Hungarian politics: Bitter battle ahead


Bajnai has enough of Orbanland

“THE next election campaign will be brutal,” said Ferenc Gyurcsany, a former prime minister, in a recent interview with Der Standard, an Austrian daily. According to Mr Gyurcsany, who leads the Democratic Coalition, a small centre-left party, the campaign is not about taxes, health care or any other public policy. It is about one simple question: “With him or without him?”The man in question is Viktor Orban, Hungary’s prime minister, who has dominated politics more than anybody since Janos Kadar, who led the country for 32 years before the collapse of communism. After eight years of left-wing government, Mr Orban won a landslide victory in 2010 that gave him a two-thirds majority in parliament. He has since reformed the country with missionary zeal, and has written a controversial new constitution that came into force in January 2012. Many of Mr Orban’s changes had a dual purpose: expunging the communist past and consolidating power for his right-wing Fidesz party economically as well as politically.Does the left have a realistic chance of regaining power from Mr Orban, who was…

via The Economist: Europe http://www.economist.com/news/europe/21588433-can-left-win-next-years-elections-bitter-battle-ahead?fsrc=rss|eur

Italy: How not to rescue an airline

ONLY the most gullible or optimistic Italians ever believed that the Phoenix Project launched with great fanfare five years ago would allow Alitalia, Italy’s bankrupt flag-carrier, to soar to profitability. Half-year results approved on September 26th showed a net loss of €294m ($386m), taking total losses since the end of 2008 to well over €1 billion. Its share capital eroded, bleeding cash, with only €128m left, including unused credit lines, Alitalia has run into near-terminal turbulence.Poor strategy has played a part but much of the blame for Alitalia’s misfortunes lies with Silvio Berlusconi, the former prime minister, who exploited the airline’s difficulties in his election campaign in 2008. He blocked its sale to Air France-KLM, a Franco-Dutch airline, a decision that cost Italian taxpayers an estimated €3 billion. Mr Berlusconi’s wheeze was to encourage a group of “patriotic” businessmen, headed by Intesa Sanpaolo, the country’s biggest bank, to take over the assets of the airline, which had been put into administration in August 2008.The patriotic group, including Pirelli, a tyremaker, and Benetton, a fashion group, were joined by Air France-KLM, which took a 25% stake in the venture. Project Phoenix got under way in difficult economic conditions and faced increasingly tough competition from low-cost airlines and high-speed trains on Alitalia’s most profitable…

via The Economist: Europe http://www.economist.com/news/europe/21588109-italian-government-pumping-even-more-cash-its-ailing-carrier-how-not-rescue?fsrc=rss|eur

The Worst Ex-Central Banker in the World

Paul Krugman: The Worst Ex-Central Banker in the World: Steven Pearlstein reads Alan Greenspan’s new book, and discovers that Greenspan believes that he bears no responsibility for all the bad things that happened on his watch — and that the…

via Economist’s View http://economistsview.typepad.com/economistsview/2013/10/the-worst-ex-central-banker-in-the-world.html

How Columbus Caused Inflation

Click to enlarge Source: Economist     According to the Economist: “Some modern economic historians dispute Smith’s argument that the discovery of the Americas, by Christopher Columbus in 1492, accelerated the process of globalisation. Kevin O’Rourke and Jeffrey Williamson argued in a 2002 paper that globalisation only really began in the nineteenth century when a…Read More

via The Big Picture http://www.ritholtz.com/blog/2013/10/how-columbus-caused-inflation/