Hungary – No farewell to fiscal discipline

"Orbán’s critics were quick to argue that by lifting the EDP, Brussels would give up the only effective method to exert pressure on the 'unorthodox' leader from Budapest.

As Attila Mesterházy, the leader of the opposition Socialists, put it: 'Once this constraint disappears, Orbán is up for a pre-election spending spree.'

It may work well as a political argument, but is a farewell to fiscal discipline really dependent on the EDP decision? I’m sure it is not – and for several reasons. (...)

As Orbán argues, Hungary’s fiscal deficit was under 3 per cent of GDP in both 2011 and 2012 and, according to budgetary projections, will remain so in 2013. Yet a positive decision by the EU seems far from certain because the almost religious debate over Orbán’s economic policies is a never-ending story; the European Commission, the International Monetary Fund and market analysts, either singly or in combination, are continually voicing concerns as to the sustainability of Hungary’s fiscal path.

This all explains why, according to Orbán, 'getting the EDP lifted is not a political or an economic question for Hungary, but a moral one.'"