Open

Coming up

Don't miss

Replay


LATEST SHOWS

INSIDE THE AMERICAS

Uruguay: freed Guantanamo detainees try to adjust to normal life

Read more

MIDDLE EAST MATTERS

Turkey: Inside the Alevi community

Read more

FOCUS

China: A tense Christmas in Wenzhou

Read more

DEBATE

Pope's Scathing Tidings: Pontiff Blasts 'Illnesses' at Vatican's Heart (part 2)

Read more

DEBATE

Pope's Scathing Tidings: Pontiff Blasts 'Illnesses' at Vatican's Heart

Read more

WEB NEWS

Gaza children draw what their future will look like

Read more

MEDIAWATCH

Catholic cardinals get coal for Christmas from Pope Francis

Read more

IN THE PAPERS

François Hollande's Christmas wish list

Read more

MEDIAWATCH

Embedded with the Islamic State Group

Read more

Europe

Austerity? What austerity?

Video by Gulliver CRAGG

Text by Gulliver CRAGG

Latest update : 2010-12-29

Not every EU country is pushing through harsh austerity measures. Hungary, which takes over the block's rotating presidency on January 1st 2011, is actually cutting income tax and raising benefits. Our correspondent went to Budapest to find out more.

Hungary takes over the European Union's rotating presidency on January 1st. It does so as a rather controversial player in the 27-member block: while a tough new media law has drawn rebuke lately from Budapest's European partners, the country's economic policies have also met with stern criticism from some quarters, while others are tempted to emulate them.

Hungary has suffered badly from the global economic crisis, and had to take a bailout from the International Monetary Fund (IMF) in 2008. It's still grappling to contain its deficit, and with public debt at 79% of GDP, it's the most indebted of all the formerly communist EU states.

Currently the prescribed remedy for Europe's less solvent economies is budgetary austerity. Hungary was playing the game, too. But earlier this year, the incoming Fidesz (centre-right) government decided Hungarians couldn't take any more austerity. Breaking off talks with the IMF, it struck off down a different path: to balance the budget, it imposed "crisis taxes" on the banking, retail and telecommunications sectors, and (particularly controversially) is seeking to bring more than €11bn from private pension funds back into the state coffers. But is this a viable alternative, or just short-term populism?

Date created : 2010-12-29

COMMENT(S)