The PM offers a tax cut deal in the following four years, but only in line with the convergence program and only if there is extra income deriving from a much more transparent taxation culture.
The Apollo-affair and the attacks against Hankook reveal the contradictions in the political strategy of Fidesz: the conflict between the opposition position and the pre-government position.
The government will reveal its action plan for Parliament’s autumn session in late August or early September. SZDSZ will decide on whether or not to support the government after they have seen it.
The rise in MSZP’s approval rating last month proved to be a temporary one, so they face the same problems that they had in the spring.
Fidesz is consciously courting economic players, preparing for an early election. The presidential election of SZDSZ has failed to produce a stable situation in the party.
While the detailed economic policy of Fidesz leaders cannot be foreseen from their declarations, it became obvious that the next government also will have a tight room for economic maneuvering.
The National Bank of Hungary (NBH) was criticized by both the Hungarian government and the opposition after increasing the interest rate. We expect the political pressure to increase in the future.
The political environment is becoming less and less advantageous to the government. Fidesz has started a campaign that is aimed at attacking the government on economic grounds.
Economic and political processes in Hungary are extensively influenced by voters’ anti-market and anti-competition sentiments. This has a considerably negative effect on competitiveness
Ferenc Gyurcsány's position has stabilized for the moment, it can only be maintained if he is successful in garnering parliamentary support for the proposals of the minority government.
The US subprime crisis will substantially reduce economic growth in the US and in Europe. As a result, Hungarian exports will likely decline and reduce the chances of a healthy economic growth.
The new government is not likely to initiate reforms and it will possibly enact popular measures to cater former MSZP voters. Ferenc Gyurcsány's has significantly weakened, but he has no alternative.
