January 21st, 2012

Hundreds of thousands march in support of government

Editor’s Note: The following article and its headline has been revised to reflect updated reports from MTI.

The March of Peace for Hungary, a pro-government demonstration in which hundreds of thousands of people participated, wound up in Kossuth Square, in front of the parliament building, late Saturday.

Andras Bencsik, the editor-in-chief of the newspaper Magyar Demokrata and one of the demonstration’s organisers, told the crowd from a platform on the square that one million people were participating in the march. He thanked all of the participants and called their gathering together “fantastic”.

Bencsik said that as the first marchers reached the square, the demonstrators at the end of the column were on Andrassy Boulevard, near the Oktogon (about 2.4km away – ed.).

The Ministry of the Interior put the number of demonstrators “close to 400,000″.

Another organiser, the journalist Zsolt Bayer, a founding member of the governing Fidesz party, said several hundred thousand people could have joined the march. He added that the number was difficult to estimate because Kossuth Square was packed, as was Alkotmany Street, the main street leading to the square, and the column of marchers stretched back to Andrassy Boulevard.

Bayer said the event had exceeded all expectations. He said that there were no plans to repeat the march every week, but added that “if there is reason, we will gather together again”.

Another of the march’s organisers, the businessman Gabor Szeles, who owns Echo Tv and the daily Magyar Hirlap, called the demonstration the biggest of the decade, adding that there may not have been such a protest since the 1956 Hungarian Revolution.

Bayer said the demonstrators had sent the message that “this government is not alone”. He said Hungary had waited 40 years for Europe, but added, “We will not be a colony”.

“We will not be a colony” was also the text, in both Hungarian and English, written on a banner carried by the organisers, who became part of the middle of the column of marchers as more and more demonstrators joined.

The demonstrators said they wanted to show they have no other intention but to “live in freedom, with respect for others, in peace, understanding and in the framework of democracy”.

Nobody was slated to give a speech at the event.

Many of the demonstrators held flags with the national colours and placards with the names of their cities and towns, some in regions of Romania and Slovakia with large populations of ethnic kin, MTI’s correspondent at the scene reported.

Bencsik invited the crowd to sing the Szozat, a national anthem, and then return home to allow the rest of the marchers into the square.

The Ministry of the Interior called the march, which started at Heroes’ Square in the afternoon, “peaceful” and “good-tempered”, adding that no police action had been taken.

The historian Gabor Bencsik participated in the march as an organiser. He was joined by Fidelitas chairman Peter Agh as well as former Fidesz-KDNP MP and government commissioner for the capital Imre Pesti.

Visit www.hungarymatters.hu to receive Hungarian news agency MTI’s twice-daily newsletter.
Share
Please note that due to a large volume of trolling and false abuse flags, we are currently only accepting comments from logged-in users.
  • Hrvat Tito

    one million ?

  • Some guy

    “Tens of thousands”? More like hundreds of thousands.

  • Shaok

    There is still no official number but it reaches from 400 000 to 1 million

  • procastinator

    really it did not look like so many there were a lot of empty buses , I guess from the people who were brought in from everywhere else , I wonder who paid for all that , I am sure they did not do it themselves , maybe they got 2000ft to join in :-)

    • Volkorn

      Maybe you are sure, but you are wrong.

      • procastinator

        prove it

        • Javier

          I guess it is you has to prove your accusation, unless we are in a comunist trial

          • procastinator

            every single site I have looked at says about 100k , which is 4x less then 400k and 10x less then one million , and all you have to do is type in “News for hungary pro government march” in google ,
            yes I am sure you can dig up some number somewhere that says 2billion people were there , so go ahead and do it, I proved my point now unless you prove yours , you are full of poop, stupid , lazy or any combination of those :-)

          • Leto

            @procastinator:

            That’s “proving your point”, that is an accusation from thin air… :D ROTFLMAO

    • Leto

      I talked to some people who came by bus. It was them who paid about 2000 HUF so that they could show their support. This was not an MSZP rally, you know…
      When I was looking for my car after the marching (dear me, it was a damn long walk even for me, let alone much older people than me!), I met an elderly couple who drove to Budapest from Eastern Hungary, further away than Debrecen, because they felt it was important.

  • Poland user

    Great move of Hungrian Nation!!! Polish hearts are with You!

  • Csesznegi Gyula

    Tens of thousands? Well, it was probably between 400 and 500 thousand, even Reuters mentioned “over 100 000″.

    We say thanks for their support to our friends in Europe especially in Poland and Lithuania.

  • rj

    What kind of things were being said at this rally?

    • Leto

      There were no speeches held. People carried flags, candles or torches and signs. Some signs I can remember read:
      “Hungary is David, Neoliberalism is Goliath”, “Go, Viktor! We stand behind you”, “Hungary is a democracy”, “Hungarian Prime Ministers are to be elected by Hungarians”, “Thank you, Poland” (in Hungarian and Polish), “Thank you, Lithuania”, (in Hungarian and Lithuanian)

    • spectator

      “There were no speeches held.”

      -You won’t say, that they were afraid to speak freely, to express they unwavering gratitude toward the government, which provide them with “better life than four years ago”?
      What I couldn’t really place was these grave-lanterns, carried by quite number of people – was it for the country, Mr.Orban, or for themselves?

      It was really moving to see, that even the Roma population participated, saving no expenses to travel, even manufactured uniform signs, to show, just how much better life they have now in Hungary, than ever before!

      What I really missed is the ethnic Hungarians from Burgenland, – ungrateful bunch, aren’t they – while the others managed to make it even from far Transylvania, quite spontaneously, as I understood.

      All in all, congratulations!

      • Leto

        Congratulations, you’ve demonstrated yet again what a postcommie a…hole you are.

        • spectator

          Hmm…
          And just what part of my comment you don’t agree this time?

  • Bambino

    Oh poor procastinator!

    Who paid for that?
    It’s so hard to believe that not everyone think like you?
    You probably don’t know the Hungarians at all. We would do much more for our freedom and independece. We don’t have to be paid for that.

    • procastinator

      mhhmm of course you dont ,

  • me

    Which party organized/supports this?

    • Leto

      It was a civil demonstration, organized by individuals well-known about their support for Fidesz, eg. Zsolt Bayer and András Bencsik journalists and Gábor Széles businessman.

  • From Poland

    Seriously guys, you give us hope that a nation can still stand for itself, even with our difficult Central European history of communism, difficult transformation and the leadership of leftist, “European” elites, who are much more willing to pursue their own benefit that the good of the country and the nation. Many people in Poland are proud and inspired – I think you already know that. Thank you and all the best to the brave Hungarians!

    • Leto

      Dziękujemy, Polska! :)

      I saw this sign in the crowd as well.

    • ak

      Poland cant have a debate on the EU because of that rat sikorski.

  • FRANK53

    it’s actually brilliant. once fidesz stole everything and controlled the poor masses, including those magyars in neighboring nations, they could then provide for them. considering the previous record of this government paying students to attend orban’s speech last fall, it is almost guaranteed that many of these protestors, the elderly worried about their pensions, were compensated for this. it is absolutely absurd that nothing is being reported on this in the press. another waste of taxes for a lost cause. oust the bastard!

  • anybody

    After official estimate of hungarian police the nr. of people was 400,000, after those, who organised: about 1 million

    • Leto

      Organizer Bencsik, who said a million, is a complete idiot, of course. I simply don’t understand why he must make fool of himself.
      On the other hand, it was definitely a huge crowd and it was definitely several hundreds of thousands. :)

      I was afraid only a few tens of hundreds of thousands would turn up and then the rally can be easily played down. It was such a pleasant surprise for me that such a huge crowd gathered to support Orbán’s government. :)))

      • Anonymous

        @ Leto…you are such a joke. Whenever you see an opinion what you do not like…you start calling people an idiot.
        Intolerant, primitive and yes you refelct the new spirit in Hungary. That is why it is time to say goodbye to the EU. (forget the EU/IMF loan)

        • Leto

          I’m calling primitive, actually intolerant idiots an idiot. Like those who keep writing that a popular Prime Minister of a democratic country, elected on fair and free elections, is a dictator.
          Thanks for the compliment that I “reflect the new spirit in Hungary”. The huge rally on last Saturday backs up your opinion a bit, I think.

          • Viking

            A certain German ‘politician’ was elected democratic in a free election in 1933 and continued to draw big masses at his rallies for years to come

            Democracy is decided when that type of ‘politician’ can be replaced democratic in the next free election, in the meantime Hungary has to fulfil its international obligations, which has nothing to do with who is in charge

            A question for the future – If anti-Orban rallies become bigger than these pro-Orban rallies, does this change anything, regarding Orban’s democratic legitimacy?
            Meaning is Hungarian democracy defined in the streets of Budapest?

  • Free Hungary

    Aljazzeera reported over 400,000. But who cares ? That’s a lot more people than the leftards had show up and the weather was quite a bit colder. Go Viktor !

    • procastinator

      My god , do any of you know how to read ? or count ?

      -http://www.aljazeera.com/news/europe/2012/01/2012121185023515895.html

      100k , not that it is not allot but if you think about it considering the fact , that fized has a 2/3 majority 100k people is nothing , people were bused in from Transylvania and Serbia so we can say that our of 12.5 million people 0,08 % of ppl showed up , for a party that has such massive support say even 50% of the voting population of Hungary we can say that is 4 million people I round down now to be nice , say out of those 4 million 30& are to old to come , that leaves 2.8 million That leaves 3% of all the hardcore anti EU voters . ( and the numbers are insanely tweaked now in Fidez favor , unrealistically so
      If you want to tell me that this constitutes unfaltering support for the government and a show of force of how the Hungarian people are anti EU , why don’t you talk to me again when at least 5% of the whole Hungarian population bothers to show up to a rally , that would at least win them a seat in parliament :-)

  • Gandi

    500,000 Hungarians march against globalist EU!!
    God Bless Hungary and her patriots!!

    Thank you Lithuania and Poland for your support!!!

    HAJRA MAGAROK!!

    We will not be a colony for Globalists!!!

    • Curious George

      Your message would be clearer if you said to the EU & IMF “Keep your money. We don’t need it”

      • Sophist

        I’m sure that many of those demonstrating don’t understand that Hungary is actually trying to secure a loan, rather than resist colonisation. A tremendous failure on the part IMF/EU and the “International left” to explain and publicise it’s case. This is why elitist institutions fail, they fail to take ordinary people with them. Elites being more interested in talking to each other than their constituencies. Compare this with what is happening in the United States Primaries, candidates falling over themselves to display the common touch

        • Leto

          In fact we did understand that Hungary is actually trying to resist colonisation. It’s become pretty much a half colonial status since 1990.

          • Sophist

            I think Jobbik’s flag burning exercise and their stated aim of leaving the EU is much clearer, and much more honest. I agree Hungary is pretty much a colony other economic powers, but what alternative does it have?

          • Leto

            “I agree Hungary is pretty much a colony other economic powers”

            So you agree, too. Great. That’s really good progress in our discourse…

            “what alternative does it have”

            Becoming less so. At least like Austria or Poland which don’t depend on foreign banks and global big businesses so much.

          • Viking

            Leto says:
            January 22, 2012 at 9:06 pm

            Becoming less so. At least like Austria or Poland which don’t depend on foreign banks and global big businesses so much

            Yes, and the way of doing that is to become *more* dependent “on foreign banks and global big businesses”

            Because, just compare Hungary’s situation in January 2010 and in January 2012

            * Is Hungary more or less dependent “on foreign banks and global big businesses”?

            The answer is of course *more* and Orbán wants it that way!
            Just listen to Orbán:
            * Hungary wants to finance itself from the market!

            What is the ‘market’?
            Unregulated “foreign banks and global big businesses”, instead of the very regulated business of supra-national bodies like the EU and inter-governmental bodies like the IMF, who define a purpose with their loans and try to make the receiver become independent from temporary fluctuations of Orbán’s Darling – ‘The Money Market’

      • spectator

        You should have listened to Mr.Orban in Brussels, because he quite clearly declared exactly this!
        He even stressed (repeated it, in case you wouldn’t believe to your ears) that Hungary even “willing” to pay higher rate of interest to financiers in order to skip loan from IMF.

        We don’t want that grape, because it certainly sour..!
        And:
        It’s not a bug, it’s a feature!
        We willing to pay more!
        As is we have any other option, you see.

        • Leto

          @postcommie liar:

          This is what Mr. Orbán said in Brussels:
          What Hungary needs from IMF is an insurance against that case bonds markets would freeze up later on in the case of an deepening euro zone crisis. Hungary doesn’t need an IMF loan, Hungary needs an IMF financial insurance. Hungary wants to stay on the market and is willing to pay higher rate of interest available in the international finance markets as long as that is possible, that is until this possible financial liquidity crisis would occur.

          Obviously this is very different from what you lied.

          • spectator

            Once again you have no clue, what the hell you talking about. Once again you managed to prove, just how well grounded your accusations are.

            Mr.Orban did express himself – and this case in plain Hungarian – during the press-conference – and at least three times.

            Speaking about lies – at the enclosed link you, or anyone else may listen to the whole event.
            To make things somewhat easier, (only technically!) the related sentences are around 9.15, 10.35 and again at 16.50 minutes.
            And anybody brave enough to listen His Highness speaking English – to my ears with Russian flavor – will find it between 17.32-18.20 minutes.
            Here it comes:

            http://ec.europa.eu/avservices/video/videoplayer.cfm?ref=82316

          • Leto

            Yeah and he’s saying what I wrote about. Hungary wants to stay on the financial markets instead of financing herself with IMF money and she’d want an insurance type deal with IMF in case the international bond markets freeze up.

          • spectator

            Now again: just what have you been answering to?

            It started up with me stating that Mr.Orban said, that Hungary don’t want money from IMF, rather will pay higher interest rate, but no, thank you. (- the “thank you” part my exaggeration)

            You must have some serious hearing-impairment as it seems.
            Some reading-difficulties too, since I never mentioned anything about him not to mention the financial insurance bit – even if he insisted upon calling it “precautionary credit” – sort of.

            I sincerely recommend that you better off if you stop digging deeper, there is no need giving further verification of your superficial intellect.

          • Viking

            Leto says:
            January 22, 2012 at 1:54 pm

            Hungary wants to stay on the market and is willing to pay higher rate of interest available in the international finance markets as long as that is possible, that is until this possible financial liquidity crisis would occur

            Not that makes a logic sentence, but the message is very clear and Orbán has re-iterated that several times:
            * No loand from the regultaed market (IMF/EU)
            * Money from the unregulated ‘Money’ market, even if the cost is higher for Hungary

            A spade is a spade is a spade and Orbán wants Hungarians to pay more money to feed the unregulated ‘Money Market’, instead of getting a loan from a regulated organisation
            That is the simple truth, so why obfuscate?

            Be Proud of Orbán:
            *** Gravedigger of Hungarian Sovereignty! ***

  • Free Hungarian Voice

    Too bad for the Kun Bela types :)

  • MagyarViking

    Clearly a victory for the faction inside Fidesz, which is for more demagoguery and as C.G. points out:
    * The ‘message would be clearer if you said to the EU & IMF “Keep your money. We don’t need it”’

    Now the question is what that faction has done. Has it tied the hands of Orbán in the future discussions with IMF/EU, or not?
    Can Orbán still claim that Hungary will accept anything, everything?

    In the eyes of the average Fidesz-member has not this demo inflated the ego of the journalist Zsolt Bayer, a founding member of the governing Fidesz party, who now can emerge as a serious contender to Orbán, if Orbán really need to take Hungary down the road to hard austerity and (for Fidesz humiliating) conditions for an IMF-loan?

    The main question, for some time, will be:
    * What will this demonstration change?

    Clear is that it does not change anything abroad at the EU/IMF, so what did it change in Hungary?

  • MagyarViking

    This demo also got both the support and participation of the usual anti-EU suspects, as this Index-video shows “Jobbik” MP and Lawyer Budai Gyula taking a stroll in the Saturday afternoon (-http://indavideo.hu/video/Budai_Gyula_nem_kormanytagkent_civilkent_vagyok_itt)

    Budai Gyula’s next task can be to defend 2 “Jobbik” MPs for burning an EU-flag (if those charges ever comes so far)

    • MagyarViking

      oops, my error

      As DoubleH63 says:
      January 22, 2012 at 2:25 pm

      The Jobbik MP and Lawyer whom you tried to badmouth here is Gaudi-Nagy Tamás

      My fault to get the two “lawyers” mixed up
      My post January 22, 2012 at 9:57 am are herewith withdrawn
      At least it is nice to see that at least one person reads my posts…

  • Ironjack

    1. It looked pretty much like Jurassic Park.Same old farts who want communism back and let the decision making for their great leader.the same bald unemployed losers waving flags as dessert.

    2.They were paid to attend.a fact.

    3. Since Fidesz controls the media, we can say it was Hundreds of millions, which in a city as small as Budapest is quite an impact.Indeed there were similar Fidesz support rallies in New York, London, Athens, Cairo, Bogota, Buenos aires, and even our enemies in Tel Aviv.

    All hail our dear leader, lord and savior!!

    • Leto

      What is a fact indeed is that you’re a bloody liar, you postcommie bastard…

      • Ironjack

        You can whine as much as you want.they were paid to attend.if you took a closer look,all of those attending had more or less,the same profile: unneducated,unemployed,old,and desperate who will agree to anything for a lunch and a bus ride,next to some other who have no idea what is really going on behind the news headlines and attended just for the fun of it.as no surprise,only people like you could reply with such a cheap idiotic line.now if you excuse me, I have some investments to handle to a country that is not ruled/full of self destructive retards.

        • Leto

          You can whine as much as you want, you bloody postcommie liar, the facts are that several hundreds of thousands of people attended who actually paid their own money so that they can show their support. You mistook this for an MSZP rally, I’m afraid.

          And that’s also a fact that my friends I attended with are all highly educated and we all have got well paid jobs in private companies. FYI, I myself resigned from my job in the UK at the end of last year, where I worked also in the private sector and where I earned way above the British average, and now I moved to Hungary to take up my new job. Well paid in Hungarian terms but much less in real value, for roughly equivalent work. So shut up, you disgusting postcommie jackass, will you?

          • Ironjack

            To be able to put together a couple of words in english,doesnt make you educated, idiocy is visible in any language.of course,gather a bunch of losers/grandpas/uneducated/desperate with no sense of reality, give them some flags, and bypassers with no idea whats going on will stick to the “rally” ,then throw a state run media to the mix and voillaaaaa: “a million supporters”.if you were that educated you would already have
            Realized that Hungary needs a POSITIVE/CONSTRUCTIVE change of mentality,but that will only happen after your country goes bankrupt …and you will have no choice but to acknowledge that you are all in e same boat,and that you shoul never put it in the hands of some idiot to destroy it,with you included.But yes, maybe this country needs idiots like you to bankrupt it first.

          • Leto

            @Bloody postcommie liar:

            I could “put together a couple of words” in some other foreign languages beside English but that’s not what makes me educated indeed.

            Hungary is having a “POSITIVE/CONSTRUCTIVE change of mentality” now: we’re getting rid of your postcommie ilk. Ceterum censeo MSZP-DK (and their networks) delenda est. :)

          • Ironjack

            yes, very positive and constructive change of mentality I see, better than four years ago.you bitch around,whine and remark how many people attended,and of course, display the kind of mindset of the communist retard who follows his leader like the sheep, that’s right, “let others do the thinking” .an educated,confident and healthy country is much hard to govern.thats why all of you have the same profile.and those attending were the ignorant and uneducated,which for the convenience of fidesz,are the majority,and that is why, the best of your people is leaving and never coming back, the most talented,as usual,looking for a new begining somewhere else,while those who remain here will be the easy manageable turds.whether you like it or not, thanks to people who thinks like you, Hungary is the IMF’s bitch,whether you like it or not.so if you guys go bankrupt,I am afraid my good leto, you will have to go back and clean toilets in the UK. or you can stay here, and get good use of your Latin speaking skills since the country is going back to the middle ages fucking horses.now shut the fuck up, and take your medicine,talk to me in a month when Orban will have to get on his knees if he doesnt want a country in total caos after the IMF says No.

          • Leto

            @Jackass:

            I’m afraid you seem to be really roily. :)
            I suggest you should take a bit of a break from this site and then look into the rules of English punctuation for a start.

          • procastinator

            well in my eyes you have finally earned your right to whatever opinions you want to have about Hungary since you live here with the rest of us :-)

          • Leto

            @procastinator:

            One has to make a living and I cannot rule out I’d have to go abroad again some time but I’m always going to return. Like our ‘second anthem’, Szózat goes: “Bölcsőd ez, s majdan sírod is…” :) (This is your cradle and it’d be your grave, too.)

          • Ironjack

            And of course, once more running to hide, as a good Hungarian coward, instead of replying with logical statements.Ran out of arguments so quickly that now you have to argue about English punctuation? Come on, tell me Hungary is a financial powerhouse after electing Orban…Come on, tell me you guys have a plan B when the IMF kindly asks you to f*** off.What are your brilliant solutions, Mr. Leto PHD???

          • Leto

            @Jackass:

            I think you have too high hopes on IMF as for their imposing their usual neoliberal doctrine on Hungary. Carry on fuming, please. It does entertain me. :)

          • JA aka justasking

            @Ironjack,

            “To be able to put together a couple of words in english,doesnt make you educated..idiocy is visible in any language”

            Was it your intention to use yourself as an example to cement your own point?
            ———–

            “of course,gather a bunch of losers/grandpas/uneducated/desperate with no sense of reality…give them some flags, and bypassers with no idea whats going on will stick to the “rally” ,then throw a state run media to the mix and voillaaaaa”

            Please define ‘educated’ to me?

            Which individual would you rather employ? One who can regurgitate the last 4, 8, 12 years of University? Or, the individual who ‘understands’ the fundamental workings of something and can apply it into reality?

            Why do you think some careers require internships, practicums etc, before a professional designation is granted? Could it be, because theory is one thing and reality another?
            ————-

            “if you were that educated you would already have
            Realized that Hungary needs a POSITIVE/CONSTRUCTIVE change of mentality,but that will only happen after your country goes bankrupt”

            Ahhh, again with the education! Hey…wait…a…minute!!

            Didn’t ‘educated’ individuals, put Hungary into the predicament it’s in today? Didn’t ‘educated’ people create a society of dependent VS independent individuals, because they knew what was best for the people, and by God they were ‘educated’?
            ———

            “and you will have no choice but to acknowledge that you are all in e same boat,and that you shoul never put it in the hands of some idiot to destroy it”

            But…but…what if he’s ‘educated’?

          • Curious George

            @Leto – the IMF “doctrine”, as you call it, are just plain common sense (no education needed). Hungary cannot spend more money than it is taking in, so, it needs to address the areas which are expending money in an unsustainable manner. If there is a better approach, I’d like to see where it has worked.
            Btw, I think the pension expropriation was the biggest economic mistake Hungary has made since 89. It guarantees that Hungarian govt has taken on the entire liability of ensuring that the retired Hungarian population has a decent standard of living (in perpetuity), even before it has built up sufficient resources. Couple that with the fact that the healthcare system is operating poorly, people are living longer, pharma & medical costs are increasing, the transport system is bankrupt, borrowing costs are increasing, and Hungary is facing jobs erosion & competition from other developing countries, a 3rd world Hungary for another generation is not out of the question.

          • MagyarViking

            Leto says:
            January 22, 2012 at 3:31 pm

            I myself resigned from my job in the UK at the end of last year, where I worked also in the private sector and where I earned way above the British average, and now I moved to Hungary to take up my new job. Well paid in Hungarian terms but much less in real value, for roughly equivalent work

            Hopefully your new work in Hungary will not stop you from commenting here and that recurring shifts of the Orbán policies do not cause that Hungarian Private Company to belly up, or after the next elections they are being “robbed off their lucrative Government contracts”

            Who knows maybe the IMF will demand that Orbán should not pay just your company…

          • Leto

            @Curious George

            “– the IMF “doctrine”, as you call it, are just plain common sense (no education needed)”

            Sure, common sense… :D You mean a neoliberal one (if there’s such a thing). You know, IMF has a track record of mistreating economic troubles. The case of Argentina comes to my mind.

            No, IMF has been and is trying to enforce the neolib (or neocon, not much of a difference) status quo of the world: Pax Americana. Substantially taxing big banks and multinational corporations is not part of this status quo. This is actually what all those “worries” about Hungary’s democracy are really about.
            Of course, the aspect of political values also matter. After all, say, defining marriage as marriage must be harmful to the political agenda these forces have about destroying traditional values in society like patriotism, etc. and generally ‘nonliberal’ way of thinking since that’s a real hinderance to consumerism.

          • MagyarViking

            Leto says:
            January 23, 2012 at 4:41 pm

            IMF has a track record of mistreating economic troubles

            IMF is being seriously beaten by the Orban cohorts, making the forint the world’s performing currency…

          • Curious George

            @Leto – It’s quite difficult for me to answer your post unless you specify the specific issue with respect to Argentina, and the IMF’s recommendation which is unsuitable and the reasons.
            When a country approaches the IMF, you know that it has fucked up big time, usually because of excessive debt levels or indirect liquidity issues (both indicative of financial indiscipline).
            In my opinion pax americana has run its course. Since the 70′s, the Europeans, Canadians, Japanese & even Koreans, South Africans have dominated MNC investments in other countries. the 90′s the Brazilians, Chinese & Indians & even the Kiwis have their own MNCs. The IMF has multiple stakeholders, and their policies reflect an amalgamation of diverse interests – just check their board and voting power.
            You are misinformed about banks & MNCs. WTO member countries cannot (I repeat cannot) apply different tax levels to different companies (whether MNC or small business, foreign or local owned, or depending on the sector they operate in). This is the most basic foundation of a level playing field, and ensuring that end consumers are the biggest beneficiaries by paying the lowest prices. The free market recommendations the IMF advocates is one where there are transparent & fewer regulations, greater & more enforcement to ensure compliance, and non interference by the government in the transaction process, all which benefit the local population. National companies would have a natural advantage unless corruption, inefficiency, favoritism, or poor customer standards make them a drain on the country’s resources. Taxing a bank or MNC because the government was lax will only result in penalties and more passed on costs. (I actually favor taxing the banks, and have suggested taxing inefficiencies, as this would have been seen as fairer, and ultimately benefiting the population through lower costs). In Hungary, the main problem was not foreign banks, but lack of transparency & poor enforcement of regulations.
            Consumerism is an issue everywhere, and it has nothing to do with neo-liberalism. Modern society has made sufficient advances in technology to substantially reduce the cost of manufacturing, and to make good quality products available to all. This is an issue which parents need to educate their children. It is a question of balancing needs & wants and making them understand it (my students all want an iphone, but they don’t really need it). You cannot blame the market for making these products cheaply available. It is nothing to do with traditional values, because traditionally, people never had such disposable income.

      • Paul

        What is a fact indeed is that you’re a bloody liar, you postcommie bastard…

        Great democrat you are.What a deep thoughts. Again you could not write a whole sentence without hate and calling names. Peolpe like you make Hungary the black sheep of the EU. Leave the EU.With hate being the best product you can export, if intolerance is your main talent, you do not belong in the civilised world.Buuuuuuuut…. you need the money, don’t you?

  • Leto

    BBC also writes about 100,000 demonstrators. Since people couldn’t fit Kossuth Square, there was definitely a lot more than 100,000 people! A lot more.

    They also write “The backers of the centre-right cabinet also wanted to show that they could mobilise more supporters than the opposition, which earlier this month attracted some 70,000 people for its demonstration.”

    I’d say that’s really revealing about the sympathies of this BBC news editor. Earlier it was generally agreed that the Opera House rally attracted no more than 30,000…

    -http://www.bbc.co.uk/news/world-europe-16669498

    • MagyarViking

      Leto says:
      January 22, 2012 at 11:25 am

      Earlier it was generally agreed that the Opera House rally attracted no more than 30,000

      In press not controlled by or supportive of the Orbán regime the numbers given were between 40-100 thousand

  • Leto

    The atmosphere of the rally was very calm, friendly and peaceful. People were chatting and sometimes singing a bit.
    I saw quite a few couples with small children standing by and cheering for us on Andrássy Avenue.
    I also heard some people talking in various languages: English, Polish, German. Some people were in costumes. Say, a guy was standing by the road, in a group of people waving the national flag, dressed as a “Hungarian cowboy” (herdsman from the Great Plains) and he blew a horn once in a while and then the crow cheered back.
    I saw a guy in the march in his wheel-chair nearby and he did it all.
    It took almost three hours to Kossuth square because the march often was quite slow, due to the large number of people. I was quite a walk even for me, not to mention elderly people…

  • Anonymous

    There were 1 000 000 people!Polish nation supports in a fight Hungarian Nation!!!Polska pozdrawia Węgry !

    • Leto

      There were several hundreds of thousands of people. Please don’t make this successful rally an easy target of being ridiculed. Unfortunately Bencsik, one of the organizers, did that by stating “one million”.
      There’s a video on the net available now which shows the procession passing by at a particular place in Andrássy avenue for a whole hour. Based on that the police estimate of 400,000 is not off.

    • Leto

      Oh, yes! “Dziękujemy, Polska!” Like signs in the crowd also read… :)

  • Paul

    Hungary, in spirit is NOT a european country at all. Please leave the EU. Trade with Belarus, find out your own future without IMF support. Good luck.

  • DoubleH63

    @MagyarViking “This demo also got both the support and participation of the usual anti-EU suspects, as this Index-video shows “Jobbik” MP and Lawyer Budai Gyula taking a stroll in the Saturday afternoon (-http://indavideo.hu/video/Budai_Gyula_nem_kormanytagkent_civilkent_vagyok_itt)”

    Viking, for you any event is good for some Jobbik bashing propaganda, eh.
    Thinking, all these foreign EU/IMF-loving idiots on this site can’t read or understand Hungarian anyways; let alone knowing who belongs to what Party in Parliament. Let’s go for it – no need to worry about the quick giveaway words of “nem kormanytagkent” [“not as member of the Government” for the above mentioned idiots] in the post and also in the video.

    Or shall we just blame your Sunday morning “wake me up” drinks for this comment and forget it. (It’s less embarrassing than being called a lying bastard.)

    PS: The Jobbik MP and Lawyer whom you tried to badmouth here is Gaudi-Nagy Tamás.

    • Paul

      all these foreign EU/IMF-loving idiots on this site

      Okay…go ahead, I am your so called EU/IMF loving idiot.
      Go, leave the EU, we all be happy. Because you do not belong in the EU spirit at all.
      But you need the money though. Do not insult all the civilised countries of the EU and ask for money on the same time.
      JUST LEAVE the EU.

    • MagyarViking

      DoubleH63 says:
      January 22, 2012 at 2:25 pm

      The Jobbik MP and Lawyer whom you tried to badmouth here is Gaudi-Nagy Tamás

      Correct, I attended a bál Saturday evening and was obviously confused that Sunday morning

      My fault to get the two “lawyers” mixed up
      I will amend my original post

  • seinean

    \“Thank you, Poland” (in Hungarian and Polish), “Thank you, Lithuania”, (in Hungarian and Lithuanian)\

    I’m shocked ! No “Thank you Romania” ? No “Thank you Slovakia” ?

    This calls for a “Long live the friendship between peoples !” . Rather old fashioned (’60-ies ’70-ies) but there …

    • Leto

      You know it’s Poland and Lithuania, not Rumania, which showed solidarity with Hungary in relation to these international political attacks this demonstration was protesting against. Our Hungarian kins, Szeklers and Magyars in Erdély, of course, stand with us as one could see from signs like “Kolozsvár” or “Székelyudvarhely”. But that’s not official Rumania.

      • seinean

        Yes Leto. I know.

        Basescu and Boc’s government are rather in the posture of good pupils towards EU and IMF.

        It was just a mild, frienly irony that looks like did not manage to “go through” the net.

        I wonder – if the signs would have been “Cluj-Napoca” and “Odorheiul Secuiesc” would that mean that “official Rumania” was present at the march ?

        • seinean

          * again : friendly

        • Leto

          No, certainly not. As far as I could see, there was no “Warsawa” sign either. With those signs, we only thanked the Polish and Lithuanian officials for their political support for Hungary.

          As for the signs with place names, they are customarily carried in Hungarian demonstrations in order to show where people came from and it serves a practical purpose, too: so that people from the same town or village could keep in touch with each other in the crowd.
          BTW, people came from, say, “Kolozsvár” and not from “Cluj-Napoca”.. because the native language of demonstrators from there is Hungarian, not Rumanian.

          • seinean

            Leto,

            Ok. My (mild) irony definitely did not “pass” the net. My bad.

            Leaving that aside – do you really approve ( as it appears from your comments) all the decisions of Orban’s government ? Even if no IMF loan is requested , aren’t some of them too radical and actually leading to uncharted economic waters ?

          • Leto

            @seinean:

            No, I certainly don’t approve all the decisions of Orban’s government. I wouldn’t do that even if I worked for his government. Errare humanum est… and they are humans. :) Also according to the Hungarian saying, “csak az nem hibázik, aki nem dolgozik” (Only that one won’t make mistakes who doesn’t work.)

            You do sound like a reasonable and intelligent guy so I don’t quite know why you would conclude in this from that I decline to criticise the Orbán government on this site… Do you think that’s the only logical conclusion?

          • Leto

            @seinean:

            There’s a solidarity movement forming in Hungary for Rumania (against IMF) :)

            -http://www.facebook.com/pages/Szolidarit%C3%A1s-Rom%C3%A1ni%C3%A1val-MOST-az-IMF-fel-szemben/237490579660359

            There was even a demo at the embassy today. I’ve just learned about it so I couldn’t turn up. We’re in the same boat as for this.

            -http://www.facebook.com/events/311798768863509/

          • seinean

            Leto,

            What’s happening in Romania right now is not a clear-cut anti IMF movement. Actually it is quite a fuzzy multipolar movement.

            Most of the people demonstrating every day for the last 10-11 days in Bucharest and in several large Romanian cities are indeed against the austerity measures taken by the government under an IMF sponsored economic plan. They simply want their salaries and pensions to be increased by the state.

            However the street violence was provoked by football fans who actually are against a law restraining what they are allowed to do in the strands. They couldn’t care less about IMF, pensions and salaries. They just wand havoc and violence.

            Interesting enough the movement started from a law proposed in the Parliament who was supposed to create alternative , private owned, concurential first-aid (ambulance) systems.

            The law would have passed unnoticed by the large public if not for a conflict between the actual founder and leader of SMURD ( the state owned but rather well managed medical first-aid system ) Dr. Raed Arafat ( a Romanian / Palestinian ) and President Basescu. Basescu was rude and unfair to Dr. Arafat who is quite popular in Romania for his past deeds. This sparkled the protests.

            Now the protests were taken over by the PNL/PSD opposition coalition. They request for early elections even if regular elections are scheduled for 2012.

            So – as you see – the situation is far from being clear-cut…

          • JA aka justasking

            @seinean,

            “but rather well managed medical first-aid system ) Dr. Raed Arafat ( a Romanian / Palestinian ) and President Basescu”

            That rift was actually in the Economist last week. I heard that they are trying to get Dr. Arafat back, to withdraw his resignation…no such luck. Says he’s had enough of politics. Pity.

          • seinean

            JA : “they are trying to get Dr. Arafat back, to withdraw his resignation”

            The law was withdrawned from the Parliament. Dr. Arafat withdrew his resignation as well and he – as a state secretary in the Health Ministery – was put in charge with the drafting of a new law project. To add some spice – the Health Minister, Dr. Laszlo Ritli is representing RMDSZ in the government.

          • Viking

            Leto says:
            January 22, 2012 at 5:31 pm

            With those signs, we only thanked the Polish and Lithuanian officials for their political support for Hungary

            “Polish and Lithuanian officials”?

            Did I miss something?

  • Ironjack

    Well said.Hungary is european at convenience:

    -when want to win an argument about their racial superiority, yes, hungarians are europeans
    - when is about getting visa free travel to other countries to get a well paid job,yes, they are european
    - when is about sticking out your hands to ask money from the EU,of course Hungary is a european country.

    but

    When is about abiding by EU laws, ans setting standards for financial growth instead putting some lunatic and his henchmen on charge,well….Hungary is not even part of the world and claims pride and isolation.

    This mindset is not consistent with that of a country with a future.

  • seinean

    @Leto

    Well – it was not just that you don’t criticise the government’s decisions and that you went to the pro-gov march. On this site you fiercely defended Fidesz and Orban’s government a couple of times for taking what I percieve as rather radical decisions.

    And – not that I want to return your compliments – you too seem to be a reasonable ( historical matters appart )and intelligent person.

    • Leto

      Yes, I fiercely defend what I think is worth defending. Say, our new Constitution and most of the decisions of the Orbán government. :) And I went to the pro-gov march, from my own free will and at my own expenses, because I support this government. The other hundreds of thousands people went there yesterday because of that, too. And we were many more than people on those much touted opposition demonstrations. Democracy rulez.

      • spectator

        “…And I went to the pro-gov march, from my own free will and at my own expenses, because I support this government.”

        What you need is medication, Leto, no doubt about it.

        Get well, poor thing – I’ll be very sad, if we lose you..

      • spectator

        “and at my own expenses”

        - You don’t mean, that all the others didn’t, do you?
        I mean: if you have to stress this aspect, it must have a reason, otherwise you wouldn’t do it, would you?

        PS.: Don’t bother wit the “postcommie fag” part – we all know that already – try something substantial, for a change!

        • Leto

          No, I won’t because I think both parts of “postcommie fag” are just spot on as far as you are concerned.

          • spectator

            It was an informative answer, no surprise, whatsoever here.

            And the above question still open: your turn!

          • Leto

            I haven’t interviewed thousands of people, postcommie. What I know is I went there by my own car and I met an elderly couple in a car park while we were looking for our cars and they drove to Budapest from a distance of 200 kms or so.
            A friend from Győr payed 2000 HUF for the (rented) bus ride.

      • Viking

        Leto says:
        January 22, 2012 at 7:19 pm

        And we were many more than people on those much touted opposition demonstrations. Democracy rulez

        OK, so if the next anti-Orbán demonstration will collect 2 million people (or what ever is needed to be called ‘significantly more’) – “Democracy rulez” still?

        Or will it be ‘mob rule’ then?

  • qweee

    Yes please Hungary leave the EU and keep talking of Trianon. Make an alliance with Belarus and Uzbekistan that are waiting to embrace you and share a common path. Let me tell you, EU without Hungary will be only better. We’ll miss the girls though… but well, the Czechs are still in…

  • David

    @Leto, if it is illegal to blow your car horn in Budapest then it must be illegal to blow your cattle horn (citation needed) so, why did you not citizen arrest that dumbass? Also, I am still laughing at the notion of the three highly edgemacated friends been caught dead out on the streets with you and you are a whooping and a hollering. By the way, this week your Motherland sold all bonds for over 8% yield, this is impossible to pay back without having any growth. And, am I the only person that saw the “Beware of Pickpockets” sign? (ironically, it was bi-lingual). Finally, please back up and address the previous comment from Ironjack, you just let it go. I’m outta here.

  • JJ Levenbread

    A demonstration organized to paper over the cracks and hide the truth which is that, this country, is falling apart at the seams?
    The majority of those folk at the picnic were, in fact, the same pensioners often “bussed in” by the MSZP to support their futile cause.
    Where are the 100,000 jobs promised by Orban Viktor and Fidesz in pre-election speeches? The silence so far to that question speaks volumes.
    Not satisfied with misappropriating private pensions, Orban Viktor and his mixed-up bunch of economists (joke), where trying to get into the Central Bank and steal the foreign reserves.
    It is a deplorable situation that a small nation of ten million people in a country at the heart of Europe can be hoodwinked by successive governments into believing that they are having their best interests looked after when, in fact, the opposite is the case, as the year-on-year debacles will confirm!

  • Sophist

    Curious George,

    “You are misinformed about banks & MNCs. WTO member countries cannot (I repeat cannot) apply different tax levels to different companies (whether MNC or small business, foreign or local owned, or depending on the sector they operate in)”

    Which itself gives an advantage to MNC over purely local firms. They can structure either their local subsidary’s financial, operational or sales structure to minimise its payout in local taxes – options purely local businesses cannot take advantage off.

    Financially, a purely local firm is dependent on third party financing for its operations, and subject to the commerical terms it can secure. The MNC is usually of such scale that it can finance its subsidiary entirely from its on resources, and in a manner in which best suits its tax planning. Most obviously by funding it with debt, rather than owning its equity. If the debt is owned by a sudsidiary in another country, it effectively transfers part of the profits untaxed to that third country – where it is taxed at a much lower rate.

    Operationally, modern manufacturing even of the most innocuous products usually involves various levels of subassembly – each of the these subassemblies can be sold at a transfer price – to other subsidaries in different countries. This again transfers profit between countries. These transfer prices are determined not by market forces but by the multinational companies themselves to minimise the taxes they pay on the whole manufacturing process. Again purely local firms do not have the resources to do this.

    Sales, orders may be taken by a local subsidiary but actually fulfilled by other subsidiaries. I worked on the production side, so I can’t be concrete about this. But I do order stuff from Amazon UK, however about 25% of the stuff I buy is invoiced by an Amazon company registered in the Channel Islands. I would guess that the UK government has lost part of its revenue stream when this happens.

    So I think, irrespective of the your remarks about the WTO etc, that the spirit of Leto’s criticism – that multinational firms are realtively lightly taxed still stands.

    • Leto

      @Sophist:

      Thanks a lot for this great post, I myself couldn’t have written this up so well. I could only add what the grave political consequence of these things are: it’s the multis, and their all sort of “tentacles” (in media, etc), and not elected parties and then governments, which really govern people these days. Then what does that nice word stand really for? You know, the one these free market believers scream at the top of the lungs: “democracy”.
      I believe it’s economy what should serve people, not the other way around. Multis should put back in their place and, say, they should be taxed much more heavily in every country so that local firms wouldn’t be handicapped so much.
      The Channel Island “tax heavens” are a disgrace for the UK.

      • Sophist

        You’re welcome, gave me the opportunity to remind myself that I was once a fairly high powered management accountant, and not just a mediocre English teacher – see I down-sized for Hungary too (or at least one ten millioneth of it).

        But let’s remember to disagree, I’m not optimistic about Hungary being able to reassert it’s independence – its simply too small. It cannot hope to contain international businesses within its own borders, only the EU is big enough to do that. So if it wants to control its economy it has to exclude them, and then we really are in Pol Pot territory.

        • Leto

          You are right about Hungary’s size. However I think there’d be a change of political climate in Europe and Orbán might be a forerunner in this.
          Anyway, you seem to agree (again :D ) to my basic premise that international businesses must be contained by democratically elected politicians and not the other way around and currently this is not evident at all.

          Do you consider yourself “mediocre” in teaching English? :p

          • MagyarViking

            Leto says:
            January 23, 2012 at 11:21 pm

            my basic premise that international businesses must be contained by democratically elected politicians and not the other way around

            This childish “Jobbik”-style of blaming “international businesses” without any concrete evidence is rather boring and childish, but it appeals to that part of the public who always been impressed by simple solutions/answers

            Show where “international businesses” actually really influenced any Hungarian politician in any way which is not regulated in today’s law (which mean I exclude bribes and other criminal activity, which anyway we have not seen a single case gone to verdict yet, so that is just speculation)

            Just one very real example, please’!?!

            Just remember that Orbán Himself embraces “international businesses” then He wants “international businesses” to finance Hungary in the future, not the regulated inter-Sovereign controlled IMF or EU

          • MagyarViking

            Leto says:
            January 23, 2012 at 11:21 pm

            my basic premise that international businesses must be contained by democratically elected politicians and not the other way around and currently this is not evident at all

            The most current example of this in the Carpatian Basin is an Hungarian ‘multi’ (MOL) who recently has been fined for paying bribes in the neighbouring countries

            This example shows that current laws and regulations works, and not really any new ones are needed, just stricter enforcement

            The Hungarian State, with Fidesz at the Helm, is an important part-owner of that “international business”
            Obviously criticism is only applied to ‘bloody unwelcome foreigners’ as usual
            So hypocritical
            So Fidesz
            So ‘leto’

          • Paul

            Eh….I miss something in Leto’s comment. Let me see…oh I get it. He forgot his favourite word idiot.
            Well he will make it up soon.

          • Leto

            @Paul:

            Sorry to let you down but I’m calling only idiots an idiot. You know this particular post was not mean for a pathetic, hysterical postcommie/left-liberal idiot like yourself.

      • Paul

        So great to have you on this site. You are such a fantastic example of the current Hungarian spirit. In the mean time….in the rest of the EU, we still think a government should play by the rules. Tolerance towards minorities, gay marriages is no problem if it makes gay people happy, openly anti semetic behaviour is punished. Central bank is independent from the government influence, FREEDOM OF SPEECH, independent judges and so much more. You can not handle freedom of speech. Your only talent is hatred (unbelievable how you insult people…you think that makes your point of view stronger don’t you?)

        You are a treasure for this government and that is why the rest of the EU is getting tired by your embarassing government.
        By the way…any recent opinion polls published in Hungary lately? Oh …I forgot….no transparancy over there anymore. Well we have seen them, showing a deep decline of VO supporters.

    • MagyarViking

      Sophist says:
      January 23, 2012 at 7:53 pm

      multinational firms are realtively lightly taxed still stands

      Nothing stops any Hungarian company to start a related company abroad and do similar things
      Some do that
      Taxes are just part of the production cost and like other costs they need to be controlled and cut
      Profit need to be created where the tax-part is favourable

      Now there are taxes that are not possible to send around and we do have them in Hungary and they hit ‘multis’ as much as ‘local’ companies. One of these is the local turnover tax, that is related to local turnover, meaning a shop in Miskolcs has to pay up to 2% on their sales, regardless if they are owned by a ‘multi’ or not, regardless if this item was sold with a loss or a profit
      Even if the local office does not sell anything, the company must still tell the tax office how much of their total turnover is created by this office. This can be challenged by the local authorities and the total in the whole country must of course be 100%, so even a PR-company having an office in Miskolcs, never selling a thing, would still have to pay local turnover tax in Miskolcs for that office

      Some local administrations, like Budaörs have chosen not to apply this local turnover tax and hence got the bulk of the HQs of the ‘multies’ in their ‘city’. Any company can write their HQ in Budaörs, it is not a problem, but you need to have an office there though (tax office comes out and checks sometimes), so there are some costs connected to it, but for big companies, regardless ownership, places like Budaörs can be very attractive

      So, should Budaörs be thrown out of Hungary?

      Also, very few companies can avoid paying VAT, which goes to the State, regardless the profit is transported, the VAT is national and stays in Hungary, equal for ‘multis’ and ‘local’ companies

      Left is profit-oriented taxes, but VAT and local sales taxes are more important and give more income to Hungary
      Especially as very few Hungarian-owned, really ‘local’ companies *officially* make any profit…

      Then we of course have the staff-related costs and ‘multies’ do have a much bigger problems paying black salaries, then ‘multies’ need to have everything in their books, to find the employees who steal from them
      Small ‘local’ companies find it easier to pay black salaries, especially where the owners are directly involved in the daily operations, then they have more control

      So, all in all, workplaces created by ‘multies’ pay totally more tax, than workplaces created by ‘locals’, but people working for ‘locals’ can still earn more net, but there will be a black part, which sometimes will not be so small

    • Curious George

      @Sophist – Thanks for the challenging post, and pushing me to my limits on accounting knowledge. I can try to answer part of your question from a different perspective, if we can agree on a common position for two things:
      a. “MNCs are relatively lightly taxed”. Where – in Hungary where there is a budget deficit? There is no global standard for what is deemed to be an appropriate tax rate. So, if there are non-tax haven countries where MNCs are deemed by other local companies and the government to pay their fair share of taxes for their operations, then would you still see this as a problem?
      b. You agree that organizations should not be protected if they cannot no longer compete effectively within their own realm.

      • Sophist

        a) I tackle this one a bit lower down – don’t tell Leto, but I’m all in favour of global standards,and global regulation of global industries. I’m sure that Finland is delighted tha Nokia is based there. But whether Nokia is paying appropriately for social/public costs in the countries it operates in is a different question. One of the most egregious offenders is IKEA – well known Swedish furnture actually owned by a charity in Holland, for obvious reasons.

        b) Should be a matter of democratic decision, if the consumers in the society are prepared to tolerate shoddy/expensive product to protect the producers in a society then why not. This would apply to nearly all European Agriculture, I’m quite happy to pay more for less to a secure food supply in times of war etc..

        • John

          You are quite right. The hospitals are filling up with cancer victims of Nokia and there is a pile of Ikea junk on the curb side that gets bigger every week. The solution however is to produce quality local furniture and build community and wired communications.

          • MagyarViking

            John says:
            January 24, 2012 at 9:47 am

            build community and wired communications

            Yes, that would be the old loud-speaker system in the Good Ol’ Days and a hell of long cables for those who need to move around
            Just think of all people who will end up in hospitals for tripping over those cables
            Yes, technology is always to blame…

  • Leto

    PS to Curious George: IMHO the issue of consumerism is tightly related to multis and to the “free market” ideology, that is neoliberalism, but let’s not sidetrack.

    • Curious George

      @Leto – sorry I disagree here. To me, consumerism is a lifestyle choice. The free-market offers choices, and you can choose whether to engage or not. Ultimately, you only need buy the good you need. Is buying a washing machine engaging in consumerism? A kettle? A TV? If you think buying any material good is consumerism, then there is no point discussing further. Until last year, I drove a 14 year old car, and had a 15 year old CRT TV. It was always my choice whether to upgrade, and I had the money to do it. I chose to spend my money elsewhere.

      • Leto

        No, consumerism, as a social phenomenon, is not a lifestyle choice. To you, personally, it could be but that’s really another issue. BTW, I’m not much different to you in this regard.

        • John

          Consumerism is the deliberate manufacture of items such as kettles designed to malfunction after a short period and need replacing as well as buying useless junk.

          • MagyarViking

            John says:
            January 24, 2012 at 9:52 am

            kettles designed to malfunction after a short period and need replacing as well as buying useless junk

            If we all would use the same suit for 30 years, the same car for 20 years, the same fridge for 50 years, what would we win on that?

            Except looking old-fashioned, buying too much gas/bensin/diesel and paying for too much electricity?

            What has to be calculated in, into this childish ‘ATTAC-like’ level of criticism is that advantages in technology would have been halted, then there would be a very limited market for new products, like leaner machines energy-wise

            Not so surprising though, regarding who normally complaints on “Consumerism” are stuck in old Communist ideals of a Planned Economy and that Regulation and State Interference will solve everything
            Your typical Fidesz supporter in Hungary
            Check the average age demonstrator in Saturday’s march and you will see which age group we are speaking about (‘it was all better before under Kadar’-types)

          • Leto

            This is not consumerism itself. It’s a practice to promote consumerism and it’s called “Planned obsolescence” (see -http://en.wikipedia.org/wiki/Planned_obsolescence )

          • MagyarViking

            Leto says:
            January 24, 2012 at 10:54 am

            it’s called “Planned obsolescence”

            And what is wrong with it?

            If the life-span is too short, people will be a competing product
            This opens up a niche for ‘ever-lasting’ Hungarian products…

            If the life-span is too long, the product will most likely be too expensive and the owners will not make enough profit

            But owners should not make profit, should they?
            That is the kernel of Fidesz-message, only the State should make ‘profit’ for the ‘common good’, is that not the real case?

            So why is not the Hungarian State starting to make products that last for ever?
            Why complain, why not lead?

            Could it be for those handful Hungarian Billionaires who financed Fidesz and now are protected with all this BS about “international business”?

          • Curious George

            @John – When I was young, I had a toy (made in Hong Kong) which said on the box “Guaranteed to last throughout its useful life”. It did – 2 days.
            Every product and sub-component has a life-span. The tighter the tolerances and higher the specs, the higher the cost. My things last long because I use them in the way I think they are designed. My Ikea coffee tables lasts because, I use it for coffee and books. My wife on the other hand, would use it as a step-up to reach something on the shelf. I don’t know if they designed it for that, even if it takes her weight (for now :)).
            Companies make products across different price points so that everyone can get what suits them at an affordable. Someone who wants to tell time doesn’t need a $5000 Rolex, but can make do with a $20 Casio. You buy what you need for the purpose & duration you need it.

          • Curious George

            @Leto – as an ex-engineer, I can assure you that technological advancement makes engineered obsolescence , well, obsolete :) Products become outdated long before they break down.

          • Leto

            @Curious George:

            There’s a HUGE difference between “engineered obsolescence” (that is designing the quality of components so that the product is economical to produce and to sell) and “planned obsolescence” like when, say, you have to throw out a completely workable and good computer printer because they built a chip in which prevents the device from working after printing a preset number of pages. This particular story is well-known…

            Did you know, by any chance, this is the only planet we’ve got?

          • MagyarViking

            Leto says:
            January 24, 2012 at 3:34 pm

            you have to throw out a completely workable and good computer printer because they built a chip in which prevents the device from working after printing a preset number of pages. This particular story is well-known…

            And you went on to buy another printer from that company…

          • George the Curious One

            @Leto – yes, I understand the difference. It’s just I cannot understand a company wanting to do that as it would lose business to its competitor. Care to give us the name of a company which is still in business doing that, and with which particular product? I would like to avoid buying the product :)

          • George the Curious One

            @Leto – Sorry, I made a mistake. I think what you referred to as “engineered obsolescence” is incorrect, but it is not important to the discussion.

          • Leto

            @CG:

            The particular type of “planned obsolescence” I meant is actually termed “programmed obsolescence”. You’ll find easily this computer printer story and that’s not an isolated case.

            Anyway this quote from that Wikipedia page is what sums up my point:
            “Even in a situation where planned obsolescence is appealing to both producer and consumer there can also be significant harm to society in the form of negative externalities. Continuously replacing, rather than repairing, products creates more waste, pollution, uses more natural resources, and results in more consumer spending”

          • Viking

            Leto says:
            January 24, 2012 at 6:47 pm

            “Continuously replacing, rather than repairing, products creates more waste, pollution, uses more natural resources, and results in more consumer spending”

            Yes, when will Fidesz ban coloured clothes (colours harm nature) and traditional Hungarian dress was always black and white

            Then Fidesz will ban import of shoes and employ 250.000 Roma as shoe-repair professionals

            Think that ‘leto’ has the answer on all important questions in Hungary today
            Just impressing!

            Now we just with our breath hold for the implementation…

  • Sophist

    “Nothing stops any Hungarian company to start a related company abroad and do similar things”

    Scale does. The domestic Hungarian market is tiny. No Hungarian firm could enter a pre-existing global industry of any size. The only two I can think of, OTP and MOL are financed by global investors.

    • MagyarViking

      Sophist says:
      January 23, 2012 at 10:13 pm

      Scale does. The domestic Hungarian market is tiny. No Hungarian firm could enter a pre-existing global industry of any size

      Yes, but if we are *against* MNC/’multies’, we must of course be against ‘our’ own companies going ‘multi’, otherwise we are just a bunch of hypocrites

      No, anyone who wants higher taxes for other countries ‘multies’ must understand that the same will apply even to Hungary’s ‘multies’ and make their expansion rather costly, if not totally impossible

      So anyone who are for ‘Hungarian industry’ should embrace the idea of ‘multies’ and work for Hungarian companies spread mainly in the Carpathian Basin, attacking any countries who ‘try to level the playing-field’

      Or you just believe that Hungarian products are inferior?

      It would be nice if Hungarian ‘multies’ would be synonym with Good Products, instead of Bribes, as the situation is now abroad
      And then we speak about Hungarian ‘multies’ who even have the Hungarian State as part-owner…

      • Sophist

        I think Hungarian multis can only arise in new industries, like Finnish Nokia in mobile phones. Any ideas?

        • MagyarViking

          Sophist says:
          January 24, 2012 at 4:17 pm

          I think Hungarian multis can only arise in new industries, like Finnish Nokia in mobile phones. Any ideas?

          Well Swedish Ericsson was miles ahead of those Finns and the Finns only succeeded due to Swedish management…

          But Hungary has had and still have several small companies for developing solar driven cars and other means of transportation, but can we buy them in Hungary with a State rebate?

          Of course not

          Does the Hungarian State support these companies by introducing them in Public Cars programme?

          Of course not

          Solar-powered related industry would be a typical thing Hungary could excel in, but its Political Elite does not want that, so we should obviously forget that

          Together with Hot Thermal Water Block Heating systems, this could also help to lower Hungary’s dependency on import of energy
          But no one is interested, then it does not give a personal fast buck, just the community and Hungarians do not care about the community

          • Sophist

            What does Curious George think about the state subsidizing new technologies?

          • George the Curious One

            I have nothing against the state co-investing in technology, if it gives the country an edge. Otherwise, stick to proven technology, and live within your means. Either way, transparency & prudence (& the decision maker’s head on the block) before disbursing state funds.

          • Viking

            One way of doing this is of course through Campuses and close co-operation with company incubators and the State helping out to find investors

            It would though mean a total different approach on Hungarian Universities, where the Professors stifle all innovation and steal all ideas they can get over into their own companies, so that will not work in Hungary
            Either…

  • Doktor Kotász

    This was probably the biggest rally organised by a civilian group (probably with a little help from the ruling party) since 1956 and turned out to be massive show of support for the government… I guess this caught many on the other side surprised..The Western media, we have seen that in the biased and false reports, well a barrage of unprecedented attacks to be more precise, again tried to downplay the importance of it and came out with ridiculous numbers… I saw „respectable” outlets with rerorts of. tens of thousands or the highest was more than 100,000.

    Even BBC, who is regarded as the standard, the number one for public broadcasting, fell for it. They must have pretty dumb source or they were just blinded by their utmost disgust for the centre right government. They said the anti-government demo on Jan.2 drew 70,000 and Saturdays march drew 100,000. I said WTF!!

    If you ever been walking on Andrásssy street, you know this is a f… joke. The crowd was between Octogon and Opera… That is one stop with the metro. On Saturday the entire lenght of Andrassy boulverad was full of people, this covers some 6-7 metro stops, each one is longer than the Octogon-Opera strech. I Would never have thought that BBC would discredit itself like that..

    The real numbers are somewhere between 20-30,000 for the anti-gov. demo and 350-400,000 for this one.. Pretty embarassing for all those news editor who threw their best at Orbán, calling him Putyin of the Puszta and comparing him to Chavez, now being forced to distort the facts yet again as people unexpectedly (for them) turned up in a massive show of sympathy for the government, which of course has done a number of mistakes, made ad hoc decisions and should have fared better if it had taken the advise of some outsiders..

  • Sophist

    “This can be challenged by the local authorities and the total in the whole country must of course be 100%”

    Yes, but what goes into the 100%? The multinational I used to work for had a global agreement with Burston Marsella. What went into the invoices raised locally was decided by HQ in Switzerland, presumably to the mutual advantage of the parties involved. The local PR manager’s job was merely to sign it, he didn’t have a clue how the amount was decided.

    • MagyarViking

      Sophist says:
      January 23, 2012 at 10:17 pm

      What went into the invoices raised locally was decided by HQ in Switzerland

      I speak about the actual income the Hungarian Company has. If an Hungarian company makes work for a foreign company, Hungarian VAT applies if this foreign company and the actual work is not exempted from such VAT according to the EU VAT-directive

      A typical exemption would be “renting out man-hours” (how I would think a PR-consulting company would do internally), but if the Customer is situated in Switzerland, then Hungarian VAT must be applied

      Also if the end-product of what the PR-company is doing is aimed for the Hungarian market, like an ad for MTV, then Hungarian VAT would apply

      On all these invoices issued to the Hungarian customer and to the Swiss HQ the 2% local revenue tax would apply *in advance* (believe that), payable on March 15 and September 15

      If any company does not make profit for 3 years in a row, the Hungarian tax office can terminate it, then who can run a business without profit for so long period, normally?
      Contributions from abroad, when a ‘multi’ is sponsoring a start-up in a country, does not create profit, just more debt, so the profit must come from operations of the own company

      So, in your case the Hungarian branch of this ‘multi’ needed to show at least a modest profit and it would generate both staff-related taxes, VAT and at least some small company-tax.
      To the Hungarian tax-office, this branch would have to show a calculation of how they would calculate the hourly cost for one employee of different types, what was their mark-up, what price did they invoice, etc. That CFO better need to have good and fast answers on these questions, or there will be a big tax review and for any tax office there is a very fine line between tax planning and tax avoidance/fraud

      If this would not be advantageous to this ‘multi’, then why would they at all come here and create these taxes?
      It is hardly that your case competed out any local business, or?

      • Sophist

        “So, in your case the Hungarian branch of this ‘multi’ needed to show at least a modest profit and it would generate both staff-related taxes, VAT and at least some small company-tax”

        at least, small – this is my point. Without evading tax, a Hungary-only company isn’t able to do this. It has to declare it’s full sales, costs, etc.

        In any case a Hungarian-only PR company can’t offer global PR services to a Global company. So it can’t compete full stop. Though I can imagine that there is plenty of opportunity to sub-contract, which do you think is the much profitable activity?

        In general there is a bigger point here, that EU / EEA VAT co-oridnation has eliminated a lot of the abuses I am familiar with – an example of international regulation achieving what national regulation can’t.

        • MagyarViking

          Sophist says:
          January 24, 2012 at 6:37 am

          at least, small – this is my point. Without evading tax, a Hungary-only company isn’t able to do this. It has to declare it’s full sales, costs, etc

          I do not agree here with the ‘sales-part’, then not declaring sales inside Hungary, generated inside Hungary, in full is illegal
          Same cheating as many ‘local’ companies do with not giving any invoices, which still is a major thing
          In my Hungarian experience still in 2012, I find it problematic that I ask for an VAT-invoice. Often you get back the answer:
          * Oh, that price was without any paper. If you want an invoice it will be 20-30% more

          You may have worked for an international company who cheated and those ones should of course be punished, but I really do not believe that the really big ‘multies’ do cheat in that obvious way. Any simple tax-checking would discover it and that would be devastating for any bigger ‘multi’ reputation-wise, so I think we can forget that
          But it is of course something for all tax offices in the world to look into

          The really big ‘multies’ uses international and national totally approved policies for moving profit from one country to another and that is basis for the development in Europe, especially the last 20 years in Eastern Europe

          Just forget that Hungarian-owned businesses would have built up Hungary to the level it is today
          We would all:
          * use Videoton electronics
          * drive Ikarus mini-buses (then the Trabant disappeared)

          Without ‘multis’ having a possibility to move part of their profits out of Hungary, why should they even bother to come here and ‘liberate’ the Hungarians from Videoton and Ikarus?

          Would Videoton and Ikarus have delivered cheaper or even better products than what the ‘multis’ did?

          It is also a *very* big illusion that Hungarian owners keep their money in Hungary
          I said before I was on a bál in some small city in the week-end. The reason was to meet small Hungarian business-owners trying to start-up new business, which I am a small part of. It is mainly Hungarian products and distribution mainly in Europe

          What has the main owner, who are initiating this business, done?
          Set-up a company in the UK, of course, which will handle *even* the Hungarian distribution
          Why?
          Because who wants to let their money stay in Hungary, that is the simple truth
          Personally I was a bit shocked by that and it made me a bit reluctant to invest, then I was more thinking of either it is a set-up to cheat me or asking for problems with the Hungarian Tax office later
          Now I will join with a minor part, that I can lose in worst case

          So, again, ‘local’ business *do* have the same opportunities as ‘multies’ to use international tax agreements
          One important sales-pitch from the main investor is that you can chose to get your profit abroad…

          Scale is though outside this question, then that applies not only to ‘multies’. Try to open your own private ABC-shop next to CBA…

  • Sophist

    Curious George,

    I agree with all your points about Hungarian businesses and individuals evading taxes and Mulitinationals paying every tax they can’t avoid. I think it is the most important issue in the Hungarian political-economy. But I also think that ‘market forces’ here are forcing Hungarian businesses to go grey or go under.

    I think a grey business is more difficult to manage because of the lack of transparency, and impossible to scale because the increase in operations would make the business a worthwhile target for the tax authorities. Tax evasion is making Hungarian businesses weaker competitors not stronger ones.

    The issue is not that Multis pay more tax than local firms do, but how much tax would be paid is multis acctually played just on the level playing field, and not in the stadium, the dressing rooms and the car-park too. The problem is the ref can only control what’s happening on the pitch.

    • MagyarViking

      Sophist says:
      January 23, 2012 at 10:26 pm

      ‘market forces’ here are forcing Hungarian businesses to go grey or go under

      In my Hungarian business, which rotates around catering in different forms, I do not feel that ‘multis’ make my day hard. What makes my day hard is the grey and black competition

      I do not feel that MC Donaldo is a real competitor, more like a challenge, then they still have better fries than many Hungarian restaurants
      In Sweden I have the 10 last years seen a competing, Swedish-based new chain of Hamburger-joints starting to compete with MC Donaldo, but they do it with a better product and they have created a very loyal customer-base, which they interact with
      That is the way how to do it – better
      In Hungary I just see worse, there is no interest in Industrialism, just ‘fast work, big money’
      Even my children have been destroyed by this ‘Hungarism’ in the sense, they always questions my new ideas – ‘how many weeks before it is profitable?’
      That is the main problem and the reason for the grey and black markets

      So, the ‘multis’ can ‘cheat’ in two ways:
      1) Tampering the import-price for products
      2) Paying a ‘franchise-fee’, normally based on turnover, with or without a fixed part

      Both these things hit the cost-side and hence the profit-based tax, but it does not stop or influence the VAT and local revenue-based taxes any ‘multies’ pay, which normally anyway are the biggest taxes in Hungary

      Personally I do not have a problem with the ‘franchise-fee’, then that represent the trade mark and that is what makes people buy the product

      Also who are the real ‘multies’?
      MC Donaldo?
      No, they are normally National Franchises built up by local business-people, who have experience and resources to run an operation like this. MC Donaldo is a typical example on a local company, like 7-Eleven

      What is left?
      Mercedes, BMW and Opel
      Which Hungarian companies do they compete with?

      OK, Tesco competes with CBA?
      No way, they are in totally different leagues, so left is Lidl, ALDI against CBA
      CBA who have full Government support, who are the only ones who are interviewed on Hungarian State TV, when retail business is reported on
      Forget that Tesco competes out Hungarian small shops just because they are ‘multis’. They do it because Tesco has a better concept for shopping for the modern person and CBA is not an alternative for doing the weekly shopping for a child family with car

      Is this what it is all about?
      CBA?

      CBA, which by the way is the 3rd Hungarian multi-national company. Rich enough to buy a political party and take it to power?
      Maybe IKEA should do that for the next elections – The IKEA Party – ‘Electa!’

      • Sophist

        “Both these things hit the cost-side and hence the profit-based tax, but it does not stop or influence the VAT”

        Depending on the industry you’re operating in, VAT is just easy to manipulate as any other tax. I used to work for the Engineering subsidiary of a large multinational. in the UK. It’s only customers were other subsidiaries of the same multi in different countries. It only sold Engineering services and parts. Because these were Exports, they were zero rated for VAT, so each month the UK government would send us a big check for reclaimed VAT. Every year the UK government would ask if we were a legitimate business or a VAT scam.

        In general, multinational subsidiries are each other’s customers and each other’s suppliers, this enables them to manipulate VAT and profit related taxes. Invidual Macdonald’s outlets may not be able to do it, but head office certainly can, by manipulating the various payments that franchisees have to pay.

        • MagyarViking

          Sophist says:
          January 24, 2012 at 6:00 am

          Depending on the industry you’re operating in, VAT is just easy to manipulate as any other tax

          I do not agree, then there is a strict regiment of what is regarded VAT and how it should be paid inside the EU
          Non-compliance is a crime and can also be controlled very simple by the tax-offices in the EU member states involved

          You cannot write a ‘reversed VAT’-invoice without giving out the other parties EU VAT tax-number. Your book-keeping is by Hungarian law obliged to check that EU Tax Number in the EU-wide VAT register when registering the invoice

          All this is to stop phoney VAT-exempt invoices
          The next level, for *what* can you write these zero-VAT bills for?

          It is all very detailed in EU-regulations, but sometimes the different EU member states do not agree on what is included, so a company can be requested to pay VAT 2 times for the same product
          These cases are refereed by an EU-court

          Let me take one personal example:
          I have my main foreign income via zero VAT
          It is totally OK according to all member states involved, but my Customer in another member state has to pay local VAT for my invoice, then VAT is always added in the end and not in the middle (meaning in your UK-case it was totally OK, that UK-VAT was not paid when selling a product to another business in another EU member state)

          One time some years ago I had a problem with a specific foreign Customer and it was just 3 bills sent to him, but I slapped him with Hungarian VAT (totally wrong by me, but he pissed me off). Tat Customer was an idiot and paid my bills with VAT and all. VAT that was later paid to the Hungarian tax office
          Later we had a VAT checking and these 3 bills came up – Why did they have VAT added, when all my other bills did not? Big problems

          In the end the Hungarian Tax Office bought my story and they agreed that it was wrong of me to put VAT on those 3 bills, but because the Hungarian State actually earned money on my mistake, the Hungarian Tax Office would be so nice they would not fine me for breaking the VAT-regulations…

          What you described was not cheating, then it was not selling products locally and VAT is only applied to local sales

          • Sophist

            I agree the EU VAT harmonisation has limited abuses within the EEA. It’s why I support the EU. But what happens when you are dealing outside the EU, with the US for example?

          • MagyarViking

            Sophist says:
            January 24, 2012 at 4:25 pm

            what happens when you are dealing outside the EU, with the US for example?

            Soon the Hungarian Tax Office will regard this as a taxable advice and request both revenue and sales based taxes…

            Here is a good EU-site on taxation:
            (-http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/vat_on_services/index_en.htm)

            Example 49 and 50 gives you an idea that this can be open to negotiation with that EU member states’ tax court, especially 50

            Importing goods into the EU always means paying VAT in the EU (Article 60 and 61 of the VAT directive)

            Exports:
            “For the purpose of exports between the Community and non-member countries, no VAT is charged on the transaction and the VAT already paid on the inputs of the good for export is deducted – this is an exemption with the right to deduct the input VAT, sometimes called ‘zero-rating’. There is thus no residual VAT contained in the export price”

            Meaning you import from Asia raw-material and pay VAT on that on arrival
            You refine this raw-material and pay VAT on all the parts and supplies needed to this refinement (value-adding)
            You export the final product to the US, without adding any VAT, deducting the VAT paid from the raw-material
            If this would not happen, exports from the EU would be 35-40% more expensive and that would not be so good in the long run

      • Sophist

        “Mercedes, BMW and Opel: Which Hungarian Companies do these compete with”

        Another way of thinking about this question, is what new entrants to the global car market are there, and how were they able to enter the market. I shouln’t think it was through the adoption of free trade.

        • MagyarViking

          Sophist says:
          January 24, 2012 at 6:48 am

          what new entrants to the global car market are there

          In addition to what C.G. writes I would like to point out both the Chinese and Turkish investors frenetic attempts to buy up SAAB
          They are all being blocked by GM, in an attempt to hinder competition

          That part of Sweden has a built up network of several thousand small companies producing for the SAAB and Volvo factories nearby and that is the hard part for these Chinese and Turkish investors. They need to come over not only the actual factory with its machines and workers, but also its supply chain

          And in this time of Just-In-Time (JIT), the supply chains cannot be too long, then they tend to fail or too much must be in transit, defeating the very idea of JIT

          If a competing Hungarian car industry ever would surface it would surface around Szekesfehervar and not in Miskolc, even if the latter would need the workplaces better

          • MagyarViking

            Sophist says:
            January 24, 2012 at 6:48 am

            what new entrants to the global car market are there

            And we should not forget the Indian car market. It is taking off and investors from India have also visited SAAB and expressed interest to buy up the bankrupt SAAB, but GM is trying as much as possible to stop any future production
            Given that GM has the intellectual rights to the SAAB brand and all drawings, etc, they can stall as much as possible

            So the Chines, Turks and Indians investors/industrialists understands that their local products cannot compete on the global market, then they are not enough accepted there
            And probably of not enough good quality, so they need to take over a well-known brand, with its production capabilities

            Cars are global products and you do not get there without enormous amount of investments and a protected home market. But does that mean that Chinese brands will dominate the global car market in a few years later, given that the Chinese market has been heavy regulated to support local brands?

            I am not so sure, it was Better Quality to a cheaper price that made the Japanese and Korean car manufacturers big globally, not their big protected domestic markets
            Somewhat I do not think that Turkish, Chinese and Indian brands will follow the Japanese and Korean brands in that

      • Curious George

        With high costs of development & consolidation within the global car industry, it is unlikely that new players will emerge. It has nothing to do with free trade but economies of scale. Given that a typical car has 6000 parts & subcomponents, the 3 companies are actually buyers of parts from Hungarian companies, and free trade facilitates this.

        • Sophist

          Yes, but realise that free trade and economies of scale are antagonistic.

          No one denies that free trade assists dominant firms to secure the best deals for themselves, the question is whether free trade produces socio-economic advancement in specific countries better than neo-mercantilism. (Cool, am I the first to use this?)

        • Curious George

          Not necessarily antagonistic. Free trade actually allows non-manufacturers to also have a high stake in a particular market segment.
          If you again take the example of Hong Kong & Singapore, both countries exports are 2-3 times their GDP, which essentially means, they are exporting more than they produce. How is this possible? Basically, they import goods, value add to it, and then sell it at higher prices. Do this for multiple manufacturers and you’ll see that those with economies of scale do not necessary have the edge, because they too need the value addition (marketing, distribution, logistics control, sourcing, customer service etc) provided by the non-manufacturers who would otherwise assist their competitors. One would be hard pressed to think of any Hong Kong or Singapore product which is dominant.
          Does free trade pay off better than neo-mercantalism? Well, the BCG wealth report I referred to kind of gives the impression that it might. In any case, I think it is fairer, as it also allows non-participant to benefit by becoming participants.

          • Viking

            Curious George says:
            January 24, 2012 at 12:27 pm

            they import goods, value add to it, and then sell it at higher prices

            Is not Germany, with its Mittelstand, doing the same thing?
            What natural resources does Germany have?

            I would guess less than Hungary, which have the hot thermal water to use

          • Sophist

            Yes, antagonistic:

            “Free trade actually allows non-manufacturers to also have a high stake in a particular market segment”

            Like the Supermarket chains in the UK? Monopsomy is just as anti-free market as Monopoly.

            Economies of scale reduce the number of participants, if the number of participants in a market is reduced it becomes more inefficient. Again, the only way to counter Economies of scale is increase the size of the market.

            “It is fairer” is a moral argument rather than an economic one, do you think economic theories should evaluated in moral terms, or just the efficient allocation of resources?

          • George the Curious One

            @Sophist – I only just saw your post. I agree that economies of scale reduces the participants. However, any inefficiencies in the transformed market on part of the dominant player(s) immediately creates a new market opportunity. In a free market, it is possible for efficient players to then focus on that segment to reduce that dominance.
            With new technologies, customer needs can be satisfied in multiple ways, or sometimes, even changed. The recent bankruptcy of Kodak, which controlled 90% of the American film market, is the perfect example of a dominant player losing everything, even though it was one of the pioneers of digital photography as early as the 1970s.
            I’m prefer to look at market efficiency from the point of view of the customer. My perception of fairness is when there is no producer surplus. I believe this happens when markets are free and customer have access to alternatives, if not domestically, then internationally.

  • Sophist

    Oops, sorry MagyarViking and Curious George, the above should have been addressed to MV not CG.

  • Doktor Kotász

    Now 20 years after the change of regime, with 3 million Hungarians living in poverty and another 3 million trying to make months end meet, with half of Hungarians in debt and no savings, with all the major sectors of industries, bank, energy, utility (privatised by MSZP SZDSZ between 1990-2002) in the hands of multinationals and a bunch of former Communistss, ,with 3rd world health statitiscs, with the lowest rate of birht and highest rate of abortions, this is the first government that came to power with the agenda of pulling the country out of the debt trap, revive the economy and defend Hungary’s interests.. Everybody has to chip in and share the burdens… Banks that made HUF 3 trillion in profit int he last ten years, now expect to lose some HUF 0.5 trillion in two years.. So what is all whining for? Tesco had more profit in Hungary, with 10m, than Poland, a country of more than 40 million…. After all the years of tax free status, they now have to pay less than 20% of their profits. Smartly, the government levied the sectoral tax on revenue, so the big companies could not get around it with transfer pricing and other methods to siphon off profits.

    The ruling financial elite understandbly liked former communists in all Eastern and Central Eruopean countries, becasue they could strike pretty good deals with them.. Who would not want to do business with serviant people on other side of the negotiationg team putting up assets for sale at bargain price instead of quarelling with some „arrogant nationalist”, who would tax you and make your business less profitable.

  • Rocinante

    The first thing to consider is that we in Hungary pay 27% AFA/VAT and that is the highest in Europe?
    Many of the taxes are not collected and the shortfall triggers the hapless government to introduce further punitive hindrances to the extent that everything becomes a gray area in which tax evasion and avoidance becomes a national pastime.
    Curious, identifies problems and cites instances in other countries where there are much better models for a host of things but never tells us how the black dogs, here, should reform the system to our mutual advantage.
    I have had my fingers burned on many occasions because of my naivety on how things are done in merry, Magyarorszag.
    The number of scandals recorded on this site and realdeal will bear out just how deeply embedded corruption is and, nothing much has changed in that respect from the commie days except that these scandals are made public.
    The family silver has gone in the form of private pensions being stolen and then lost via misplaced gambles on the money markets.
    This is followed by an attempted back door entrance to the Central bank to steal the foreign currency reserves. Orban Viktor is fighting with everybody whilst handing out the begging bowl for a further 25 billion euros to stave off bankruptcy.
    Foreign investment has dried up and there is no evidence that any of the promised reforms have been introduced to solve the ever-mounting problems that increase by the day as the people flounder under the weltering burdens of broken promises, and no jobs, and very little money.
    The situation is intolerable and all the subterfuge and deflection and propaganda of the current government can only make matters worse. The whole shooting match is a farce which is played out to the tune of, “nobody understands us”, pathetic flag waving, marching in the capital, and the condemnation of foreigners and the left wing press as being responsible for all the evils when, as we all should now have gathered is the sole domain of a clueless moron and his party: Orban Viktor and Fidesz!

    • .

      “The situation is intolerable”

      So why do you tolerate an intolerable situation? The borders are open. Leave.

  • Curious George

    @Sophist – Apologies for the length and perhaps convoluted reply (& maybe boring for those uninterested). I’m not an economist, but I will try answering some of your questions from the POV of efficiency/competitiveness & national development.
    Firstly, I do not deny that MNCs have advantages. I agree that MNCs have advantages over local firms – economies of scale, resources, experience in other markets, technological access, and ability to face wider & more developed competition. However, they also have disadvantages with higher fixed costs and operational costs. However, local firms also do have advantages which are often taken ignored – local market knowledge, relationship with existing customers, possible preference for local products, ability to have deeper distribution networks, to name a few. So, both the MNCs & the local companies have challenges to overcome when entering a market entry. Now, given the speed of change in our world, it is inevitable that all companies, regardless of size, industry or country, will face increased competition. It is imperative that recognize this, and find ways to continually upgrade and maximise their value to their customer. So, if a local SME is not efficient enough to compete head-on it probably has to find a market niche which the MNCs is not interested in. For eg A 4- generation owned cafe in Vienna I know, had the unfortunate situation of being located within 200m of a new Starbucks, and they started losing customers to a company which sold the same coffee in plastic cups for twice as much. They did solve the issue (correctly, in my mind) by changing their approach to their customer, and incorporating things which appealed to them (eg wireless, take away coffee, more interactive & personal service, jazzing up the place slightly without loss of ambiance etc). This worked slightly, and they are now trying all kinds of things to increase their efficiency (something that they never thought about before – equipment, sourcing of beans, inventory control etc). Unfortunately, it is always a question of looking the need for business re-engineering, if you want to stay in business. In manufacturing, the German/Swiss Mittelstand & many Nordic companies are probaby the best example I know of ensuring focus & a high value addition for long periods. Now, I know it doesn’t answer the taxation issue, but it partly address the ability for SMEs to stay in the game.

    To me the taxation issue is closely tied to govt efficiency. To have a level playing field, the government must also be doing its part. The two countries which I know which do have a level playing field are Hong Kong & Singapore where both the govt & population feel that MNCs do pay their fair share, and MNCs don’t face resentment by the local companies. In both, the perceived advantages which apply to MNCs are also accorded to local firms, hence they are not considered “lightly taxed” but fairly taxed. In both countries, the government has created very efficient & transparent systems, such that overall cost of operations for companies is low. Both countries have a low tax base which applies to all companies within the country, and AFAIK both govts continue to have budget surpluses, even during this global recession. The efficiencies within the system ensure that local companies are diligent enough to find a niche where they can maximize their value addition & operate successfully, even re-engineering the operations or getting out of the original business if necessary. Many companies in both countries decided to leave their original spheres and actually became successful suppliers to the MNCs, and have vastly increased their business because of the larger customer base of the MNCs. I read a recent BCG wealth report that said that Singapore have the highest percentage of millionaire households in the world (15.5%), Switzerland was 2nd (9.9%) & Hong Kong was 4th (8.7%). This is obviously a multiplier effect from having an efficient economy. There is no reason why other countries govts cannot create the same type environment it needs to ensure that their all companies can operate fairly & efficiently without causing any unhappiness among local companies or the population. It is a question of priorities.
    I have no real answer to your preference of having global regulation with respect to global industries. It may be easier for manufactured products than for services. But, if you’re talking about a global tax, then I think that’s never going to be on the cards in our lifetime because social costs in different parts of the world are so different (Imagine Africa & Europe where a European cow gets $900/year from the EU, and an African family lives on less – why/how would tax rates ever be the same). There will be no equalization here for a long time. A global tax regulation implies some sort of common understanding between efficient & inefficient govts. You favor protection to some extent. Why would an inefficient organization (here I’m referring to a govt), be protected? If a govt (& by default, the country;s environment) is inefficient, which efficient country is going to agree to carry that cost of protection?
    Lastly, I have anecdotal evidence from 2 countries (Malaysia & India) which try to limit transfer pricing, but do so by insulating their economies partly. In both, MNCs have to declare their costs, so that it cannot avoid taxation issues. The govt also has the option of buying those goods, so companies do not try to under-declare. Also restrictions on financing, & also leasing (Parent MNCs can lease used eqpt & charge the subsidiary high rates to reduce operating profits). I’ll stop here.

    • John

      “I read a recent BCG wealth report that said that Singapore have the highest percentage of millionaire households in the world (15.5%), Switzerland was 2nd (9.9%) & Hong Kong was 4th (8.7%). ”

      None of these countries have the same proportion of the population with weekend homes as does Hungary nor the availability of quality and fresh food products as sourced from such weekend homes. Economics should not be confused with finance. Hungarys problems are to do with poor land use and those weekend homes point out the solution.
      http://www.justfortheloveofit.org/blog-5811~the-gift-economy
      http://www.ringingcedarsofrussia.org/cedar-nut-oil/population-health-care.html#world1

    • George the Curious One

      @John – Maybe those Hungarian households should think about selling that good quality, fresh produce to the people in Singapore, Switzerland & Hong Kong, and transfer some of their wealth to Hungary.
      But then again, why share the good stuff with them? Better Hungary keeps it & let those kulfoldi envy you, and suffer eating those French, American, Canadian, Brazilian, Australian & New Zealand imports.

      • MagyarViking

        George the Curious One says:
        January 24, 2012 at 1:10 pm

        Maybe those Hungarian households should think about selling that good quality, fresh produce to the people in Singapore, Switzerland & Hong Kong, and transfer some of their wealth to Hungary

        As I wrote in another post, I am a bit involved selling Hungarian produce like that abroad, but the whole scheme is to keep the profits outside Hungary
        This is a fully owned, started and produced Hungarian company
        Not even the locals wants to keep the money in this country, so better eat what is left, before some one sells it…

        Actually in the week-end I was speaking with one Hungarian guy who can sell new Hungarian potatoes to another EU member state and he has been asking the Hungarian Agricultural Ministry for getting an export-quota, so he knows how much he can offer, but the Ministry just rejects it. Hungarian potatoes are not to be exported freely, it belongs to the ‘protected’ species, aimed for the Hungarian market mainly
        In the summer the Ministry will come out with an opinion, when it is too late anyway to organise some good sales

        This is Hungary today, efficient and no bribes involved…

  • Curious George

    MNCs (or any company) will always want to minimise their taxes. I have just checked, the corporate tax rate in Hong Kong is 15%, Singapore 17%, and Hungary 10% & 19%, so the 3 countries tax rates are not all that different. Yet more companies base their global operations in the 1st two. Ultimately, they have to pay their taxes somewhere, or face ethical questions on social & corporate responsibility. As a non-accountant, I can’t argue on the best way to control transfer pricing (is this a big issue with service companies where there is no physical product?) Given that there is no accepted uniform way of controlling this, I believe in countries competing to get the most of out MNC operations. Both countries fund their budget & development from the revenue, spillover & multiplier effects of MNC operations (a form of country competition, if you will, to attract MNCs to employ people, utilize local services, and conduct higher valued global operations from the countries).

    • Sophist

      “As a non-accountant, I can’t argue on the best way to control transfer pricing (is this a big issue with service companies where there is no physical product?) Given that there is no accepted uniform way of controlling this”

      When I was working in Russia, my business was based in the UK and my contract was with a company in Switzerland, Yes the problem with service companies is impossible to police.

      A physical product makes it easier to track where costs and benefits have occurred. But not necessarily what the cash value of those costs and benefits are. Semi-finished goods and sub-assemblies only really have value to the business which uses them. Their market value is scrap, so above that the business is free to put its value on the transaction.

      In order to query it, the auditor/tax inspector has to be an industry specialist, in 8 years and three countries I never met anyone in that capacity who had a clue about our cost structures or how we calculate them.

      Between cash transactions which cannot be manipulated, management accountants are pretty free to tell what ever story their employers want them to. This becomes particularly powerful when accounting for investment and fixed assets. Again operating assets are often very specific to industries and even firms, and have only scrap values to outsiders. But here the useful life of can stretch over tens of years, the values are high relative to operting profits so they can have massive effects of the declared and taxable profitabiliy of operations.

      My experience tells me that the only way to get a handle on this is multinational tax authorities and industry specific collectors. More faceless foreign bureaucrats telling people what to do!

      • Viking

        Sophist says:
        January 24, 2012 at 4:55 pm

        Semi-finished goods and sub-assemblies only really have value to the business which uses them. Their market value is scrap, so above that the business is free to put its value on the transaction

        My experience tells me that the only way to get a handle on this is multinational tax authorities and industry specific collectors. More faceless foreign bureaucrats telling people what to do!

        True and it is a very good question what the value should be, even if the whole process from mountain to ready made product was inside the EU
        I can imagine several year-long legal tax-court battles

        “More faceless foreign bureaucrats telling people what to do!”
        The future is wonderful, is it not?
        Especially for us “faceless foreign” would-be industrialists…

      • Szabad Ember

        That was very illuminating, thank you! Also, the thread below about economics; you guys both have good points, and are conducting an interesting, informed, relevant discussion without name-calling and insults. Even Leto is acting like a human being! I might start reading comments again…

        • Leto

          I behave humanely to humans. Everybody gets what they deserve from me, including you.

          • Szabad Ember

            Ah, so this comment is also illuminating! You are typical for a Fidesz supporter; everyone who disagrees with you is subhuman, which means that their opinions don’t count. When they are proven by time and circumstance to be right, you cannot bring yourself to admit it. You blame conspiracies and outsiders for anything that proves you wrong.

            To you, democracy means that you get your way. When Fidesz loses another election, you will refuse to admit that it is democracy, and will blame everyone except yourself and Fidesz.

            To you, freedom means that you get to do what you want, and also get to tell others what they get to do. Why do you hate homosexuals so much (let’s pretend the real reason isn’t your latent homosexuality)? Why does the constitution have to infringe their freedoms and rights? Is Hungarian society not strong enough to continue to exist even if they marry each other? How does that hurt you? Even if you consider them to be subhuman, why are you so afraid of them? What a pathetic man, to be so scared of a bunch of poofs!

            Finally, you seem to say that you don’t behave humanely towards non-humans. That sounds to me like you sexually torture kittens, you sick pervert!

            You are such a narrow-minded hypocrite. Are you going to tell me to “piss off” again? Or are you still too bored to come up with even your normal, pedantic insults?

          • Leto

            @SzE:

            “everyone who disagrees with you is subhuman, which means that their opinions don’t count”

            Well, like you could see yourself as well, not everyone who disagrees with me is subhuman.

  • Curious George

    @Sophist – to conclude, by drawing attention to your stance on the CAP. If the population in a country is free to protect domestic industries & put up with inferior or shoddy products through barriers & high taxes, then the population of another country should also be free to have low taxes and extract their ‘income’ from MNCs participation though other means.
    MNCs & companies can choose which ever market suits their business needs. No one is forced to tolerate how MNCs operate in their own country, nor dictate how MNCs should operate in other countries.
    The great leveler as I always advocate is openness & a move towards competitiveness/efficiency. That, I think, will eventually force taxation and other issues to be more uniform.

    • Leto

      Your whole argumentation is easily shot down by the tragedy of the commons.

      -http://en.wikipedia.org/wiki/Tragedy_of_the_commons

    • Curious George

      Ah, but then we disagree on the scope & importance of ‘common’ resource. I believe the labor output resource (efficiency, productivity) & the creativity of the people are not shared, and make the difference. The experience of Hong Kong & Singapore reflects this in their ability to identify gaps and create businesses to fill them to stay ahead of the game, even when they lack the physical resources. Hell, the damn Singaporeans don’t even have enough water, and have to drink their own recycled piss.
      Anyway, I could be wrong in my thoughts, but I’d believe you more if you showed exactly where I went wrong.

      • Leto

        What do you mean the “resources are not shared”? You just price them differently. One cow is more valuable than the other one. This alters only the specific values in the pay-out matrix but not the characteristics of the matrix (saddle points, etc), that is the game itself.

        • Leto

          Ok, that’s only my assumption that pricing (modelling labour productivity, creativity, etc) is only some “pertubation” in the payout matrix.

      • Curious George

        @Leto – what I meant was that every country’s resources are their own (not shared), and they do not make use of them in the same ways.

        • Leto

          @CG:

          That really doesn’t make sense. MNCs are called like that because they operate across countries and this game theory model is to be interpreted from their point of views. The parcel of land is the word/world economy. I suggest you should (re-)read this Wikipedia page and give this toy model another thought.

        • George the Curious One

          @Leto – I’m still not sure what you are getting at. We may still be talking about two different issues from two different points of view. I’m talking about not being limited by physical issues & resources in limiting the influence & dominance of MNCs. This seems possible in non-manufacturing arenas.
          Eg, if you looked at Starbucks (consumer retail), Marriot (hospitality), Hutchinson Whampoa (HK port management) & Veritas (certification), you’ll find that all 4 are MNCs operating throughout the world, but do not & likely cannot have market dominance because their activities are not limited by control or usage of physical resources. In my country, Starbucks, despite its global image, dominance & resources, lost a big market market share to a locally owned coffee chain who knew what sort of ambiance, products, services & image appealed to us. Similarly, for the other 3, the defining success factors have little to do with physical resources, but organizational abilities.

          • Leto

            @CG:

            It seems you completely missed what I was talking about.

            Game theory “is “the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.” An alternative term suggested “as a more descriptive name for the discipline” is interactive decision theory”

            Please read this page, especially section “Economics and business”, and then perhaps you’d have an idea what I meant.

            -http://en.wikipedia.org/wiki/Game_theory

          • George the Curious One

            @Leto – Sorry dude – you replied to MY post, and I clarified what I was referring to, by giving real-life examples to help you understand what I wrote. Your oblique references to theory of the commons & game theory leaves me wondering how exactly “my whole argumentation is shot down”. Maybe you can use the example, of say Veritas or Marriot, to explain to me (and probably other non-economists and mathematicians), understand how exactly it applies.

          • Leto

            “The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone’s long-term interest for this to happen.”

            Countries try to maximize their tax revenues from MNCs. MNCs can always play their tricks, as explained by Sophist, and this process induces one where countries create “tax heavens”, etc. in order to entice MNCs at the expense of other countries. The result is countries, on average, get weaker and weaker (“depletion of the land”) and MNCs get stronger and stronger relatively.
            Countries act independently and rationally consulting their own self-interest but the world, as a whole, gets screwed.

            One would think there are two ways to break out from this situation: 1/ a just and fair, all-knowing world government 2/ neomercantilism -http://en.wikipedia.org/wiki/Neomercantilism

            But what “a world government” would be in a world where MNCs already too powerful and they dictate national policies? A body of superhumans elected by mankind in fair and free elections? :D

            So there’s only one option left: restricting free trade and flow of capital. Reversing globalization to a humane level,

          • George the Curious One

            @Leto – ok, thanks for the clarification. It becomes clearer when you talk only about finite physical resources.
            \…….a just and fair, all-knowing world government….. one option left: restricting free trade and flow of capital.\
            Sorry, but both ain’t gonna happen. The first for obvious reasons, and the 2nd only benefits the haves, so the have-nots aren’t gonna agree anytime soon. So, the only way is for the haves, to give the have-nots, so that everyone is going to be on the same page with regards to showing concern for depleting resources. But that ain’t going to happen either. So, I’ll just have to stay in the real world, where people are going to continue competing with each other for physical resources, and make the best out of it for now :) But……..if we looked at non-physical resources and the MNCs in the service industries, then we have whole different situation, and it become more intesting.
            Now, lets say we took all the MNC hotel chains together (not just the Marriot in Hungary)? How would they exert their control over any country, bearing in mind that they cannot control a single resource, and one (a resident) can choose to totally ignore their services, while travelers can stay in smaller boutique hotels, hostels, apartments, friends etc. They have no monopoly because the demand for their services is finite, and there are substitute products. You’ll be hard pressed to name (I think) a single service industry where all the MNCs put together would be able to control a single country when you have an open market. Eg for hotels, what would be the shared limited resource here which would puts the country (any country) at their mercy? I don’t fear MNCs because they aren’t the only ones acting in the way you described. If they weren’t around, the smaller local ones would do the same anyway with the finite resources, and the situation wouldn’t be any different.

    • Sophist

      There’s no motive for openess or competition, in fact the motive of profit maximisation means firms struggle to escape competition and the hide the sources of their economic power. Only counterveiling power can enforce competition or openness.

    • George the Curious One

      Which is why I advocate free market competition, limited only by anti-monopoly & customer protection legislation. As I said earlier, the customers’ interests come first, and I have no issues for the state to ensure that.

      • Sophist

        I think you mean you put low prices first. If consumers can be disadvantaged by monopoly. Producers can be disadvantaged by Monopsony – why should producers receive no protection from market failure?

      • Curious George

        Not necessarily low prices. If producers can provide such high value to the customers that customers willingly pay more for goods (eg iphone or other veblen goods) then I have no issues.
        From my experience, the traditional monopsomy doesn’t happen frequently. When it does, technology makes it less viable in a free market. An example of that are the african fishermen who, using mobile phones, are able to understand market prices and group together to bypass the middlemen, and sell directly to the customer at lower prices.
        It doesn’t answer your producer protection question. I believe producers have to make decisions on what they want to produce based on the entire value chain. If part of the value chain is inefficient, they should have the flexibility to use technology, re-engineer their operations or business model, or simply produce substitute products.

        • Sophist

          “From my experience, the traditional monopsomy doesn’t happen frequently. When it does, technology makes it less viable in a free market. An example of that are the african fishermen who, using mobile phones, are able to understand market prices and group together to bypass the middlemen, and sell directly to the customer at lower prices”

          From my experience, I shop at Tesco (which has market share of over 40% in Hungary) and I’ve never been telephoned by an African fisherman offering to cut out the middleman – or anybody else. Hungarian traders offering to cut out the VAT, however, is an regular occurance.

          “If part of the value chain is inefficient, they should have the flexibility to use technology, re-engineer their operations or business model, or simply produce substitute products.”

          Well with this advice I can understand why so many small producers give up their businesses, if not the will to live.

          • MagyarViking

            This one was extremely funny
            Still laughing

          • Curious George

            I’ve never been telephoned by an African fisherman offering to cut out the middleman
            Now you’re being silly – you live in the EU where you have the CAP to protect you from African fishermen & farmers telephoning you with their offers.
            I can understand why so many small producers give up their businesses, if not the will to live.
            Life sucks doesn’t it, when you can’t compete. Thanks for the tip, I think I’m seeing a market opportunity in coffins. Now, what’s the cell number of that Chinese carpenter…….?

          • Sophist

            “Life sucks doesn’t it, when you can’t compete”

            The argument is about the reasons why they can’t compete; not because they aren’ efficient producers in a European context, but because his customers, multinational retailers have access to alternate suppliers – you remember, the African fisherman, who doesn’t have the same cost structure – environmental regulations, minimum wage requirements, health and safety requirements – imposed on them by domestic and European legislation.

          • Curious George

            Remind me again, when was the last time the EU was so accommodating of allowing Tesco to source African or any foreign farm produce at the expense of “efficient” EU producers. My country’s negotiating team must have been asleep to miss an offer like that. Time they got a clip on the ear :)

          • Sophist

            “My country’s negotiating team must have been asleep to miss an offer like that.

            What happened to the African fisherman with a mobile phone? You not confessing, are you, that ‘your country’ is not a bastion of free trade, but are active neo-mercantalists? And who do you, with all your guff about free trade, work for, George???

            To avoid you accusing me of not answering the question, I suggest the negotiating team switch to flower rather than fish production, where there are still openings – flowers not being essential in time of war, or unable to grow in the harsh European climate, I’m not sure which. Follow the Kenyan example and you too could have have 32% of the EU flower market!!

            http://allafrica.com/stories/200705010301.html

            A figure which is remarkably close to the percentage of Kenyans that are malnourished.

            http://www.fao.org/countries/55528/en/ken/

          • Curious George

            What happened to the African fisherman with a mobile phone? You not confessing, are you, that ‘your country’ is not a bastion of free trade, but are active neo-mercantalists? And who do you, with all your guff about free trade, work for, George???
            Well, unlike you, we DID get the fishermen’s call, and do buy from them. The point I was making was to show that, with a little initiative and the use of technology, the African fishermen were able to overcome the local buyer’s monopsomy. Well, I can’t admit to something which isn’t the case. As a WTO member, we abide by all their rules on free trade. I’m not sure who I’m working for in informing people that the real world we live in, is not bounded by the static assumptions of an economics textbook. However, I do believe you’re taking advantage of all that free trade guff, seeing how you do your shopping at Tesco & Amazon at the expense of the “small guy” who has lost the will to live. Perhaps, like that cafe in Vienna & the fishermen, I’m just working to show those little guys that there are alternatives if they stop thinking that the world is going to stay the same just for them. My 83 year old uncle, who has no pension, still goes to work everyday selling insurance policies to his dwindling client base. So, I too foresee myself having 2-3 careers (not jobs) before my time is up, simply because I dont envision the state or anyone else being able to support us as our lifetimes get ever longer.
            Not sure of your point about flowers. You want us to produce or eat more flowers and be malnurished like the Kenyans? Or are you saying that the Kenyans shouldn’t be producing so much flowers and start eating the fish instead???? But, let’s, for a moment, forget the plight of the African/Asian farmers (who you’re also concerned about) who have also lost the ability to farm because subsidies skew the global agriculture market in favour of rich countries. But what’s the deal with protecting EU farmers who already have the high standards to insulate the EU market. If, as you claim, they are so efficient, would letting in the small amount of farm produce from countries which DO meet your standards, really put all your farmers out of business?

          • Sophist

            “If, as you claim, they are so efficient, would letting in the small amount of farm produce from countries which DO meet your standards, really put all your farmers out of business”

            I don’t claim the EU farmers are efficient, the CAP is primarily aimed at food security rather than lowest cost production – I’ve said I’m happy with such an arrangement. African farmers should be regulated by their own goverments to provide secure food for their own populations, rather than provide cheap cash crops for us. I suspect though that African governments are rather in favour of cash than the well-fed population. I think efficiency is a chimera, a empty stomach isn’t.

        • George the Curious One

          The argument is about the reasons why they can’t compete; not because they aren’ efficient producers in a European context, but because his customers, multinational retailers have access to alternate suppliers
          Thats statement & mine was originally made in the general context of MNCs & producers (ie all sectors). Agriculture was only one example Its true, what you said about the CAP, being more about security.
          But why should Africans/others be left behind in their development by European policies which, due to its size & its intermittent participation, affect global market conditions negatively for everyone else,
          It’s fine if you want to protect your agriculture market and keep the CAP (really). But you cannot then complain that this emphasis on agriculture, has no impact on other sectors. because, IMHO, the decline in other productive sectors in Europe, vis-a-vis other countries, is partly due to the lack of funds & investment here.
          Also, what does a country do if it cannot produce food due to geographical constraints – eg it is mainly desert? Should it be deprived of the opportunity to produce and sell manufactured products which would enable it to buy food from elsewhere as its food security plan. Global buyers like Tesco are their direct lifeline for food, and indirect lifeline (buyer) for their products. This is also my country’s dilemma. We can’t really be thinking of your local manufacturer who has lost the will to live because he doesn’t want to compete with us for Tesco’s & other companies’ business. If we don’t find a customer, we don’t get to buy the food we need at prices which the EU (& also, the US) have already skewed more efficient producers..

          • Sophist

            “But why should Africans/others be left behind in their development by European policies which, due to its size & its intermittent participation, affect global market conditions negatively for everyone else,
            It’s fine if you want to protect your agriculture market and keep the CAP (really).”

            Do you mean (1) why should Africans not have access to the European market, which means they can’t develop their own agriculture; or (2) why should Europe dump it’s excess production onto the world market, which depresses development in Africa.

            (1) Because their producers don’t bear similar social and environmental costs.

            (2) They shouldn’t: food security means supporting a the right level of food production not subsidising over production. I don’t want to pay over the odds for an agricultural system I don’t use. The EU seems to have made some progress on this since the grain mountains and wine lakes of my youth.

            “But you cannot then complain that this emphasis on agriculture, has no impact on other sectors. because, IMHO, the decline in other productive sectors in Europe, vis-a-vis other countries, is partly due to the lack of funds & investment here.”

            I’m not: though I would be worried if certain strategic manufacturing activities were no longer viable in Europe, like Steel, Oil refining.

            ” Also, what does a country do if it cannot produce food due to geographical constraints – eg it is mainly desert? Should it be deprived of the opportunity to produce and sell manufactured products which would enable it to buy food from elsewhere as its food security plan”

            Your arguments are a strange mixture of demands for both efficiency and altruism, but I suppose that is the myth of invisible hand. My first reaction is ‘you better hope there is oil under that desert’. But there is a question about scale and viability, I don’t think an autarkic Hungary is viable, why should I think desert nations in Africa are? I can’t think of a large developed nation that hasn’t protected its agriculture, or manufacturing as part of its development path. Relatively resource rich countries have different development paths, as do small trading centres. Your people should find one that is appropriate to your country’s circumstances. But why do we Europeans have to give access to our markets, which we have developed to non-European countries that don’t aspire to a common European future? Post-colonial guilt?

          • Curious George

            why do we Europeans have to give access to our markets, which we have developed to non-European countries that don’t aspire to a common European future? Post-colonial guilt?
            Well, you took advantage of the resources in the countries you colonised during your development, it would be nice to give to give something back to them on a commensurate level, but that’s probably not going to happen. Setting that aside, if you now expect to sell your goods in our markets, then you should also be opening your markets to our goods.
            I agree on part (1) of your point, that Africans/others do not have an (automatic) right to your agricultural market. But at the same time, your goods should not be dumped into global markets. It is immaterial that the EU has made advances, since I already mentioned that subsidized EU agri products (milk, meat) products are being sold in my country. That gives it an unfair edge against farmers from poorer countries.
            No, I’m not demanding for any handouts. So long as the market is not skewed, countries will be given an opportunity to find a their own development path by becoming more efficient in whatever comparative advantage they have.
            Achieving higher levels of efficiency is not a myth. Efficiency essentially focuses on higher output relative to the inputs, and it gives companies and countries a path to making a living and satisfying a potential customer. Countries like Japan have been very successful in achieving high levels of efficiency in manufacturing by reducing the wastage of inputs, and producing high quality. In services, the consumer music is a clear example of having achieved very high levels of efficiency. 20 years ago, you’d be limited to what is available in the neighbourhood store, and would pay a lot more or have to wait to get what you want. Today, with technology and free markets, you can legally listen to any song you want at any time or anywhere for almost no cost (youtube, streaming, or itunes). Actually the efficiency is more than 100%, if you consider than you also get crap rap music when you dont want it :)
            It did sound like you were talking more about small producers & retailers when you spoke about Tesco’s buying & retailing power.
            I would be worried if certain strategic manufacturing activities were no longer viable in Europe, like Steel, Oil refining.
            As a non-European I’d be worried if Europe had that mentality, because I’d be constantly looking over my back wondering at what stage European would start looking for more lebensraum.

          • Sophist

            Curious,

            “I already mentioned that subsidized EU agri products (milk, meat) products are being sold in my country. That gives it an unfair edge against farmers from poorer countries”

            I agree, please send them back, or if they are spoiled dump them in the desert. Isn’t the problem here that – for example, Kenya’s farmers – are concentrating on producing flowers for us, rather than feeding their own population? Where ARE you from?

            “Efficiency essentially focuses on higher output relative to the inputs, and it gives companies and countries a path to making a living and satisfying a potential customer.”

            I’m not sure this definition of efficiency is the one you want, this is efficiency for a producer not for a market. An efficient market clears at an optimal level of production. Overproduction even one that consumes very few inputs (cf CAP) is as inefficient as underproduction (cf Kenya). Again you reveal your conflation of low prices – as a result of low inputs – with economic success. Low inputs can also be realised by avoiding social and environmental costs – for example the cost of supporting a well fed population.

            “As a non-European I’d be worried if Europe had that mentality, because I’d be constantly looking over my back wondering at what stage European would start looking for more lebensraum.”

            Thanks, George, for giving me a great opportunity to offend! I only see one difference between the visions of Thomas Jefferson, Cecil Rhodes and Adolf Hitler, and that is the need for the racial conflict. All three aspired to living space, whether it be in North America, Southern Africa or Eastern Europe. It would be logical for me for claim Europe needs as much agricultural land as it takes to support her population. But it seems she already has, though I not sure what the story would be if our agriculture was environmentally sustainable. As I hope you noticed, I’m a big fan of scale, the reason for this is that markets are more likely to allocate resources efficiently is they are big. Though it is already apparent that certain global markets are already never going to be big enough for this to happen – building planes for example, and my old alma mater, cigarette production. The good news for Europe is that there is still a queue of hopeful joiners, so we don’t to invade other countries to scale up, maybe your country will join! There is still the language problem, and the related democracy problem, so I am more economically optimistic about very large Nation States – China, India, the US, Brazil, Indonesia etc. But Nation states have had more problems co-opting additional territory and population than the EU has.

          • Curious George

            Hold on! On one hand, you argued that we should emulate the Kenyan example and produce high value flowers, to buy food from the open market (comparative advantage), but on the other, you also ask them to give up flowers and try to feed itself (maybe food doesn’t grow as well and the Kenyans would end up with less revenue to buy food) Which is it? In Narnia, it is only feasible to produce some chickens & vegetables (ok, some flowers), so we really appreciate your subsidized produce. However, we do not overlook the fact that selling your cheap products in our market not only undercuts prices, but also the poor Ugandan, Ukrainian, or Uruguayan farmer’s ability to sell his produce to us, to make a better living for himself.

            Yes, I was talking about producer efficiency, but it is not totally isolated from the realities of market efficiency. You & I alone cannot create an efficient market, especially when there are players not wanting to have one. If I was a producer waiting for one, I might go the way of those companies you mentioned long before we got there. Regardless of whether the market is efficient or not, an efficient producer realizes the priorities of buyers & capabilities of competitors, and wouldn’t under/overproduce because it is not in his interests. In any case, even if there was an efficient market, there would still be inefficient producers, ie (those who have low outputs or high inputs) who still sell all their goods, but not necessarily be profitable. This is opens up opportunities for efficient producers to increase their market share over the inefficient ones, without necessarily disrupting the overall demand/supply but probably reducing prices. I disagree with your statement that overproduction with the CAP was achieved with the consumption of fewer inputs. The EU hasn’t yet achieved the efficiency levels of the US, Australian, Canadian, or Argentina partly because of the subsidies.

            I think you misunderstood – I’ve never spoken about low prices nor limited the discussion to only one industry, agriculture. I’ve always spoken about value (ie having a market with several goods from multiple suppliers each providing consumers with different levels of value at varying price points). You seem to be arguing from the point of view of a single uniform good for all buyers. I agree, a lower price could result from avoiding social & environmental costs (who sets these costs btw – the EU, WTO, Canada the US, you?), but it could also be from achieving higher levels of efficiency. Not every country is like China, India, or various failed African countries – many countries do try to produce within their limits of sustainable social & environmental concerns.

            The industries you identified (oil, steel) are strategic to all of us. Hence, I too see no need for more lebensraum or colonies, unless you always envision a them vs. us racial/political conflict situation. I would think a much better (& civilized) option is to have countries competing for those strategic resources by buying them in an open global market (you’d still have the advantage over poorer countries :), so what you worry)

            If you’re thinking of accepting newer candidates countries to alleviate the resource issue, I think you’d be asking for more problems than it is worth. The economies of scale you talked about doesn’t work as well when countries have different advantages, but compete to produce the same products or same jobs eg in agriculture, but also in manufacturing. Also, the lack of mobility may be a stumbling block.

            “Where ARE you from?” The last person who asked me that disparaged every ethnic group he could think of, and eventually settled on me being a women abuser & a child molester. Olga once clarified that I’m from Narnia, although I prefer to see myself as a global citizen.

          • Sophist

            Curious,

            The posts are getting longer, and yours seem be full of claims attributed to me that I never made, or would be inconsistent with other things I have claimed. Rather than go through it and challenge each one. I state my general position instead.

            Free Market economics only obtain in unusual circumstances, where is does, it is the first objective of each player, households, firms and governments to shake off the discipline of the market to their own advantage. It is a theory “more honoured in the breach than the observance.”

            To finish on some up-to-date news about your fabled Asian producers, did you catch this in The Economist?

            http://www.economist.com/node/21543215

            It illustrates my point perfectly. If your wondering why they don’t just turn the machines off – I’ll hazard a guess from my own production experience – they’d lose even more money.

          • Curious George

            @Sophist – I agree the posts have gotten too long. Actually, we’re not so far off the same page. What you said about players shaking off market discipline to their own advantage is simply what I referred to as players needing to increase their own efficiencies within an imperfect markets for their own objectives (in my case, ability of the firm to continue operations)
            The example in the Economist about flat screens is typical in many industries, where goods & services are increasingly becoming commodities, and there is less profits in producing the lowest price products.
            Instead, you’d find the most successful & profitable companies are those which create a very high value & differentiated product for their customers such that they are willing to pay far more (than the marginal cost) over & above the price of the general commodity. An example of companies like this are manufacturers like Apple, Nike, BMW, Red Bull, but also service organizations like Goldman Sacs, Ritz Carlton hotels, Singapore Airlines, Mayo Clinic, Google etc.
            You’re spot on about their inability of flatscreen manufacturers to turn off the production button.

  • Sophist

    ” No one is forced to tolerate how MNCs operate in their own country, nor dictate how MNCs should operate in other countries.”

    They are if they have signed up to a treaty which commits them to a common approach to such issues, and a common negotiating stance over such issues with countries and organisations outside that treaty. I believe the EU is such a treaty organisation and Hungary’s only options are to advocate its case in EU platforms or withdraw from the EU. Trying to go its own way on such issues is a breach of its treaty agreements.

    “The great leveler as I always advocate is openness & a move towards competitiveness/efficiency”

    Only commesurate scale will force openness.

    • Viking

      Sophist says:
      January 24, 2012 at 5:07 pm

      I believe the EU is such a treaty organisation and Hungary’s only options are to advocate its case in EU platforms or withdraw from the EU. Trying to go its own way on such issues is a breach of its treaty agreements

      Agreed

      The EU are implementing ‘one-sided’ restrictions, like the new Carbon-fee for travel to and from the EU, that even non-EU companies must pay, like US and Chinese carriers

      The new ‘Tobin-tax’, part of the latest agreement with the 17 Euro-countries and a bunch of other member states (so far only the UK said explicitly NO (regardless what ‘leto’ is claiming)), is another such fee. The UK, regardless if it accepts it or not must pay it, for all financial transactions that involves another member state that is part of this scheme. The only thing the UK will not do, is collect the tax for themselves…
      It is estimated that in the UK this type of transactions are made with another member state in up to 80% of the cases, so the UK may lose a lot by standing out

      The EU being a very big matured market, bigger than the US-market and being more mature than the bigger Chinese market, has its chances to implement restrictions like this
      The big question is that all restrictions come with another price also and growth is not really a European dish

      • Sophist

        Who’s MagyarViking? Are there two now two Swedes posting here? I think with your home population of 9 million, that’s way over your allocation!

        • Viking

          Sophist says:
          January 24, 2012 at 8:24 pm

          Who’s MagyarViking?

          Do not feel afraid – it is just little timid myself, circumventing Erik’s latest attempt to make our lives harder
          Sometimes you need to change your handle to reset some new checking Erik introduced, so it will be something with Viking in it (still wrongly spelled in Hungarian though)

          MagyarViking is also my alias I use in Sweden, for some reason the alias ‘Viking’ was already taken
          And it pisses of all Fidesz/”Jobbik”-people in Sweden that I use ‘Magyar’ with my ‘anti-Hungarian’ opinions

          • Sophist

            It wouldn’t be the first time the English were afraid of the Vikings.

          • Cogito

            “it is just little timid myself”

            hahahhhaaaahhhaaaaa :)

            That was a good one! :)

    • George the Curious One

      You’re partly right on the first half of my original sentence.
      i. If countries do not like how MNCs operate, they can try to discourage them by needless bureaucracy or corruption. Several African countries (also WTO members) provide clear examples of this where even large MNCs leave all market activities to importers & distributors.
      ii. I already gave examples where efficient local service providers can have more leverage than a large manufacturer by controlling efficient distribution networks. The electronics market in Slovakia is an example closer to home.

  • Trader

    Very interesting discussion but I’m completely lost and bored which was perhaps the intention.
    How are you guys relating all this to the situation in Hungary? Disappointed in you once again, Georgie Girl!
    Here’s something perhaps may be of more interest and relevance: Not looking promising is it? =
    “European Union finance ministers (Ecofin) endorsed on Tuesday the European Commission’s view that Hungary had failed to take sufficient action to bring its budget deficit below the EU ceiling in a sustainable way, opening the way to freezing EU funds for Hungary from 2013. When asked by a journalist as to what these sanctions could be, EU Economic and Monetary Affairs Commissioner Olli Rehn responded that now the Commission ‘is free to decide to suspend up to 100% of cohesion funds for Hungary from 2013.’”
    (portfolio.hu)

  • Marad

    “The situation is intolerable”
    ‘So why do you tolerate an intolerable situation? The borders are open. Leave.’
    No thanks, I’m staying you’ll be glad to hear!
    Are you deaf, daft, as well as myopic?
    “Intolerable” for the millions struggling to earn a living and hold on to their homes and feed their children etc.
    And, the borders won’t be open for much longer if Orban and his cohorts get their way. You cynical bastard. Has Erik edited your “nick” for some reason???

    • .

      So who is the situation intolerable for? Apparently for you it’s a tolerable situation since you seem to insist on staying here. So this must mean you only reckon that the situation intolerable for some other people. So far so good. So who are these people? How many are there of them? Where are these people? You claim there are millions. How did they manage to get into such an intolerable situation since the April of 2010? Are you a spokesperson for them? Why cannot they speak for themselves? How did you acquire this really important position of speaking authentically for millions of people? How do you know the situation is truly intolerable for them? What makes the situation intolerable for them? If the situation is intolerable for them then tell them to leave before the EU hermetically seals off Hungary’s borders. And please do join them soon because you wrote the borders wouldn’t be open for much longer. That would be intolerable indeed if you’d be locked up here with those of us who don’t find the situation intolerable.

  • Marad

    @the nameless pitbull!The lights are on and there is nobody at home!
    Freedom of speech still prevails and it is sick communist bastards posing as nationalists that would like it to be different.
    I suggest you take down those pictures of Rakosi and Stalin, get up off your arse, and do a decent days work.
    And, it is your moron of a leader that seals off everything and destroys everything he touches: and morons like you marching with placards and empty heads and heavy hearts that prolong the suffering and strife.
    I’m sure I would give you the title “commissar” although stormtrooper might be more appropriate in your case.
    And, don’t forget what happened to your erstwhile leader, Ernst Julius Röhm, (November 28, 1887 – July 2, 1934)in the night of the long knives hit by your el supremo Alfie von Hitler! Intolerable situation isn’t it!?
    Always watch your back because short knives can have long arms!

  • Leto

    “In the spectacularly combative European Parliament session on January 18 when representatives of the socialist-green alliance mounted a frenzied attack on Hungary and her prime minister in a style bordering on hysteria, Guy Verhofstadt, leader of the Alliance of Liberals and Democrats for Europe, accused Hungary of ‘deficiency’ in democracy, the rule of law, freedom of religion, freedom of expression, and equality –
    quoting from an open letter by three members of the current Hungarian opposition.

    The international media has been inundated with anti-government letters and statements by the same opposition. How can a country be called oppressive and its freedom of expression doubted where an opposition member – or anyone – can write the following about his country in a foreign newspaper with impunity: ‘A junk country has a junk government and a junk prime minister.’

    How would the British or French public opinion react to anyone writing that about Britain or France, let alone their respective prime minister and president, both of whom would love to have received the electoral legitimacy accorded to Viktor Orbán?

    The fact is that many opposition figures in Hungary, aggrieved by their monumental electoral defeat, refuse to accept their loss of power, and concomitant diminishing of
    political influence and economic privileges.

    The role of the opposition is vital in any democracy as long as it works for the country. When the opposition stops playing by the rules of democracy and starts an overt verbal war against the country and its lawful government soliciting the support of their politically motivated foreign allies, that opposition loses its legitimacy.

    The huge demonstration in Budapest on 21 January showed the world that the majority of Hungarian voters continue to support the government and its policies.

    The apparent decision of the mainstream international media to ignore almost completely this demonstration of hundreds of thousands of people in a country whose government has been in the focus of intense and often hostile reporting for weeks on end goes beyond negligence.

    It disregards its duty of fair and objective information, the requirement of best practice journalism. Most importantly, it violates the principle of democracy to give everybody a fair chance to form an opinion based on untainted factual information.

    So far, Hungary and her legitimate government have been subjected to a double standard by the establishment Western media as well as elected and unelected officials in Washington and Brussels. Both the Western public and Hungary deserve better.”

    -http://www.dailymail.co.uk/debate/article-2092670/The-huge-protest-Budapest-showed-Hungarians-support-government–wasnt-reported.html

    Eric, I’m calling your attention to this article. Maybe you could do a post on this, too,, like all that Orbán-bashing articles…

    • MagyarViking

      Yes, please take it in (I have already mentioned in another thread)
      I mean we cannot miss these classic pieces of opinions:

      “The role of the opposition is vital in any democracy as long as it works for the country. When the opposition stops playing by the rules of democracy and starts an overt verbal war against the country and its lawful government soliciting the support of their politically motivated foreign allies, that opposition loses its legitimacy.

      The huge demonstration in Budapest on 21 January showed the world that the majority of Hungarian voters continue to support the government and its policies”

      a) Do not question the Government abroad
      Especially not MSZP/SZDSZ in connection with the riots 2006

      b) 5% of the Hungarian electors marching on a Saturday afternoon represent “the majority of Hungarian voters”
      It is obvious

  • Fairplay

    Leto. The torch that you hold for Orban Viktor is so bright that it is keeping you, and many like you, in the dark!
    I despise the MSZP and Gyurscany Ferenc with a vengeance, and posted nearly everyday on this very site complaining about them. GF and Lendvai became targets of ridicule and both were eventually exiled. Bajnai the liba-meister and his chancellor did reasonably well even though surrounded by a bunch of old goulash communists!
    Ignore the ad hominem arguments and concentrate on trying to defend the failed policies of Orban and Fidesz:
    “Strangely while the government is intent on belt-tightening measures, it seems to have tens of billions of forints available for the odd re-nationalisation deal. Moreover, the flat tax, considered by some as the original sin of Matolcsy’s economic policy, is said to have relieved the budget of some HUF 400 billion (EUR 1.32 billion) on an annual level. Against that background, the few hundred million forints that the state has recently forced sweets and snacks manufacturers to cough up in the name of the “chips tax” is ridiculously trivial and surely not worth the government’s dogged efforts.
    The government’s approach to promoting Hungary as an investment target is similarly baffling. While the country advertises itself as an IT location, the special taxes levied on telecommunications suppliers are making it more difficult for them to develop IT infrastructure”???

    • Leto

      I don’t have any problems with those crisis taxes leviedon multinational big businesses. Apparently you do but that’s your problem. In the case of the “chips tax”, it’s worth the efforts for other than financial reasons. Hopefully they’ll increase it later so that it’d make more sense money-wise, too. For the time being, they paid bonuses for nurses, paramedicals and doctors from that few billions of HUF:

      -http://www.delmagyar.hu/szeged_hirek/egeszsegugyi_dolgozok_potleka_lesz_a_chipsado/2251310/

  • Anonymous

    @Leto
    “The huge demonstration in Budapest on 21 January showed the world that the majority of Hungarian voters continue to support the government and its policies.”

    Eeeh…it only shows that VO is able to manipulate let’s say 5% to be desperate and in the dark so much that they show up. Majority????
    I have seen opinion polls showing the contrary. Orban is being more and more isolated within the EU…and loosing support rapidly within Hungary.

  • hungarysigned

    pollings are easier to manipulate as you know very well

    you, invisible majority, show your invisible people :-)

    THE PEACE MARCH REVEALED THE HOSTILE ATTACK ON HUNGARY’S DEMOCRACY

    laws will be modified but that is not your real problem

More content from Hungary's leading foreign-language media network
About Politics.hu | Become an All Hungary Member | Newsletters | Contact Us | Advertise With Us
All content © 2004-2013 The All Hungary Media Group. Articles, comments and other information on the All Hungary Media Group's network of sites are provided "as is" without guarantees, warranties, or representations of any kind, and the opinions and views expressed in such articles and columns are not necessarily those of the All Hungary Media Group.