Portfolio blogger

Wednesday, May 29, 2013

End of the excessive deficit procedure and publicity tax

The European Commission is proposing to the Council to release Hungary from the excessive deficit procedure. This is good news as the procedure has already lasted so long that remaining in it would mean loss of cohesion funds for the country. Given that 95% of public investments are financed partially from EU funds, this would have meant a grave blow to the Hungarian economy and also food for further “liberty fight” demagogy against the EU. On the other hand, it is a triumph for the Orbán government and some fear that by that the EU is losing leverage in constraining the Hungarian government in its economic and political actions which are harming the country and going against European democratic principles. The dilemma is not easy to resolve, almost impossible, like most of the dilemmas which are caused by - the contradiction that whenever the government is sanctioned, it is the people who pay the price and - the communication tricks which make the EU a scapegoat if it is acting and a weakling if not. Whoever followed the developments can, however, see through these tricks. As if to help this, the European Commission reiterated again the need – in the form of concrete measures proposed – for a more sustainable public finance. Nevertheless, it could not deny that with the latest measures (actually with the latest but one package of measures – let’s return to that below) the deficit will be under 3% of GDP for the rest of the term of this government. And this is what counts when deciding about the procedure. The latest measures are already the second tranche since the new Minister of the Economy, old-time FIDESZ economic heavyweight Mihály Varga took over – saying in his inauguration address that no further measures are necessary. But a third tranche was also in preparation. This included a tax on publicity revenues of media. Varga said yesterday that it will be introduced only when measures announced before are not sufficient. Today András Giró-Szász, the government spokesman announced that “in the interest of common burden-sharing” it will still be introduced. The statement of Varga – taken into account that the European Commission has initiated infringement proceedings against the sectorial extra taxes already – could be seen as a clever blackmail: if the Commission does not release Hungary, they can be blamed for that tax, if they do, they gave in to save the multinationals from this tax and by threatening them, the government cleverly got out the country from the excessive deficit procedure. The tax will in fact cut further into the profits of the two commercial television channels, one of which, already making losses, is under negotiation to be purchased by the strongest company group which wins almost all public procurements in Hungary and whose owner is the main financial expert around FIDESZ – more exactly, he was treasurer of the party and is expert in party and campaign financing and also owns most of the poster sites in town – which may not be without link to the fact that election publicity is enabled on these posters while prohibited in a number of other commercial media, including commercial tv. No further comment is needed, I assume.

Monday, May 27, 2013

Voting patterns again

Votewatch published the voting patterns in the European Parliament on the mandate for the EU-US trade agreement: The Hungarian EPP delegation casted the most abstentions, some French and German MEP-s from the EPP voted against see here There were some more votes against by members of the ESD group, also French and Germans. Another vote on an amendment showed the following: German and Estonian EPP members cast against votes and also most ECR and ALDE MEPs (except for French, Italian and Bulgarian delegations) opposed the exclusion of cultural and audiovisual services from the mandate, as did a minority of Members of the EPP (German and Spanish delegations, while most of the Italian delegation didn’t vote) and S&D (UK and Danish delegations in their entirety).