:32 AM EST
[ Parent ]
So the IMF has adopted the Stability and Growth Pact, now?

They could always raise the marginal tax rate...

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith

by Carrie (migeru at eurotrib dot com) on Sun Mar 29th, 2009 at 05:51:50 AM EST
[ Parent ]
The IMF originally wanted the government to keep to or go below its original long-term plan of 2.6% deficit for 2009, even despite the global crisis. The loosening came after a visit by DSK to Budapest in January, and gave the further worsened external conditions as justification -- I guess the similarity with the Growth and Stability Pact is pure coincidence.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Mar 29th, 2009 at 06:04:38 AM EST
[ Parent ]
Adding, methinks this new deficit cuts radicalism (Bajnai's plans go well beyond what's projected to be needed to keep below 3% even if GDP shrinks 6%) goes beyond the IMF, and wants to assuage perceived even stronger demands from "the market".

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Mar 29th, 2009 at 06:07:42 AM EST
[ Parent ]
there are domestic voices advocating deficit spending

I mean, counter-cyclical, crisis-time deficit spending.

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

by DoDo on Sun Mar 29th, 2009 at 06:01:22 AM EST
[ Parent ]
Minutes past midnight today, after three days of marathon talks that descended into a comedy, the Socialists' candidate, Gordon Bajnai seems to have gained a majority in parliament, consisting of most Socialist and liberal MPs.

The decision hinged on getting the endorsement of the liberal SzDSz's split leading body. It is unclear why half of them resisted for long: problems with the person of the candidate (he is a personal friend and former business partner of SzDSz's recently ousted chairman), credibility (SzDSz originally set Thursday night as a deadline for MSzP, then insisted on an expert government), wanting new elections, or something else.

At any rate, while the liberals' leading body voted 7-5 in favour of Bajnai at the end, SzDSz's parliamentary faction gave a much more reassuring 13-4 approval. If not too many Socialists rebel against the neoliberal saviour, that will be enough. So Gyurcsány presented him in Parliament this morning.

The neoliberal saviour did not offer much new specifics about his programme, but he is playing hardball:

  • with the Socialist and liberal MPs: he is said to have demanded MPs to personally sign off his programme, to secure their support;
  • with voters: he says his political life will not extend beyond the crisis [management] -- so he won't be braked by election considerations;
  • with the population at large: he says every family will suffer.

Gah...

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Mar 30th, 2009 at 08:21:38 AM EST
[ Parent ]

a 41-year-old yuppie from the financial sector, who switched into politics (brought in by Gyurcsány) only two years ago.

I need to find myself a sponsor to "bring me in"...

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 29th, 2009 at 06:59:01 AM EST
Do you?

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith
by Carrie (migeru at eurotrib dot com) on Sun Mar 29th, 2009 at 07:02:20 AM EST
[ Parent ]
Do you have experience peddling no-job/no-assets mortgages?  

I don't think wind-mill builders are the sort of people they have in mind. ;)  

The Fates are kind.

by Gaianne on Sun Mar 29th, 2009 at 09:51:21 PM EST
[ Parent ]
How have Hungarian politics been shaped by the 1990/92 decision to keep on servicing previous government debt rather than going the Polish route of getting a large writedown?

This show of "virtue" never seems to have been rewarded by foreign creditors, and seems to have saddled the country with persistently high deficits. Or were things different in the 90s?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sun Mar 29th, 2009 at 07:01:05 AM EST
Some more sensible economists did indeed point at this "best-of-the-class" decision as a reason for lasting troubles; and this is what I referred to when I said a Kirchner would be needed. Then again, the situation could have been better, had the escalating spending spree promises of the 2002 election campaign not been fulfilled in a way that blew up the deficit again.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Mar 29th, 2009 at 07:41:31 AM EST
[ Parent ]


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