HUNGARY: Moody's Downgrades Sovereign Rating To Just Above Junk.

BLOOMBERG/
   Moody's, a U.S. based for-profit ratings agency, that many economists partly blame for America's recent disasterous financial troubles, has cut Hungary's sovereign credit rating by two levels to Baa3, just above junk bond status.
   Moody's believes that populist PM Viktor Orban's (pictured) policy of plugging budget holes with “temporary measures” won't work.
    Hungary reportedly has the eastern EU’s highest debt, about 79 percent of GDP this year.
     “The government is relying only on short-term measures and doing everything to avoid losing popularity,” said hedge fund manager Daniel Bebesy. “We don’t see any signs of structural changes, only the patching of budget holes by spending the private pension fund savings.”

CZECH REPUBLIC/HUNGARY: PMs Oppose EU Dictating Budgets; Support Croatia's Entry.

PRAGUE DAILY MONITOR/
      Both Czech PM Petr Necas (pictured far left) and Hungary's Viktor Orban (pictured 2nd from right) oppose having Brussels dictate their future budgets and support Croatia's entry in the EU.
     "We do not want the tax unification... we do not want the national governments to become a postman who will take over orders from an EU body and work out a budget to be submitted to parliament," stated Necas.

HUNGARY: Orban's Proposed Tax Plan May Not Stem Budget Problems.

BLOOMBERG/
     PM Viktor Orban plans a flat 16% personal income tax next year after cutting the corporate tax to10% for small companies to encourage job growth. All this while increasing temporary levies on banking, energy, retail and telecommunication industries and trimming  state bureaucracy.
     But Hungary's Fiscal Council predicts that it won't be enough to fill the budget gaps... which will increase by 200 billion forint ($1 billion) in 2012 and as much as 700 billion forint from 2013.

HUNGARY: 2ND UPDATE: Another Sludge Spill Still Feared; Plant Executive Arrested.

NEW LINK/ BBC/ UPDATE: 11 OCT:

    Zoltan Bakonyi, the chief executive of the industrial plant responsible for the massive toxic sludge spill, has been arrested.

   It was also announced that the company would be temporarily nationalized and bear any damages.

  Repair work continues on the deep cracks that have appeared in the reservoir holding yet more toxic sludge from the alumina plant near Kolontar.

   Prime minister Viktor Orban had the village evacuated because it was "very likely" that an entire wall of the structure would collapse, releasing a fresh 500,000 meter wave of the chemical effluent that has killed  8 and injured 150.
"The wall is in very bad shape, " said Orban. "We have started to build dams in the direction of the populated areas to slow the flow of the material in case of a new incident."
  A spokesman said the effort to contain the waste was "a race against time" as further rain threatens to increase pressure on the reservoir wall.

HUNGARY: 3RD UPDATE: Toxic Sludge Reaches Danube ; Death Toll Now 7.

BBC /  08 OCT/
   Even as the massive toxic sludge spill reached the River Danube, Hungary's PM Viktor Orban is downplaying fears of widespread pollution. Alkaline levels that killed all the fish in one river were now greatly reduced but being monitored.
    But now officials are concerned that toxins from the drying sludge could be spread through the air.
   Hungary has opened a criminal probe and authorities now say it will cost tens of millions of euros and take at least a year to clean up the damage caused by a spill of toxic, red industrial sludge. They are asking for help from experts.
    A state of emergency was declared in three western counties after chemical waste containing dangerous heavy metals burst from a reservoir at the Ajka Timfoldgyar aluminum plant.
     Seven villages and towns were covered by an estimated 1 million cubic meters (35 million cubic feet) of toxic sludge that swept cars away, damaged bridges and houses and forced the evacuation of hundreds of residents.
   Greenpeace is calling the sludge spill is "one of the top three environmental disasters in Europe in the last 20 or 30 years."

NEW !!! Read about:  MAL Hungarian Aluminum, the privately held company behind the spill and their liability.
           http://www.bbc.co.uk/news/business-11501441

To SEE Excellent quality video (1:38 ) on YOUTUBE ( from Russia Today:)
http://www.youtube.com/watch?v=xEMWh6EjJoY

HUNGARY: Foreign Media On PM Viktor Orban.

HUNGARIAN SPECTRUM BLOG/
3 x POSTS about media, starting with the WASHPOST/ 
   "I must say that Viktor Orbán's foreign press is abysmal. Most writings in the English-language press found Hungary's decision to break off the negotiations with the IMF wrong-headed, with the notable exception of Adam LeBor in The Times (July 26) and an opinion piece by a Washington-based economist, Mark Weisbrot, in The Guardian (August 9). Weisbrot is an expert on Latin America and a great admirer of Hugo Chavez. The fiercely anti-socialist Hungarian government wasn't picky: it was most grateful for Weisbrot's encouraging words. Today I'm going to focus on the foreign reaction to what's going on inside of Hungary. "

HUNGARY: PM Orban's New Hungarian Revolt Vs IMF And Central Banker.

NYTIMES/ LANDON THOMAS Jr./         PM Viktor Orban continues stirring the populist pot by blaming central bank head Andras Simor for his nation's recent economic crisis. Plus, Orban wants to reduce Simor's huge $458,000 annual salary...by 75%. Orban's meddling makes the EU and the IMF uncomfortable. So does the PM's efforts to levy a new tax on banks.
As Landon Thomas observes Orban is tapping into the social resentments that got him into office and may spread to other nations as they try to impose fiscal discipline on their citizens.

HUNGARY: PM Orban Standing-up To IMF And EU.

WSJ/ GORDON FAIRCLOUGH /  
    New PM Viktor Orban believes he is promoting a "patriotic economic policy" and preserving economic independence by resisting some IMF and EU requirements. Especially in a tiff with them over a new bank tax, Orban insists that after October, Hungary can go it alone without the financial safety net afforded by following IMF/EU dictates.

FAIRCLOUGH:    "It's an economic freedom fight," said a senior official in Mr.Orban's administration. "We are getting back the financial independence of the country."
Hungary's rebellion against the budget-cutting approach of the IMF and EU is an unwelcome development for leaders of the two organizations, who also are trying to enforce austerity programs for other governments, such as Greece's, that have been bailed out after amassing large public debts."
"No one should decide for us what we should do with the Hungarian economy. A state should be sovereign," said Agnes Naray-Szabo, a 26-year-old high school teacher who says she thinks Mr. Orban and his Fidesz Party have been doing a good job.

POLAND: New Central Bank Chief Wants Regional Austerity.

WSJ/ Gordon Fairclough/      Marek Belka, the former IMF official now heading Poland's central bank believes that EU governments must start spending cuts and reduce debt loads or they may harm their neighbors. The zloty was dragged down with the Hungarian forint v the euro after the IMF and EU ended talks with PM Viktor Orban. They said Orban wasn't doing enough to cut spending. Belka believes only "moderate" austerity cuts are needed.  (Foto of M.Belka)

HUNGARY: Moody's And S&P May Downgrade Credit Rating To "Junk" After PM Rejects IMF.

REUTERS/      Moody's may downgrade Hungary's Baa1 credit rating because of increased uncertainty over its fiscal outlook and economic prospects while S&P has revised its outlook to negative from stable, while affirming its BBB-/A-3 rating, which is already lower than Moody's. PM Viktor Orban just announced that his new government no longer needs help from the IMF and that he won't seek to extend an emergency financing agreement of nearly $20 billion euros it signed in 2008.
(Web foto of V.Orban)

HUNGARY: IMF Talks End Abruptly With $20 Billion Euros At Stake; Big Forint Sell-off.

REUTERS/     The IMF abruptly ended two weeks of talks with PM Viktor Orban over disagreements about plans to control budget deficits. At stake is $20 billion euros. “This is definitely negative for bonds and negative for the currency, both in speculative terms and in real flows,” said Nomura economist Peter Attard Montalto. “For an IMF statement, it’s pretty damning." Investors sold off the currency, the forint, to a 14-month low, while bond costs soared. The governments of Romania and Latvia may be challenged next.
(V.Orban foto)

HUNGARY: Will Cut Central Banker's Pay And Defy ECB.

BLOOM/      The ECB told Hungary NOT to cut central bank chief Andras Simor’s $458,000 annual salary by 75% because it threatened central bank independence. Simor earns 2x as much as US head banker Ben Bernanke. PM Viktor Orban has tangled with Simor and wanted him to quit for too slowly reducing interest rates and for having kept investments in Cyprus instead of Hungary. Simor has said he will serve out his term til 2013. Simor's wage cut would also underline Orban's symbolic efforts to cap state salaries at 2 million forint ($8,993), 10x the average monthly gross salary... to reduce the budget deficit .(Foto of A. Simor)

HUNGARY: Hungry For Cash, New PM Orban Taxes Banks.

BLOOMBRG/    Two months after newly elected PM Viktor Orban promised “a new system” bankers are finding out what he means--TAXES. Hungary wants to raise 200 billion forint ($880 million) and may end up being the most punitive country of its size for the region's bankers.

HUNGARY: Fidesz Party's Orban Returns To Power; Talks Tough.

BUSINESSWEEK/    Fidesz Party leader Viktor Orban returned to power after eight years, with a two-thirds majority in parliament that lets him change the nation's Constitution. And he is talking tough about his economic policies not being dictated by international lenders.  “Hungarians brought down a regime and founded a new one,” claimed Orban. He wants to renegotiate and extend Hungary’s $27 billion emergency loan agreement with the IMF the European Union and the World Bank, which expires in October. "To me, neither the IMF nor the European Union's financial institutions are our bosses. We are not subjugated to them. It would be a big problem if we were."

HUNGARY: Investors Hold Back Before April Vote.

MARKETWATCH/    Some foreign investors are cautious ahead of Hungary's upcoming parliamentary elections because of the nation's budget deficit and its economic growth. Fidesz, a center-right party led by Viktor Orban, is expected to win by a big margin. "Fidesz remains far ahead -- they are trying to be centrist, bland, and uncontroversial," said analyst Preston Keat.