Hungary’s Prime Minister Viktor Orbán is in a difficult position because of the Hungarian economy. The Hungarian government must bow to the European Union and the country’s investors. This is how the Financial Times begins its article, promising to cut energy price subsidies and tax breaks while offering social reforms to Brussels.
The Hungarian budget deficit is growing, inflation is rising, the forint is weakening and the sell-off in the Hungarian government bond market is worsening the situation of the Hungarian economy. Brussels must show Orbán and the Hungarian government some efforts to restore the rule of law. Hungary will not receive the EU recovery funds if the country fails to act.
According to Zoltán Török, an economist at Raiffeisen Bank, market pressure in Hungary is enormous. Török believes that the government has no other option but to reach an agreement with the European Union, napi.hu writes. Without EU financial support, there is no chance for the Hungarian economy to grow. Besides, if there is no agreement, it will significantly worsen Hungary’s economic image worldwide.