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20 july, 2010, hungary: miscreant or wronged ?

As predicted after the weekend's collapse of talks with the imf-eu, the hungarian forint has plummeted, leaving the country's tentative recovery very much in the balance. The break came over the new government's unwillingness to make the deep spending cuts hungary signed up to in return for a massive loan. Now, investors will now run a mile, which the negotiators probably hope will change magyar minds. Strangely though, hungary has done extremely well in taming its debt over the last year. Stranger still, a focus of the outsider's ire is a large bank tax, which the imf states is "likely to adversely affect lending and growth". This is an odd emphasis, as surely fiscal contraction can come in the form best suited to the country & its politics. Hungary may or may not be right about the consequences of such action, but as long as it is getting its debt down, isn't that its own choice ? This is exactly the kind of tactics that get the imf a bad name, and a bigger shame on this occasion that the eu is co-conspirator.