Ferenc Gyurcsany has not shunned his pleasure

Ferenc Gyurcsany has not shunned his pleasure. The time of the visit, yesterday, in Budapest, George w. Bush, the Hungarian Prime Minister could take her clothes of statesman. Regardless of that American President to appeal to the countries of Central and Eastern Europe, has commemorated the fiftieth anniversary of the anti-Soviet uprising of the city (box read) with four months in advance. Or that the dashing leader of the magyar Government was the leader of the Communist Youth in the 1980s. The two men celebrated coast side the return of the Hungary to democracy and market economy. Welcome to Ferenc Gyurcsany a consecration and respite.

Since the Socialist Prime Minister Hungarian, renewed in power for four years last April, through a bad password. His Government is in butte, for two weeks, in a motion of no confidence of international financial circles. Two major agencies rating, Fitch and Standard & Poor's, brought the rank of sovereign debt of the did Hungary to BBB . The forint reached Wednesday its lowest historical level against the euro (279,33 HUF for 1 euro), after having lost nearly 6 in 10 days.

The austerity plan presented by Ferenc Gyurcsany, on 10 June ("Les Echos" on June 13, 2006), has convinced neither the Europeans nor the IMF. It will allow to reduce the public deficit to 8 of GDP this year. It is certainly better than the 9.5 is good, but the ratio remains very important, and is an undisputed record in the European Union.

To a skid of inflation

"Investors did mostly not like the fact that this package of measures includes more increases in taxes that spending cuts, said Jozsef Peter Martin, the editor in Chief of the economic weekly"figyelo"." In their eyes, the Prime Minister is still not solved to really tackle the structural causes of the financial hole. "Most economists are skeptical that the Hungary be able to return to the nails of the stability pact in 2008, as its head of Government has promised.

The attitude of the Central Bank, but headed by a former political opponent of Ferenc Gyurcsany, the former Conservative Minister of finance Zsigmond Járai, "has also much disappointed the markets", complete György Barcza, Economist for ING Central Europe. Because of the increases announced tax and depreciation of the forint, inflation should go awry in the coming months. But the Institute of issue noted that of a quarter of a point to 6.25, its main interest rate last Monday. A tour of monetary screws found insufficient by investors.

"Neither the Government nor the Central Bank took the provisions which required", considers György Barcza. Hungarian Prime Minister, on the contrary, multiplied the clumsy statements, stating, among other things, that the forint was no problem closer to its pivot to the single currency course (282,4 HUF for 1 euro) or that inflation was not a matter of concern.

The Government of Ferenc Gyurcsany and the Central Bank, in fact, chose not to stifle the economy with too radical measures. The tax increases announced June 10 should already depress growth "2 next year", against 4 about this year and last year, said Olivier Joyeux, CEO of Calyon in Budapest. Number of employees will see their buying power cropped by this increase in taxation and inflation of the cost of credit. Especially if they are debt in euros, as it has become often the case in recent years.

Many investors and analysts consider that a new package of rigour would be necessary. And that the Hungarian Central Bank will give new towers of monetary screws. The Government would think about this new austerity. But it is unlikely that it will be resolve before the very expected local elections in October.