Much as we hate to start the year on a downer, 2012 looks set to begin with considerable international media coverage of Hungary. All last year, when Greece was grabbing headlines any time Italy managed to fall off of them, we kept thinking how fortunate it was Central Europe wasn’t (directly) involved.
It is now. We know how sensitive people can be about jumping on the bad news bandwagon, but you’ll have to send us some feel-good story ideas. Otherwise, we’ll be left with news about the falling forint, and with this sort of commentary from FT Alphaville (quoting Nomura’s Peter Attard Montalto)
The government thinks it has enough cash to last it through any short term difficulties and take it to the other side of the Eurozone crisis. That is not the case… That is the catalyst. We are here because of bank deleveraging caused by Hungary’s own policies alienating the banks, by its anti-growth policies that have alienated FDI investors, by its unsustainable fiscal policy with a budget that hides a huge underlying deficit this year of close to -8%, policies around MNB independence etc, and above all investors scratching their heads and questioning the government’s credibility. That is why we are here.