Basically, Hungary is pursuing a harsh, seemingly endless austerity program, and keeping interest rates relatively high, in an effort to support its currency. This in turn is considered essential because (a) Hungary wants to join the euro (b) there’s great fear that a devaluation of the forint would cause big debt problems, because so much Hungarian private-sector debt is in other currencies — euros, and even Swiss francs.
About (a), I guess the question is at what price? About (b): there’s a major logical fallacy in this whole line of argument. I tried to point it out in a post last year about Latvia.”