My 1998 paper on integration

East-Central Europe on the Eve of EU Enlargement

Paper for the 1998 ISA Convention (Minneapolis MN, USA)

1. Integration and systemic changes

Hungary, Poland, and the Czech Republic may acquire full EU membership within some years. Their recent efforts on the way from association to accession are aimed at applying integration measures pertaining to their economic and social performance, policy, regulation and institutions. I thought it would be proper to present here a sketchy review of some similarities and some particulars of their foreign economy reorientation and internal transformation. Some comparative data are also appended to this text. The first data group on the Czech Republic, Hungary and Poland (I) consists of average long-term indicators and their annual change for the last couple of years. The second one (II) covers an intermediate period of 1991-1994, the third (III) – 1995. (II. and III. with data on Slovakia.)

The recent westward integration drive of the subregion is a logical corollary of systemic changes which began back in 1989. By this transition the nations in question started to acquire an integration compatibility with their Euro-atlantic partners. There are two levels of integration compatibility. The first one consists of steps that ­- from a general economic rationality viewpoint – long ago should have been introduced. The second level contains measures pertaining more specifically to EU regulations.

Steps toward the EU assume a respective drive for enlargement that was discussed on the Intergovernmental Conference. [1] Still after the Amsterdam summit in many respects a decisive attitude is yet to be adopted, but it is definitely acknowledged that the three nations are prepared for beginning talks about their EU accession. Enlargement will involve medium-term costs and lasting benefits both for the European Union EU and its new members, but the comparative weakness of the latter calls for EU assistance. As a matter of fact the recent fifth expansion deals with a zone of small and medium sized countries with less advanced economies than the EU average. Previous expansions also included some similar nations, but the recent one is the first to deal with several former East-block states. (German reunification was a special case.) Because of its scope and its diversity, it has to be preceded by more important changes than the previous ones.

In addition to and in connection with the deepening of the Union, EU will have to address the implications of the increased number of members. Still more flexibility is needed so as to give enough time to the new member states to attain integration conditions gradually. The actual accession should take place only in sequences. Block treatment is excluded in respect of the above named three countries either. Their background and process of social transformation is characterized by some general as well as special features. That calls for some historical reviews.

As a common historic feature, the three nations in question have been demonstrating their socio-cultural affinity with the West for many centuries. Early in this millennium, or in Dante’s time in spite of some Eastern-type phenomena they gradually diverged from the developmental models existing just across the divide line between civilizations, in the Byzantine-orthodox and the Islamic areas. This distinction was preserved even afterwards, when these countries have developed also differences from the West in their patterns of social action, economy, political systems and the way of life. After 1948 they fell under Soviet domination and, later, Soviet implosion was a first condition and general background of their transition.

Another resemblance pertains to the present state of affairs. Social transformation has attained a crucial point of no return, even if the new system has not fully developed yet. The situation is far from being an ideal one, but democracy is stabilized, market economy is operating. There is continuity in legality, owing to which the process of transition is characterized by relative peace and stability. Economic and political freedom were won by democratic elections and in that sense the end of the old regime was much better than its start.

Rule of law, real separation of powers, individual freedom, human rights and property rights have already been established. They are at the root of the very existence, and meaning of any present and future governments, not excluding ones assuming a socialist tinge. Political conflicts are being fought through in parliamentary forms at the same time when, in some Balkan states changes have included explosion of violence and ethnic-religious hatred left a whole area with still smoldering ruins of social, economical and environmental disasters. In Central Europe the former Czech and Slovak Federation has disintegrated due to national differences but the process was smooth. In these circumstances a recent high degree of ethnic homogeneity, of no value in itself, has been an important asset of the three Central European countries on the eve of their EU membership.

The Euro-Atlantic and global implications of changes are demonstrated, inter alia, by the operation of non-European multinationals in the subregion, OECD membership of the Czech Republic, Hungary and Poland, and the invitation extended to these countries to adhere to the North-Atlantic defense community. There are also trans-systemic (not transition-specific) corellative links and similarities of this area with the rest of Europe: the evolving digitalization of life or the restriction of growth of expenditures on welfare are international attributes of a global transformation process. The same is true concerning the fight against drug abuse, terrorism, money laundering, nuclear trade, etc.

Economic conditions are the main concern both from the viewpoint of transformation and integration compatibility. Macro-economic situation was by no means attractive over the 90s. The firms of the subregion lost from one day to another about two thirds of their East-European trading partners and markets for products, that could not be sold elsewhere. Equally the supply of commodities and raw materials from these markets dried up . The impact of war in former Yugoslavia was anything but beneficial, (especially for Hungary bordering with the territory of the tumultuous Southern Slavic area).

In light of these events, a degree of versatility of the three nations’ economic-cultural potential was demonstrated by their transition achievements. Denationalization of most assets was essential for the economic transformation. Industrial restructuring, evolving services, rising productivity are salient indicators of change. Growth is resumed. There have emerged millions of small entrepreneurs to become a most important accelerating factor of development. Large international companies, even criticised for some negative consequences, greatly contributed to capital imports and economic growth. There was a considerable shift (reorientation) of foreign trade to Western Europe. The latter now accounts for about 2/3-3/4 of exports. The export boom didn’t last for long and the terms of trade worsened but an actual trade integration into Europe was completed in two years. An attached chart (Chart 1.) on composition of trade by partner covers not only the three nations in question but also other transition economies. The real exchange rates of the three countries and Russia – influencing their trade performance – are reflected in Chart 2. Medium to long-term financial flows of all countries in transition are presented in Chart 3. Separate studies should be devoted to the latter, which is an increasingly influential factor of transitional economies.

Preparing for full membership goes hand in hand with a profound economic and social change i.e. a process which is in short and medium term jeopardizing stability. Prospective EU members have been receiving some financial transfers from the Community. As associates they have been getting PHARE benefits that, coordinated with other assistance, IMF stand-by loans, World Bank benefits, EBRD investments are helping defray a part of transition costs and making a substantial contribution to the preparation of integration conditions. In spite of this the main onus of changes is born by the three countries themselves. An unbearable burden would endanger not only their economic and political stability, but the whole process of peaceful European development. EU assistance is limited but there are other ways and means to avoid a part of transformation costs. In accordance with the above mentioned temporal-historical approach, instead of giving money EU may give time to its new members. I mean graduality. Of course, the period of necessary changes may not and should not be stretched along for an infinite number of years. And EU expenditures may not be excluded from the scenario. Just the rule must be applied: if EU is unable to assist in changes exceeding national potential, it should tolerate a more moderate speed of integration.

2. Some national particulars

At the beginning of changes, in 1990, the GDP per capita indicator, as compared to the Austrian level, was 30.4 for Poland, 37.8 for Hungary, and 50.4 for the Czech (and Slovak) Republic [ 2, p. 5.], which was an evidence of differences in their level of economic development. This gap remained in relation to Austria. A special feature of Poland was that a profound and lasting crisis beginning in the late 70s preceded the systemic changes. In the other two countries the recession came later, but to reduce it to a “transformational crisis” (and nothing more ) would be a simplification. A distinct feature of Hungary is a model of its society historically different of the Soviet Communism as a result of substantial reforms. With the introduction of a new economic mechanism in 1968 the economy reached a degree of adaptability to domestic needs and international markets. The reforms, even if they were partly reversed and failed to reach a critical mass, indeed helped to modernize and open the economy. In the 1980s the reforms already were unable to mitigate the decrease of the economic performance

Some peculiarities of the three countries stemmed from the respective extent of their previous openness. Their “endowment” of international indebtedness was highly different. The Czech Republic boasting of the best economic indicators at the beginning of the transition was much less indebted than the other two nations. Poland had more debt and needed relief yet in the 80sThe per capita indebtedness was the highest in Hungary, but the country managed to avoid rescheduling.

The privatization process was also different. In the Czech Republic large domestic financial institutions with the majority votes in the hands of state agencies or their holdings were the main agents of acquisition. The latter was mediated by coupon privatization while private capital was the main actor of privatization in Hungary.

Decisive privatization moves and the business environment were the main two factors due to which Hungary attracted a fairly good share of working capital imports, per capita the highest in the subregion. The country could not avoid some ill-conceived and ill-administered economic measures. Some data on Poland’s performance in this field are appended. They cover inflow of foreign capital and its sectoral structure.

Despite Hungary’s impressive privatisation record and lead in attracting investment GDP rose at an estimated 2 per cent in 1995, (at about 1% in the following year) well below the 5-7 % in Poland and the Czech Republic. Inflation was slightly over 20 % in Poland and below 10 %. in the Czech Republic. The Hungarian rate was 28.2 % in 1995 [ 14 ] and remained high in 1996. More specifically some aspects of this nation’s experience will be dealt with in the next section.

3. The Hungarian experience

Already in 1990 major trade liberalization moves were made in conformity with WTO ( then GATT ) rules on abolition of non-tariff restrictions. A newly introduced set of laws was aimed at harmonizing the Hungarian system with international norms. Some of the most important acts of economic legislation were to guarantee the investments against nationalization and enable foreign companies to repatriate in convertible currencies their capital and profits. This legislative direction was continued over the nineties. [3]

As far as bad news are concerned, the GDP was decreasing for 5 years. Ill-conceived policies have much contributed to the worsening of the situation at least in the fields of agriculture, public finances and indebtedness that went on growing, up to 1996.

In 1991-1992 Hungarian macro-policy could still boast of some stability improvements and in this respect the nation was indeed doing relatively well in comparison with some of its neighborhood. It was during this period that the bulk of foreign trade shifted to Western Europe. [4, 1992,7.] International current accounts were balanced, inflow of foreign working capital was continuous.

But GDP decreased by 20% from 1989 to 1992, industrial output decreased by about 1\4 and the rate of unemployment reached about 13% [5, March 1992]. In 1991 inflation and interest rates reached more than 35%, and the maximum tax rate on personal income was 50%. In connection with a slower rise of consumer prices (at about 23%) in 1992 the tax ceiling was 40% and nominal interest rates were also lowered. But state deficit was the highest ever recorded in Hungary. Pending on the methodology of calculation it was estimated at 6-8 percents of the GDP. [4, 1992, N 12 ] As all indicators of output worsened, money supply increased in 1992 by 25% [5]. While the excess money was supplied to the government the access of the business sphere to credits was restricted [5]. More than 63% of the GDP was concentrated in various funds of the central government, state social security and municipal authorities [6]. The government failed to begin reforms in this field. Still for five more years this indicator remained high.

The speed of liberalization was somewhat exaggerated in view of the actual level of development of the country while the depreciation of the Hungarian currency was insufficient.

There were some signs of economic recovery, partly at the expense of economic equilibrium in 1993. The balance of payments drastically worsened in 1993 to attain a deficit about$ 3.5 Bn. That was partly a result of decreasing agricultural production and exports. There remained also serious imbalances in the state budget [ 7, N 4.]. Inflation was checked at 22.5 % as compared with the previous year’s 23 %.

Along with transition processes a profound degradation in average living standards was underway. The fact itself was tolerated conditionally by the public only within a perspective of economic growth in not too distant future. A change of administration was to take place about the middle of 1994. Data for the first half of 1994 showed continuing growth and continuing disequilibrium. [ 8 ] For the first 5 months on the base of the same period of 1993 industrial output volume reached 108 , investments, 150. Gross international debt was increasing and so was state budget deficit. These imbalances did not stop under the new government. Disequilibrium culminated at the end of 1994. The deficit of the balance of payments amounted to about $ US 4 Bn and the deficit of the state budget to HUF 340 Bn. The same trends continued in the first quarter of 1995. They were stopped as a result of sweeping austerity measures and a sharp turn in the economic policy of the government [ 9 ].

The quantitative stabilisation targets included a cut in the balance of payments deficit to $ US 2.5 Bn. ( by 1.5 Bn. ), a cut of the state budget deficit to HUF 200 Bn. ( by 140 Bn. ), a cut in the number of state employees by 15 %. and aimed at a 27% rate of inflation. [ 10 ] Stabilization tools included currency depreciation of 9% at once and continuing on a sliding scale (appr. 15% on a yearly base.)

A temporary 8% import tariff supplement was introduced. Car import tax increased and reserve requirements for banks were raised. Credit demand of the total public sector was to be limited to the extent that could be covered mostly by household savings.

Comparative data on 1994 and 1995 [ 12 ] showed that in result of austerity measures while in 1994 export sales reached 83% of the 1985 level, in 1995 they reached 99.3%, i.e. practically equalled the latter. But employment went on shrinking. On the base of 1990, from 1994 to 1995, consumer prices changed from 241.6 to 309.7. State deficit was reduced by about 40% in 1995. A major foreign capital influx came in December 1995. Net debt at the end of 1995 amounted to $ US 16.8 Bn. of which the state debt was only 11 Bn. [ 13 ].

In 1995 reducing the general government budget deficit was given high priority in the economic strategy of the government. A reduction in real wages (appr. 12 %) was contended by the government to have contributed into income reallocation to savings and improvement of competitiveness of Hungarian products. But the reduction of real wages was exaggerated, it hindered growth and collecting more state revenues. The ratio of net external debt to foreign currency revenues was indeed reduced. A combination of high state debt, high interest rates and inflation, as well as high taxes have depressed economic growth. It may be added, that a major decline in the public sector deficit was up to the end of 1996 hindered by growing interest liabilities of the state budget. There remained a need for substantial narrowing of state benefits. While Hungary’s GDP per capita was a fifth of the OECD average, the share of GDP it spent on welfare was 1.4 times higher [ 14 ]. Around a third of state spending was channelled through the countrywide pension and health funds and central government had to finance their deficits [ 15 ].

In 1996 the stabilisation policy was sustained, large foreign capital inflows came, but the economic growth was marginal, about 1 %. Inflation was slower than in 1995, but remained at a high, 23,6% level. The management of the pension and health care funds remained unefficient. A fundamental reform of pension system was enacted in 1997. Indicators of a substantial growth recovery in 1997 are attached to this text as a last-minute update.

A whole system of tools is necessary to apply so that economic growth gradually accelerate and reach the annual EU countries’ average. Hungarian minuses in this respect were concentrated in earlier years when changes were achieved at the expense of negative growth, increasing unemployment and monetary disequilibria. Now there exist some achievements in restructuring, stabilisation, privatization and marketisation. These factors are contributing to achieving the economic conditions for EU membership.


Summing up, it has to be recognised that integration is not only to provide new prospects but also require different patterns of behavior from all the business and public actors. It comprises a gradual advancement from low competitiveness and poor international performance to a developed market economy.

By way of just mentioning the following problems may be enumerated.

Full EU membership requires the adoption of some more harmonisation changes in addition to those implemented already.

The issue of preferences in agricultural market accession is very complicated. Even the possibility of social unrest is present in some regions in this sector.

Some indicators of inflation and deficit of current account exceed the EU Maastricht threshold and the three nations are not yet able to lastingly abide all these requirements.

Monetary equilibrium may be sustained neither as a simple result of decision-making, nor as a pure consequence of self-clearing market workings, but rather as a trend stemming from the interaction of business with monetary policy. Within some years the countries have to achieve full liberalization of capital movements.

4/ References

1. Commission Opinion. Reinforcing political union and preparing for enlargement. Brussels, February 1996

2. Comparaison internationale des produits intérieurs bruts en Europe 1990. Nations Unies, New York et Geneve, 1995. p 5.

3 Hungarian Rules of Law in Force (HRLF), 1992-1996

4. Monthly Bulletin of Statistics (Statisztikai Havi Közlemények.) Központi Statisztikai Hivatal. 1992.

5. National Bank of Hungary. Monthly Reports, 1992.

6. Minister of Finances. Report to the Parliament, August, 27, 1991.

7. Monthly Reports of the National Bank of Hungary ( Magyar Nemzeti Bank Havi Jelentések) 1994

8. MTI Press Release (MTI Hirek) 04/26/94 and 05/11/94

9. Government decree 1023/1995, Magyar Közlöny, 22 March 1995

10. Népszabadság, 16 March 1995

11. Napi Gazdaság, 16 March 1995

12. Monthly Bulletin of Statistics (Statisztikai Havi Közlemények) 1996/1. Központi Statisztikai Hivatal.

13. Népszabadság, March 22, 1996

14. Financial Times, March 12, 1996

15. Social and Labor Market Policies in Hungary, OECD, 1995

Capital and Money in Hungary (3)

My 1991 London paper as cited in 2014.11.30. 12:01 Italo Romano

Second Part


2.1. Economic performance and capital

A second brief remark on a question of first principles is surmised to be appropriate at this point. (The first has been made at the beginning of the previous part. Neither one is meant to say that all the rest derives from them.) One reason for considering monetary equilibrium conditions within the network of capital phenomena is the dependence of successful long-term stabilisation efforts on the regulating impact of profit motivation. There is a negative feedback between prices and market competition which is modified but not eliminated by monopolies. Technical progress with its intellectual requirements is an exigency for every actor of business life interested in getting hold of assets with added value returns. The latter is an attribute of an asset in its quality of capital. In a capital economy private market actors are the main risk- bearers and inefficient activities are eliminated on this elementary (micro) level. It is fool-proof in this crucial respect even if the profit maximisation is not an exclusive pattern of behaviour. /cf.1.7./ Efficiency remains a first principle of a capital-money-market system even if its functioning is consciously restricted with regard to labour participation /cf.1.1./ and long- term capital requirements /cf.1.4./The expansion of this system so that it embraces public welfare goods and services remains a contorversial issue. Here marketisation and demarketisation follow each other in a cyclical way.

In a command system the economic organisations are interested in getting hold of assets in the quality of the latter as production factors in general but not in their specific quality of profit- making factors. Without profit motivation and market there is no capital. Asset formation is called ‘capital investments’, assets are treated in many ways as if they were capital, even capital/production ratios are computed. Technical progress requirements and the intellectual tasks related to it are commanded from above, on behalf of an antiintellectual in its nature establishment. /cf.1.8/ Some workings of capital are simulated but nothing can substitute for the profit drive as an incentive of the economic performance. Accordingly, the system is not fool-proof on the level of national economy being the main risk bearer instead of the market actors themselves. For the last two decades the Hungarian economy has not been a traditional command one. Economic reforms amounted to the beginning of systemic change. Economic performance nevertheless remained weak because of the lack of capital stimuli of development and technical progress. It was not fool-proof either. For some 20-30 years there existed, in terms of animal-farm connotations, quite a number of dinosaur-like big enterprises with net incomes syphoned out of the state budget. That was equal to syphoning away net revenues from more efficient producers thus restricting their investments. Output volume and pattern developed independently of comparative advantages. Lack of competitiveness resulted in a downward shift of overall efficiency. Income- producing capacities of the national economy were not enough to sustain growth and welfare.

All this resulted in a creeping, and, after some time, gallopping inflation. Price rises escalated from a 7% average in the mid 80-ies to 16% in 1988, to 17% in 1989 and to 29% in 1990. /20/ The recent rate is estimated at more than 35%. As there exists a trade-off between the balance of payments and inflation the payments situation became better last year. While in 1989 the balance showed a 1,5 billion dollar deficit, in 1990 there was a modest surplus. (Ibidem.) But, as a result of domestic inflation it cannot be a lasting achievement.While the drive to achieve an ever better competitive performance is a longterm condition of a dependable and relatively stable economic environment inflation should not be explained away by the absence of this powerful motivation. Price stability existed in the fifties and sixties. Business is on an upward slope recently but so is inflation. Equilibrium depends also on how macro-policy meets the requirements of capital towards money supply.

2.2. Capital requirements towards money

It is well-known that market forces alone cannot stabilise the economy without proper macro-policy measures. An expectation- climate promoting capital accumulation and investments can be created only by a complex approach of which the relation of money and capital is an essential component. Capital as a determining factor of money-supply requirements is overlooked by one-sided analysis of money. There are autonomous value-preservation consequences of the capital stock. For example, accelerated depreciation-amortisation increasing after-tax profits leads to changes in velocity of circulation. The ceteris paribus rule applies here as well as in the whole of this paper. The relation of the volume side and the price side of productive capital is a determinant of the equilibrium of commodity markets, which is a main component of the overall equilibrium. Dynamic effects emanating from inner characteristics of capital pertain to the purchasing power of money. Efficiency and competitiveness exert a powerful impact on the dual /price and volume/ capital structure asynchronity of which is one of the roots of inflation. Some other parameters of capital structure are quoted below.

On the recent stage of development the exposure of market actors to a number of non-market influences distorts security prices. Under such conditions capital ratios provide an independent measure of assessment in supplement to security prices. In particular, capital ratios are widely in use for the analysis of bank activity. For example,the ratio of share capital to the total of assets. Regulating authorities control this ratio in narrow brackets. In the U.S.A., it should be within the brackets of 6%-12%. The larger the bank the smaller the ratio. In London clearing bank groups, between 1976-1983, total capital measured both against deposits and liabilities oscillated around 7%. Free equity capital measured against banking assets oscillated around 2%. /21/ These ratios in normal conditions provide some leverage for regulation in a degree necessary in a market economy. If that degree is not complied with, quantitative and institutional changes are called for.

Financial markets are the precondition of fiscal, monetary and credit incentives applied in conformity with international practice and requirements of business life. For example,necessary regulatory functions,such as open market operations or reserve requirements presuppose financial markets in the absence of which monetary flows can be influenced only through taxation or direct price and wage controls which increase market imperfections and interfere with property interests. Programs for coming decades should include monetary scenarios based on the growing role of long-term treasury bonds and other state-backed securities. These market instruments finance the budget deficit through increasing government debt. Long-term bonds may provide a yield producing, value preserving, profitable reservoir of wealth for private investors. Beside real estate and private securities, state bonds are also elements of wealth as an object of decisions on what is the advantageous allocation of individual financial resources. As elements influenced by open market operations they are instrumental in regulation of money supply.

2.3. Liquidity versus transactional approach

Monetary dynamics are partially under the impact of capital creating functions of the banking system. A well-known distinction between money demand and credit demand is adopted here. Credit demand expresses the needs of economic actors investing/spending more than their resources allow. Money demand is determined by transactional, liquidity and saving requirements. In Hungarian practice the main monetary aggregate is the stock of all liabilities of the banks minus intrasystem claims and foreign exchange.(M3) With set-aside or frozen deposits deducted from M3 one arrives at M2. Deducting from this long-term deposits gives M1. These definitions /in conformity with the definition of Hicks, 4./ rely on the liquidity approach, viz. on how quickly an asset can be brought into circulation. The most liquid asset is cash, not much different are current account balances. Equilibrium interests require that transactional needs are distinguished from the above. These needs derive from the fact that income and expenditure of economic units do not coincide in time. This asynchronity is bridged by transactional reserves which is causal foundation that the latter be selected within the M1 as subject to special regulation. The other part of recent M1, namely other assets up to one-year liquidity may be separated into some special aggregate.

The significance of all this is connected with deficit financing at high speed of inflation. The surplus of printed money which goes together with the increase of state expenditures has no autonomous mechanism of disappearance like the one in the case of credits created by banks. Increasing transactional needs are able to absorb a part of this surplus. Deficit financing beyond this level can be thought of as money- diluting emission. The proposition is that in Hungary inflation comes about mainly in result of this factor. Main economic indicators may be quoted as evidence. /21/ While additional working capital credit in l989-1990 was 148 billion net government credit took 99 billion Forints from the banking system or approximately 40% of credit growth since other items were not significant.

2.4. Redistributive effects

One of the main effects of inflation is the redistribution of real income. The owners of production factors try to compensate inflation by raising factor prices. The latter restricts the real demand for capital goods and though in accordance with the above paragraph aggregate nominal demand will not diminish partial equilibrium may be restored. But there are also actors of final consumption who are not owners of production factors. Among them the inactive population and governmental or any other public agencies insofar as their expenditures on health, education, social welfare and the like are financed by the state budget. Price rises diminish the real value of their respective budgets. That has, in itself, a boosting effect on their deficits and creates pressures on the whole of public finances. There is no negative feedback between deficit financing and inflation. The self-reinforcing effects of inflation increase even more if the government tries to compensate to a considerable degree the diminishing real purchasing power of final users who are not owners of production factors. Indexation which is a controversial practice even in conditions of creeping inflation, at galopping speeds works to the effect of further speeding up inflation itself. Price, wage, welfare, interest rate or tax measures are unable to stabilise the economy if they are taken in isolation. And even if they are taken together,but in a fictitious independence from their underlying conditions: their impact on the money supply and its impact on them, the state of savings and their trend,the speed and structure of growth , expectations,etc. The responsiveness of the economy to the same measures, e.g. 1%-point change in interest rates is quite different in different situations. As regards gallopping inflation, it puts in another perspective even the governing principles commonly agreed at in a normal setup.

As briefly mentioned above /cf.2.1./ marketisation is a controversial issue in the realm of public welfare services. Capitalization is a distinct matter and may be introduced independently of the above controversy. For example it offers some inflation shelters for the inactive population in the form of pension funds. Up to now pensions were paid from the state budget, with all problems resulting from that. There was no pension capital. The financial sources of pensions were accumulated on a yearly basis from old age security payments on behalf of active employees and from taxes. Under a planned new system anyone can make old age security payments into the pension fund he likes. The fund acts as capital, as a long-term investment fund subject to portfolio management. Long- term nature of these funds determines that a fair share of them would go into real estate business. Under specific circumstances of gallopping inflation the chances for preserving the real wealth in this form are better than in other forms. Pension funds may provide a part of purchasing power for privatisation of state enterprises especially in the service sector. They by no means can mitigate inflation in general but may be instrumental in preserving the purchasing power of pensions.

2.5. A diagnostic phase

Some exclusive schools of economic thought have offered one-causal therapies for curing the diseases of recession and inflation. These cannot be successful forever. Their application results in improvements for discrete periods of time. In scientific theory the purity of the main attitude is a precondition of creating a logically consistent system as a single, descriptive or presciptive, positive or explanatory approach to the object of investigation.

Macropolicy creates mixtures by taking and processing a multitude of components in order of attaining some particular objective. But, as in chemistry, it is not enough to have a variety of components. Their relative weight, the sequence of the operations and the temperature in which they take place must be set up in a conceptually proper way. A balanced mixed approach poised to slow inflation in a considerable degree may not be reduced to a composition with 2-3-4 elements. It is a matrix of tools applied to a matrix of circumstances. It needs to make use of a number of various schools of economic thought which all would be wrong if taken alone because each of them one-sidedly operates in a restricted zone of regulatory power of respective fiscal and monetary, expectational and supply side, exchange rate and securities market instruments. In 1980 Professor Samuelson said he could not see any plausible application of his theoretical synthesis which had performed perfectly when he was an invited member of the Council of Economic Advisers. The theory was designed so that it could not be utilised in stagflation.

The above is to draw attention to an example of researchers’ self- reserve. As it has been mentioned their analysis like a software exists independently of its users. In way of self-reflection one may admit that it is independent also of the new suggestions made by the researchers themselves. If they try to apply their knowledge beyond its radius of action this amounts to assigning a job to a software which does not contain a related algorithm. To try to answer questions unanswerable because of lack of necessary information would mean the same. No one from outside the science is authorised to pass critical judgments on the views of the specialists. Self-reserve controls their assessment-making within the limits of their competence. And that is not just a moral question. As a scientist should mind the quality of a microscope which is placed between him or her and the investigated object, similarly an economist is obliged to be conscious of the relevance of available analytical tools.

This paper is not conceived so as to give a whole therapy. To try to do so would amount to the pretension that a proper diagnosis has already been done. Strategic schemas are indeed being built on this assumption which does not hold. The analytical phase attained so far is a pre-therapeutic one, i.e. that of diagnosis no matter how badly the economy would need a real cure. A relevant diagnosis often consists some elements of the treatment. The point of the above is that this should not be exaggerated. If it is then no matter how much one would like to be a doctor he may all right become the sickness itself.

2.6. Some features of a general diagnosis

It hardly needs to be said that circumstances in Central and Eastern Europe differ from whatever situations experienced before in the West. To draw attention to that Economics as a generalised understanding based on past situations is unable to cover this new one is not to underrate the significance of the tools of this science. What may be questioned is their direct applicability to a whole new situational matrix which does not fit into the system of assumptions of traditional economics as they are represented by neoclassical, keynesian-neokeynesian, monetarist, and neo- neoclassical schools.

It has been mentioned that East-European history has produced mutant societies /cf.1.8./ The mutants, inter alia, were antieconomical or noneconomical societies. Under the necessary impact of the past on the present this feature continues to exist well into the post-mutant stage of the nations in question. This scheme gives by no means an exhaustive picture but inasmuch as it is relevant one may ask if Economics can be applied to a non- economical situation. Assumptions on the state of affairs should  be made explicitly anyway. If the violation of behaviourial rules has been built into the cellular information system of the organism then the immediate cure must not concentrate on the application of these same rules because the governing principles of the organism had changed. The importance of the impact of deficit financing on investments, monetary aggregates on trade cycles, or taxes on supply side need no restating. But not any of the well-known cures making use of these cross-relations could have been conceived so as to be able to overcome the non-traditional disease of Central and Eastern Europe. This is demonstrated e.g. by the fact that the situation is neither Keynesian nor monetarist.

2.7. Non-Keynesian situation

Hungary is not in a keynesian recession situation where effective demand ought to be increased so as to reduce incompletely utilised capacities and manpower reserves. Certainly both of the latter exist but the nation is interested in further reducing inefficient capacities and therefore growing unemployment – however hated by everyone – should be tolerated. That even substantial unemployment benefits cost less than maintaining the production culture which existed up to now is not a relief for people who are to lose their jobs. But this cost-benefit explanation is just an emasculated rhetoric in this case. It is absolutely impossible to preserve the old structure. Therefore the recent state of the national economy calls for some more recession, not for the recession itself but in order to get rid of its uneconomic structural elements. The impact of relative wage and productivity level on the growth of unemployment which according to the actual shape of the Phillips- curve trades off with the price index is an essential determinant of macropolicy. In Hungary employment level was maintained in an artificial way and against any indications of the Phillips curve for a whole decade which amounted to compelling the national economy to support a situation which it could not afford. An inflation of significant speed has been going on for several years but unemployment has begun to grow by hundreds of thousands only in this year. Without inflation it could have reached even a third of the labour supply or more. Or else, without unemployment the price index could have approached a hundred per cents or more. Both would cause social unrest, nor the recent situation can last long.

There are two powerful economic exigencies which call for curbing the inflation. The first one is the long-term equilibrium of the balance of payments. In short term the price index trades off with the balance of payments. /cf.2.1./ More specifically, it exerts its impact through the trade balance. Payment problems resulted in accumulation of a heavy debt burden in time when inflation was relatively moderate. Recently the debt service absorbs a significant share of domestic savings. In 1989 and 1990 only the foreign income part of the debt service (interest payments) required more than 1600 millions of US dollars each year.// The savings can be transformed into foreign payments through the expansion of exports in general and net exports in particular. This is likely to boost inflation. The trade-off will work in a reverse way: while corroborating payments and debt situation it will add to the inflationary pressures. In other terms it will stimulate imports and slow down exports and result in worsening the trade balance situation.

The second one is the contrast of gallopping inflation with the long term interests of capital expansion, saving and accumulation. Efforts to involve more foreign capital into privatisation may come down to jejune rhetoric when elementary conditions of financial stability are lacking. Capital does not fear uncertainty or risk. But gallopping inflation generates an environment of unpredictability which is unbearable to business. Couragious risk- takers would go on with investments, but the bulk of medium-sized enterprises would rather stay off. Insofar as the crisis is multi-dimensional a multicausal approach to its treatment is indispensable. However the multitude of influencing factors should not be identified with a multitude of objectives of the operation. Factors are many, but, beyond 30% slowing down the inflation must be the objective in terms of macro- monetary policy. Beyond that speed the price expectations appear to have a propensity to remain positive, the price index can double the next year, treble in the second year and so on. Growth incentives of the inflation are switched off at this speed. Self- accelerating effects are switched on /cf.2.4./

2.8. Non-monetarist situation

It has been demonstrated that this recession is not a classical Keynesian one /cf.2.7./ A complementary suggestion is that excess money supply gives no enough ground to assess the situation as a whole as a classical Friedmanite one either. Here a simple terminological difference between monetarist and monetary applies. The former designates one school of economic thought while the latter the related elements of the market system and the macro-policy regulation.

Monetary policy should rely partially on monetarist measures because of the existence of the mentioned excess supply of money. In the eighties more purchasing power was created then required for circulation. Velocity of money circulation was influenced by money creation for deficit financing as against crediting. With growing trade balance deficits, money creation for the needs of net imports was based on growing foreign debts. In general, there was more
purchasing power than goods and services at actual prices. And there was more import than export.

Monetary regulation should have played an important role in reversing these inflationary pressures. But in the late eighties one-sided monetarist decisions were made on the base of an explicit strategy of monetary restriction. Thus not only the purchasing power but also the goods supply was reduced. Practically the measure amounted to restrictions in short-term crediting which had caused a liquidity crisis that halted immediately much of production and service before an agreement to stop the shock-therapy of money supply reduction was achieved.

The monetary policy was wrong at least in two respects. First, that some enterprises othervise efficient became abruptly insolvent. The second fault concerned inefficient ones which were surmised to ‘deserve’ insolvency. But the treatment of this problem was beyond the field of monetary policy. As a market function it could have been achieved by means of bankruptcy, takeovers, mergers, sanation,etc. Here monetary policy tried to take up tasks which fell outside its province. By weakening supply incentives it aggravated inflation.

Another problem is the restricted relevance of the monetarist approach itself. It can be questioned if there is such thing as a monetarist situation. If, as it is experienced in Hungary, a part of the money-diluting emission follows price increase then the latter did not come about as a consequence of increased money
supply. It could happen as a result of positive inflationary expectations. It might have been the consequence of tax increases, shortages of commodities, exchange rate evolutions, wage rise or a host of other factors.

Inflation itself with all the halfmeasures being taken against it at a high speed may become a factor of further inflation owing to its self-generating effects. /2.4.,2.7./Inflation not only restricts real purchasing power of buyers but also allocates more money with sellers, so that aggregate demand may continuously exceed supply and accelerate inflation itself. Nevertheless, to perceive it like a ‘causa sui’ would be equal to some mythical belief in its superhuman nature.


2.9. An appraisal

For the time being inflation remains the main evil of the internal economy. The record of the recent administration in dealing with this evil is unacceptable. Nor opposition programs contain any serious antiinflationary strategies. This issue has been practically excluded from debates because the opposition cannot promise any viable alternative. So it is not partisan politics that dominate the problem in question. Then what does? Must be the policies of specialised government agencies whose operations are claimed to be dictated by professional views.

National Bank representatives every now and then make statements to the effect that they follow a tight monetary policy. No doubt, they indeed try to do so according to their strategy. But tight money policy concerns mainly the private sector and interest rates on saving accounts and bonds remain well under consumer price index /cf.2.1./ while the latter is considerably higher than that of industrial sales. Industrial price index was 105, 115 and 121 % in l988, 1989 and 1990 respectively. Recently it is likely to speed up.

The rediscount rate of the central bank was respectively 10.5, 14.0 and 20%. /23/ These ones and short term refinancing rates werelinked to the slower growth of industrial prices. But they influenced saving interest rates which actually remained about 10% points below the price index. As a result, net Forint deposits of individuals diminished in real terms. Their nominal sum was 279 Bn HUF in 1988, 297 Bn HUF in 1989 and 360 Bn HUF in 1990. /24/

The fact of negative real interest rates on savings accounts and bonds while inflation is gallopping indicates a fault built in a crucial element of the regulatory system. Regulators and legislators alike are culpable for the situation, naturally,not in legal sense.

Is it not a pretentious claim to say that everybody is wrong but the author of this paper? Though the question is not relevant to the subject of the argument it may not be ignored. Many experts propound antiinflationary strategies. And a number of public executives share the same views. But the decision power rests with bodies the policy of which is unsatisfactory in this field. Other fields have not been analysed in this paper.

In a situation which is neither Keynesian nor Friedmanite monetarism is the underlying theory of Hungarian macroequilibrium policy while its practical behaviour is dominated by two opposite onesidednesses: a monetarist and an inflationary bias. Let us compare that with the British policy of eighties which had begun also from a monetarist strategic stance. The latter was subordinated to the main task of overcoming inflation. When it did not work it was abandoned mercilessly: further antiinflationary policy was conducted by thumb-rule and lost its monetarist character. In contrast to this Hungarian policy lost its antiinflationary character.

The British antiinflationary record while it may also be not quite satisfactory is uncomparably better than the Hungarian one (<5% as against >35% in 1991). When speaking of the price index one does not passes a judgment on the whole economic let alone political strategy. But how dares one compare so remote situations as that of Great Britain and Hungary? May it be noticed that situations are not being compared at all at this point. Inflation is the matter under review. Gallopping inflation should be checked in any situation. If it is not it will worsen any situation in any country.

The necessity to have a mixed approach does not mean that every mix is good. In this case the concrete system of measures is blamed not for its eclecticism but for its lack of impulses to curb positive price expectations. The definition of objectives is too wide in scope. It is claimed that besides stabilization efforts the monetary policy “should assist structural transformation, stimulate exports, the search for foreign markets…” /25/ All this appears to be too much at the recent speed of inflation the curbing of which represents the first condition for achieving any other economic and social goals. Monetary policy may promote a variety of aims not directly but through its recent specific task concerning the purchasing power of money. This task has to be supported by maintaining foreign solvency. The recent indication for any administration willing to invite more capital in, is to drive the excess money out.

Capital and Money in Hungary (2)

Capital and Money in Hungary  (continued)

My 1991 London paper as cited in 2014.11.27. 21:29 Minnesota

1.5. Financial capital in Eastern Europe

Everybody seems to agree on that Eastern Europe badly needs working capital imports but few analysts deal with the development of financial markets as their precondition. Financial markets are the realm of financial capital existing in interaction with working capital. Capital value expressed by stock prices is different from the reproduction and goodwill value of real assets. The ratio of stock exchange value and reproductory value is an important regulator of real investments. /12/ Generous tax exemptions and other measures have created incentives for working capital import into Hungary. Lack of normal telecommunication, bureaucracy and transitional risks create obstacles which can be counterbalanced only by seducing financial conditions.

Though Hungary boasts of the highest among newly emerging democracies speed of direct foreign investments the volume of their inflow is lagging behind the needs. The overruling of some takeovers already done somewhat worsened the whole climate for capital involvement. But securities markets remain all the time bearish owing to the high speed of inflation and not to some penniwise financial import policy measures. Financial markets are to be built up not only out of domestic savings which are poor but also by way of international capital involvement. Working capital imports are by no means the only alternative to growing indebtedness. Import of financial capital should be relied on to a much higher degree. This factor requires development of financial markets, which, for the beginning would not surely be ‘efficient’ ones. But if their regulation complies with business requirements exposure to foreign capital inflows might help them soon to attain a necessary degree of clearing power. So if policy-makers want to have efficient markets, first they should promote the development of any markets. And if they want to have more working capital imports they should create incentives also to non-working i.e. financial capital imports.

The above cannot be attained without letting all the national capital work and bring profits to the investors who should be able to reallocate their funds to business activities with expected higher returns. Financial markets are the most powerful instruments of capital reallocation. And corporate structure of industry and service /cf.1.2./ (cf. marks cross-references to this paper) is the most eminent purpose for their existence.

1.6. Corporations

In accordance with some earlier analyses in a 1981 public discussion this writer brought forward a proposal for transformation of state enterprises into corporations. A book in line with this idea in application to the then existing and now anachronistical situation was published in 1983 and its shorter English version in 1984. /13/ Some professional conclusions have been reproduced in quite a few economic documents of both the recent administration and its opposition. A system of business enterprises based on the functional division between owners and enterpreneurs was the gist of the proposed practice. The bearing of the risk that goes with investments was selected as a base of enterpreneurial gain or loss. Reducing of the state property and confining the state activities to macro-economic policy, a social safety-net, resarch-development and environmental issues were said to be preconditions for this type of business culture. The proposal offered a wide factor liberalisation program on the level of risk takers. If the managers were willing to pay higher wages they would have to withdraw funds from some other allocations, e.g. investments providing there was an adequate monetary policy. As regards capital involvement the managers were to attain the same wide range of autonomy as in production and employment decisions. The establishment of a bond and stock exchange was also propounded in 1981. The above was concluded by an initiative to establish a Bank of emission functioning independently of the government. Proposals on currency convertibility were made earlier.

The above mentioned strategy envisaged reducing the complex form of collective ownership by incorporation to the simple form of individual ownership. Thus state property might have attained a new character: it were to act in relation to other owners as a single individual. /Legal experts created a complementary theory to the effect that if the enterprizes are incorporated the state ceases to be an owner as an actor of public law. It can retain its holdings as a subject of private law./ Securities are the proper titles of ownership for profit oriented private owners. As any other owner the state is interested in dividends, bonds and shares prices, yields, etc. This sector may be significant in Central and Eastern Europe, where, apart from some other reasons, due to constraints to domestic purchasing power and limited foreign interest in real investments the state will remain a largest owner of assets in some industries for a long time to come. The strategy propounded in the early eighties /see above/ included practical suggestions on the issue. The majority of corporations would belong to portfolio firms and investment banks with the controlling package of them remaining in some cases with government institutions within a stepwise system of participation. This pattern cannot give an overall solution to the problem of state enterprises. It can be efficient only in the framework of extensive business relations as their partial but not dominating sector.

The privatisation of a considerable part of the state property remains an exigency. As it appears against the background of specific circumstances it is distinct from its theoretical model. To take it in the only context of abstract theory when arguing for or against a given decision in a given country would not be quite appropriate. An explicitly theoretical line of thought will be referred to under the next subheading.

1.7. Privatisation

Although no limitations to privatisation can be found in neoclassical theory /14/ no exclusive importance to property issues is attributed either. As evidenced by international comparisons the relative efficiency of public as against private ownership depends on a variety of factors, incl. the efficacy of capital market monitoring, the way of the public decision-making and the managerial market. /15/

Profit maximisation is considered as an ultima ratio of decisions concerning privatisation. In contrast to this ultima ratio there is strong evidence for that firms deviate from strict neo-classical behaviour viewn as short-run profit maximisation. That is explained partially by game theory and neo-institutional theory. /16/ In capital theory the wealth-preserving function is no less important so that what used to be considered as a single motivation is broken down /with respect to profit flows and capital stocks/ into profit maximisation and risk diversity maximisation /cf.1.4./ This ramification applies also to the above issue. It is not meant to define the exact boundaries of remaining state property but gives it a capital-orientation. Apart from public goods and providing externalia for the private business the remainder of the state property itself should function in a businesslike way represented not only by profits but also by capital gains.

The dilemma of state versus private would be oversimplified without a historical reflection. According to the analysis of economic backwardness from a historic perspective made by A.Gerschenkron in Western Europe individual private capital, in the East the state and in some other, mainly central regions business banks were the engine of accumulation and industrialisation. Banks represent private but as typical not individual capital. Although not any typology is of exclusive validity this one seems to apply with some necessary modifications. When individual capital is weak and state capital slopes downward, financial mediators /and not only banks/ may acquire a considerable place in ownership and redistributive relations.

That role of state which is predicted to remain more important than in Western countries can also be performed by way of public participation in bank ownership. Mixed ownership is another option in addition to privatisation or nationalisation.

Even in some most developed countries there is a link between crediting and ownership. A good part of firms relies on the same bank in every respect. A work quoted above /16/ has proved on grounds of Swedish evidence that a bank that is a principal creditor of a firm is likely to become its main supporter also in bond issuance and ownership contracts. Antitrust or general antimonopolistic regulation prohibits only the excesses in this relations. Long-term principal bank relations are associated with high rates of technical progress for example in Japan where firms rely to much less extent on equity capital then the American ones. Comparisons between France and Great-Britain /15/ show somewhat similar differences.

In Central and Eastern Europe the speed of privatisation relates also to specific circumstances of countries in question which pertains to the multidisciplinary theory of transformation.

1.8. Process of transformation

In Central and Eastern Europe several types of changes are going on. Systemic changes represent one type. Under the heading of another type is a secular evolutionary process of modernization including moving away from peripherical situations,from authoritarian rule that was in existence well before it flourished in one-party states. Some Weberian secularisation aspects of modernisation were even forcefully promoted. But the Luhmanian requirement regarding the economy as a functionally autonomous social subsystem was not lived up to. This is regarded even a more general failure than the one embodied in distorted ownership relations./17/

The third type of change is connected with achieving high technological standards, developing postindustrial features of a modern society based on information. One has to bear in mind the new quality of capital briefly referred to /cf.1.1./. It has been unrecognisably different from its previous untransformed versions. The modus operandi has preserved its essential nature but in the context of a new social organism. Its important regeneration in a century and especially in the last fifty years gives a powerful impetus to the development of this social pattern also in other parts of the world. As a consequence, the appeal of capital is to be taken in account as the environment of transformation of the Eastern half of Europe.

A fourth type is represented by the swift restructuring of the whole world: the international aspect which, in the highly sensitive European space comprises many new security problems. Even apart from them this continent is going to acquire a new identity. The E.C. membership may double in ten years. With the republics of former Eastern federal states it may treble within some years after the end of the millenium.

The fifth type of change is the worsening standard of life that is not unnaturely a most sensitive and dangerous issue. It began in the early eighties /in Hungary/. It is the background of social and political upheavals in Eastern Europe.

These processes interact. They have prompt, short run and long-range sequential layers which also intermingle. These inter-temporal, inter-spatial, and inter-dimensional cross-relations are not to be forgotten when one thinks of the specifics of each process. Change always supposes also continuity even if they combine differently in dramatic and epic phases. Continuity does not relate to everything: there are vectors that must cease to exist. The ‘command’ systemic vector belongs here in our time.

East-European history has produced a type of mutant societies which, in some crucial aspects, are not related to the same classificational dimension as the ‘feudal’ or ‘capitalist’ ones are. Particularly, in feudal times an antiintelectual establishment was not anachronistic like the one in the XX-th century. The animal-farm tale has been supplemented by new actors. The policies of the rhinoceros-like nomenclatura most perfectly personified by some soviet leaders of the seventies and eighties sometimes looked like a purposeful attempt to prove the historical inadequacy of the whole setup.

Mutation notwithstanding the past is not described exhaustively by it. The life of nations was richer than that. One cannot state that in 40 or 70 years of a nation’s life everything was evil. A mutant developmental path was not unrelated to its previous history even if it may not be explained away by earlier events. Analysis includes efforts to avoid biases of ideological thinking in terms of absolute priorities. The market system is better in comparison with the command one but there is no such thing as a perfect system. Nor the market can function without some public regulation. Pure systems anyway exist only in abstraction. In reality they always combine. Market does not combine with the command system but with regulating impulses coming from outside of it.

Politicians as against researchers incl. political scientists sometimes identify the transition to a new system with any important issues on agenda. Systemic dimension, however crucial, is not the only one. It cannot explain such simple things as different economic performance across European country borders, not to mention the Japan phenomenon. An exclusively systemic approach reflects a European way of thinking. For a major part of the world underdevelopment and starvation remain the first problem. From that some ‘command appeal’ emerges and remains in existence whenever the populace can be convinced that there is more food under dictatorship. If there is neither food nor democracy nothing remains of this belief. Command society eliminated, other dimensions or vectors continue, no matter how one likes them. For example, nationalism. But economists should warn first of all against miserable material conditions. Ethnic violence is linked not only to cultural traditions. Well to do people rarely have propensity to kill each other on grounds of ethnic diversity.

By social transformation we mean an extremal in its complexity historic matrix. From this angle the systemic change proper is but a part of a whole and, consequently, should not substitute for the whole.

1.9. A compensation problem.

The texture of national organism emerging from history determines also the social and economic contents of business culture and its implications on the speed of privatization. /cf.1.6./ Systemic transition, being a part of a whole /cf.1.8/, nevertheless is a complex issue in itself and is a deeper qualitative change than the one under way in Western societies. It is more extensive and intensive than any process of deregulation in market economies. The former include such a wide factor liberalisation as to allow the general transformation of property relations. In the field of capital movements the changes also exceed the problem of deregulation in a market economy, for deregulation is not as same as the development of financial market itself. Complexities of the situation may be demonstrated on the evidence of financial problems of denationalisation.

In Hungarian experience the revenue from privatisation is directed to the paying off state debt which is approximately 21 billion dollars or 1300 billion forints (1990 data). Some schemas of privatization credits were implemented. Refraining from the detailed examination of this process the compensation which is paid to former private owners instead of reprivatisation should be mentioned as a particularly sensitive issue linked to it.

Compensation is being paid in form of securities, it can be used for the purchase of new property. /19/ It limits state revenues from privatisation and somewhat slows down the above mentioned
paying off of the state debt. The opposition holds the view that all this is equal to diluting money because the securities can be sold while the government states that the measure does not touch upon macroeconomic equilibrium.

Both are in the wrong. The measure does not involve additional money supply or slow down economic growth which is slow /negative/ anyway. It is not a direct inflationary move. But it dilutes securities in the sense that for the same assets the state will be paid less money, because a part
of the securities will not be sold but distributed in the form of compensation. By limiting state revenues future equilibrium efforts may be weekened. To minimise this danger the compensation is gradualised in time, it will take about five years or more, owing to which it is not the compensation that will reduce the purchasing power of money but the diminishing of the latter will reduce the real sum of the compensation. The matter will boil down to a symbolic political gesture. But this is beyond the concern of economic researchers.

Vatikán és Porta

italo|2006. máj. 7.
A huszadik század elején Magyarország területének egy részét, közvetve a Vatikán birtokolta,  jóllehet más jelleggel, mint amikor a néhai Porta helytartói uraltak bizonyos földtesteket.  Itt  keresztény központ befolyása érvényesült, nem pedig egy muzulmán  hódító hatalma.
Az újabb külső befolyást közvetítette a Vatikánnak alárendelt egyház, amely több mint fél millió hektár mezõgazdasági terület gazdája volt. Az innen származó jövedelmet használták a világnézeti hegemónia szilárdítására, a belpolitikai hatalmi pozíciók kiterjesztésére. Ezzel azt a korabeli társadalmi rendet is erõsitették, amelynek egyik legfõbb  tartóoszlopa ez a vallási intézmény volt. A jövedelemnek viszont csak egy kisebb része áramlott a világegyház központjába (szemben a török deftar-ral, amire teljes egészében igényt tartott az a birodalom. A haradzs ott is inkább helyi célokat szolgált.)

A húszas években a mamutbirtokok a fõpapi társadalmi csoportnak az akkori  jómódú ember számára is elképzelhetetlen gazdagságot biztosítottak. Az érsekségek aulája (udvartartása) például átlagosan 500 embert foglalkoztatott, akiknek nagyobb részét a hivatalos iratok szolgáknak nevezték, aminthogy azok  is voltak

A rövidség kedvéért most az érseki birtokokhoz a területükhöz tartozó székesfõkáptalanok földjét is hozzáteszem.  A püspökségi birtokokat is az adott terület káptalani földjeivel együtt említem. 1928-ban nagyságra a következõk emelkedtek ki a Püspökkari konferenciák jegyzõkönyvei szerint. (Hektárban:) Egri érsekség :72800 , Esztergomi érsekség:  29800, Gyõri püspökség: 11000, Kalocsai érsekség: 36900, Pécsi püspökség: 18000, Veszprémi püspökség: 41800.

Ezeket a birtokokat is meg kellett szerezni és gyarapítani. A szerzésvágy itt nem kapitalista jellegû. A vatikáni alárendeltségû egyház valójában inkább félfeudális birtokos volt Magyarországon. Ebben a mûfajban a legnagyobb. A kétkezi dolgozó emberek ezeken a nagybirtokokon is cseléd, sommás, részes (olykor zsellér)  státuszban voltak.

Azóta nagyot változott a helyzet. Hogy ennek képébe itt ne keverjük bele az 1945 utáni magyar torzulásokat, tekintsünk ki a világba. Amire a Porta  nem lett volna képes, a Vatikán hálózata a megelőző évszázad alatt fokozatosan egy multinacionális üzleti vállalkozást is kifejlesztett önmagában. Ott, ahol a feudális jellegû birtoklást nem lehetett megõrizni, gazdálkodásában egyfajta üzletelési és ennyiben polgári forradalmat hajtott végre.

Üzleties szellemben és az ehhez szükséges, de a  hatalmi játszmákban már régen elsajátított titoktartás mellett mûködteti kiterjedt pénzügyi érdekeltségeit, mint egykor a Szentlélek bankot, ami annak botránya kapcsán került a felszinre. Kapitalista jellegû üzleti vállalkozás volt ama ingatlanegyüttes  birtoklása és hasznosítása is, amelyen aztán egy másik – a Vatikánnal össze nem függõ – botrány előtt   túladtak. Azt az épületegyüttest Washingtonban Watergate komplexumnak nevezik.

Észak-Amerikában egyébként is sokmilliárdos ingatlantulajdonuk van, vagy részben csak volt, mert a pénzügyi csõdhelyzetek miatt a vagyon egy nagy hányadától meg kellett válniuk. Ez egy harmadik fajta botrány, helyesebben botránysorozat miatt történt. A diszkréciót természetesen itt is a végsõkig igyekeztek megõrizni. De a polgári bíróságok kolosszális mértékû kártérítéseket ítéltek meg a kiskorúak sérelmére elkövetett régebbi bûncselekmények miatt.

Zuschlág. Vita



Eddig 24 komment érkezett ()

1. evianna (látogató) 2007. 09. 21. 23:36

 másutt is bajok vannak, itt pl. ez a postabélyegnyi ablak.
persze, jó lenne a megtisztulás, de nem nagyon hiszek benne. ráadásul az elévülés miatt a Pista ugyanazért nem kap semmit, amiért a Jóskát leültetik? hát milyen tisztázás az és milyen tisztulás lehetne az? akik “már akkor is…” loptak, azok maradnak, az újaknak meg hess a húsosfazéktól?szerintem Zuschlag bizonyos értelemben egy második Tocsik lesz vagy lehet.

2. italo (szerkesztő)  2007. 09. 22. 0:09

ablak :DD
A rossz struktúrától egy választási vereség is segíthet megszabadulni. Nem tölt el rajongással ez a szcenárió. De akkor egy új formáció jönne létre. Egy ideig minden új kocsma szép és jó. Azután mindegyik lezüllik. 🙂

3. basatu  2007. 09. 22. 0:25

 Jó helyen kapisgálsz,de a mélységig nem jutottál
el.Ez a párt azonkivül
hogy elhalgattata
belső kritikusait és megrostálta ujitó szándékú hiveit mélyen korupptá vált.A nyilvánvaló bizonyított hibákat eltusolni igyekszik és saját sirját ássa.A bukását nem az ellenzék hanem saját maguk idézik elő .4. italo (szerkesztő)  2007. 09. 22. 0:40
a mélységeket valóban nem ismerem. A hibák eltussolása szerintem is kontraproduktív. Ami a lehetséges bukást illeti, a Boross kormány, meg az Orbán kormány is jórészt maga idézte elő a bukását.5. lord (látogató) 2007. 09. 22. 6:44
 Kedves italo !
Nem hiszem, hogy a szocialisták korábbi győzelmei az ellenfelei kommunikációs hibáiból, a kádár-izmus nosztalgiájából keletkezett volna. Inkább abból, hogy az embereknek elegük volt a horthy-izmusból, megérezték, hogy az erőszak-, a fasiszta eszmék hordozói itt vannak közöttünk és feltehetően nem kértek az újraéledő, de többek között divattá vált vallási fanatizmusból sem.
Ami pedig Zuschlagot illeti: ahol fény van, ott árnyék is. Nyilvánvaló, hogy az ellenzék „kommunikációja” most kihasználja majd ezt az ügyet. És mindenféle „magyarázatot” keres és talál a saját szája íze szerint. Bizonyos, hogy az MSZP-nek szüksége volt és van is fiatal, feltörekvő, agilis személyekre, akik között – mint Zuschlag és társai esete is mutatja – szemét is akad. Szerintem Zuschlag arroganciája – önként nem függeszti fel párttagságát, szerencsétlen zsidókkal kapcsolatos „elszólása” – számomra egy erkölcsileg romlott embert tételez fel. Sajnálatos, hogy ezt – feltehetően – az „aktivitása” elrejtette és környezete nem észlelte. Nem hiszem, hogy ebből az ügyből az MSZP egészére túl messzemenő következtetéseket lehetne levonni, ugyanakkor természetszerűen felfedődhet több személyi konzekvencia.

6. lord  2007. 09. 22. 6:47

 Elnézést, de úgy látszik az előző hozzászólásomnál nem jelen t meg a fizimiskám. Mivel erre “kényes” vagyok, most pótolom.

7. italo (látogató)  2007. 09. 22. 9:39

 Szívesen látom a fizimiskádat.
 öröm látni, hogy egyezik a véleményünk:)

Homlokpuszi Neked izomagyú !9. italo (látogató)  2007. 09. 22. 15:32
 Kedves lord,
nem hiszed, “hogy a szocialisták korábbi győzelmei az ellenfelei kommunikációs hibáiból, a kádár-izmus nosztalgiájából” keletkeztek volna. Szerintem sok tényező játszott szerepet. Én a saját vezetőik jó taktikáját tettem az első helyre. Értve ezen , hogy pl.Horn azt a demokratikus politikát képviselte, amit a többség kívánt. Antall pedig nem tudta idejekorán elhihetővé tenni, hogy nem a horthyzmust kívánja vissza. Későn szakított Csurkával, amikor az utóbbi náci szellemiségű pamfletet írt.10. italo (látogató)  2007. 09. 23. 0:15
 A szocik vezető rétege egykor eredményesen politizált, de eljárt felette az idő.Eléggé szürke funkcionáriusokból áll. Gy.F. elleni kritikai megnyilvánulásaik önvédelmi reakcióik is mozgatják. Ami nem azt jelenti, hogy birka módjára helyeselniük kellene elnökük minden ténykedését.
11. italo (látogató) 2007. 09. 23. 0:17

*megnyilvánulásaikat12. italo (látogató)  2007. 09. 24. 21:33
 lord véleménye: “Nem hiszem, hogy ebből az ügyből az MSZP egészére túl messzemenő következtetéseket lehetne levonni…”
Én sem hiszem, ezért véltem úgy, hogy az ügy nem látszik nagy horderejűnek. Azt állítottam, hogy *alkalmat* kínálhat saját helyzetük értékelésére.13. izomagyu  2007. 09. 24. 21:43
 attól is függ, hogy kiket fog érinteni a súlya, és ha nagyon sokakat, vagy magasban is, akkor mint kezelik le
14. italo (szerkesztő)  2007. 09. 24. 21:47
 italó sikertelenűl próbálod elbagatelizálni a dolgot.Ebben az ügyben benne van az egész MSZP,az űgy gyurcsánytól és Szilvásytól indul.Az ilyen és az ehez hasonló ügyek jellemzik ezt a pártot.Nézd a médiát nincs olyan hét amikor ne pattanna ki valamilyen korrupciós botrány.ha igazi bulvár lapok lennének itt nálunk akkor már ezeken a kormánypártokon már a szőröket is megszámolták volna.hát ennyit a piti dolgokról.
16. italo (szerkesztő)  2007. 09. 25. 11:18
A konkrét ügyről nem mondtam semmit, tehát nem is bagatellizáltam semmit. Ami általában a korrupció jelenségét illeti:csak egyidejüleg lehetne megítélni az MSzP és a Fidesz berkein belüli ilyen jelenségeket. Az elfogult egyoldalú emlegetés nem az én dolgom, hanem a pártagitátoroké. Viszont felülről sem nézem és ítélem meg általában a pártokat, nem vagyok én köztársasági elnök.17. basatu  2007. 09. 25. 11:37
 italó Az elmúlt hat évben a kormánymánypártok annyi korrupciós ügyet termeltek ami párját ritkitja a
világon.Mellesleg nem a FIDESZ kormányoz,maga fletó is egy sötét figura ezen a területen.Gondolj bele hogy hány ilyen politikus van hivatalba a világon mint fletó
aki ennyi szennyes ügy érintetje
vagy résztvevője volt és akkor öszödöt még nem is említettem.Ebbe a dologba beírni az ország első emberét kissé gusztustalan.18. italo (szerkesztő)  2007. 09. 25. 12:48
 Nem. Kissé sem gusztustalan. Nem a korrupciós dologba írtam bele, hanem abba, hogy felülről nézi a pártokat. A korrupciókról, bizonyítás nélkül csupa általános véleményt mondasz.(pl.: “párját ritkítja a világon.”) Ezekkel a véleményeiddel szemben állnak a Fideszt hibáztató vélemények. Bizonyító ereje csak a tényállásnnak van, azt pedig nem az agitátorok állapítják meg. A ténymegállapítás bírósági hatáskör.
 italo Fletót cégügyeiben a bíróság felmentette elévülés miatt,az alapítvány ügyet titkosították,az általad említett dologban folyik az eljárás —még nem titkosították,az olajügyben más aspektusban de érintett.akkor miféle bizonyítékokra vágyol?Te ezeket a kérdéseket kirántottad a zsebedből mint Kóka az egy millás számlát ami ugye ugyanaz pepitában.Valami érvet kellett volna mondanod.Az ország első embere felette áll a pártoknak és nyilvánvaló hogy úgy politizál.Mellesleg nincs úgyszólván semmi hatalom a kezében.
20. Csillagjáró (látogató) 2007. 09. 25. 13:14
 Húha, nem igazán értem kedves basatu kinek nincs a kezében hatalom?
nemigazán értem a kérdésedet a
köztársasági elnökkel kapcsolatban.22. italo (látogató)  2007. 09. 25. 13:26
 Nem tettem fel kérdéseket, amikre azt lehetne mondani, hogy kirántottam őket a zsebemből. Mivel ez nem igaz, az meg pláne nem igaz, hogy ugyanaz pepitában, mint az egy millás számla. Én elfogadom a bírósági rendszert.Aki nem fogadja el, az ne velem vitatkozzon. hiba nélküli rendszer viszont nincs. Hiba nélküli elnök sincs.
 És hiba nélküli blogger sincs……
24. italo (szerkesztő)  2007. 09. 25. 16:13
 Mint ahogyan hiba nélküli hozzászólás sincs.Ha ebben is eljutottunk az egyetértésig, a vitához hozzátehetek még egy észrevételt. A bejegyzés egy politikai alakulat mélyebb strukturális problémáiról szólt. Az országnak gazdasági, szociális, kultúrális területeken számtalan gondja van. Ellenzem azokat a törekvéseket, amelyek a sokrétűségében változó társadalom konfliktusait egy-egy személy támogatására, vagy eltávolítására leszűkített akcióval, a gordiusi csomó átvágásának módjára próbálnák megoldani.

A Forint megszüntetése

italo|2009. febr. 28.

Valutánkkal együtt meg fog szűnni még néhány hazai tünemény.

Az áruforgalom közvetítése belső fizetőeszközzel.

Az állam, a lakosság és a cégek forinthitel-felvétele.

A forinthitel és a devizahitel alternatívája.

A hazai pénzkibocsátás.

A forintinfláció.

A magyar kamatpolitika.

A külső fizetési mérleg és a belső egyensúly szembenállása.

Költségvetési hiányok manipulálása a fentiekkel.

Forintárfolyam, mint kalkulációs és spekulatív tényező.

Az árfolyamkockázat hatása a tőke mozgásaira.


A felsorolt tíz elemből álló komplexum működése tette lehetővé a hazai pénzügyi egyensúly tartós megbomlását. Országunk élt ezzel a negatív lehetőséggel. Ennek befellegzik a forint megszűnésével. A belső egyensúlyhiány helyett több figyelem juthat más bajaink orvoslására.

Az eddig kapott külső segítség elegendő időt adhat az átmenet tevékeny előkészítésére és végrehajtására. Élnünk kell ezzel a pozitív lehetőséggel, mert élnünk kell.

A magyar nyugdíj és eü. alapok pénzforgalma áprilisban

italo2009. máj. 30.

A társadalombiztosítási alapok bevételei, kerekítve, egyszerűsítve:

Saját bevételek: 260 mrd .Ft. (Ebből 244 mrd. járulékokból)

Központi hozzájárulás: 60 mrd. Ft.

Számítási korrekcióm: 12 mrd. Ft.

Összesen: 332 mrd. Ft.

Kiadások, kerekítve, egyszerűsítve:

Nyugdíjak: 230 mrd. Ft

Pénzbeni ellátások 21 mrd. Ft. (gyes, gyed, táppénz)

Természetbeni ellátások: 131 mrd. Ft.(eü. ellátás, gyógyszer, stb.)

Számítási korrekcióm: 6 mrd.Ft.

Összesen: 388 mrd. Ft.

Hiány: 56 mrd. Ft.

A két “Összesen” sor felett a forrásom (PM) nem közölt néhány kisebb tételt és számítási módosítást, így csak az én apró korrekcióimmal jönnek ki a Bevételek és a Kiadások összegei.
Másik mozzanata ugyanennek a számításnak, hogy itt az áprilisban ténylegesen teljesített bevételekről és kiadásokról van szó. Ami ezen felül járna a TB-nek és amit még fizetnie kellene, az hiányzik. Vagyis az adott hónapban keletkezett rövid távú tartozások és kinnlevőségek, pl. úton lévő összegek.

Ha az általam itt követett leegyszerűsítő módon 12-vel szorozzuk meg az egyik bevételi adatot, azt kapjuk, hogy a központi költségvetésnek 720 milliárddal kellene támogatnia a tb. alapokat ebben az évben. A rendkívüli hiányokra ezen felül, esetenként külön döntésekkel nyújtanak fedezetet. Az állam központi költségvetése lényegében adókból finanszírozza ezt a nagyjából ezer milliárdos támogatást. Ez a hiánynövelő tétel akkor válna feleslegessé, ha a járulékokból a tb. kassza önfenntartó lenne, ami ma irreális feltételezés. A reális veszélyt a demográfiai és egyéb, nem döntések alapján, hanem automatikusan bekövetkező eltolódások jelentik, melyek miatt a tb. kassza egyre több támogatást igényel és irányzata szerint a központi költségvetés egyre nagyobb hányadát vonja el.

Ha a kiadási tételeket sorra megfigyeljük, kiderül, hogy a jelenleg elfogadott változások milyen módon korlátozhatják hosszabb távon a tb. alapok terhelésének emelkedését. Arra is választ ad ez, hogy a központi kormányzati költségvetésből a tb-nek juttatott támogatás dinamikája miként lassulhat. Aminek az a rendeltetése, hogy enyhítse a gazdasági szféra adóterhelését s ezzel jobb feltételeket teremtsen a vállalkozási tevékenységnek.

(Az első nyolcat közlöm )
1. néma (látogató)  2009. 05. 30. 7:59

Akkor van egy bukfenc mert ez így “alkotmányos”!:DDD

2. Hmmmm  2009. 05. 30. 8:23

 nehéz, nagyon nehéz téma.

mert ugyan szinte azonnal megkezdődött a téeszföldek és a gyárak, vállalatok magánosítása, de a “nyugdíj- és eü. alapok”, persze beleértem a támogatási rendszert is, az nem.
a szocializmus központi leosztórendszere változatlan maradt, nagyon kicsi változtatásokkal.

ma még 10 év szolgálati idő mellett 33 %-os, és 40 év szolgálati idővel 80 %-os nyugdíjhoz lehet jutni, ami teljes egészében állami.
2013-tól (jelenlegi állás szerint) 10-ről 20 évre emelkedik és 40 év után 66%-ra csökken azok nyugdíja, akik kizárólag az állami nyugdíjpénztár felé fizettek.
tehát durván számítva 47 év ledolgozás után érhetik el a továbbdolgozási ösztönzővel a 80 százalékot.
akik viszont magánynyugdíj pénztárba is fizettek, azoknak az állami nyugdíjuk 40 év után 48,8 százalékra csökken.
2013. január 1-től.

és akkor lehet egy picit gondolkodni az euró árfolyamán, meg azon, hogy a tavalyi magánpénztári befizetéseket durva számítás szerint elvitte a válság.
mi lesz a nyugdíjasokkal az euró bevezetésével, meg egyáltalán 2013-tól, na ez még 3 és fél év zenéje.

3. evianna   2009. 05. 30. 8:45

 reform volt a tb vonatkozásában már 1993-ban (önkormányzatok), csak 1998-ban szűntek meg (visszaállamosítás= 1999 óta a járulékokat az apeh szedi be)

a nagyobb baj az, hogy a tb jövedelmező része (magánpénztárak, mind eü, mind nyugdíj) viszont teljes egészében és érdemleges ellenőrzés nélkül átkerült az üzleti világba, és a bankok, biztosítók egyik üzletága lett – érdemleges állami befolyásolás vagy ellenőrzés nélkül.

hozzáteszem, hogy a sokat emlegetett demográfia helyett az egyenlegek alakulására szerintem sokkal nagyobb hatással voltak
1. az ügyeskedések (a sokat emlegetett rokkant nyugdíj, a sokkal kevésbé emlegetett “munkanélküliség helyett táppénz” konstrukció, 6 hónapig, a cégként befizetett járulékok adómentes kivétele magáncélokra, amire a járulékplafonok bevezetése előtt bőven volt lehetőség) illetve
2. a foglalkoztatás csökkenése és a minimálbéren bejelentett vállalkozók és alkalmazottak számának brutális megnövekedése.

ezeknek a lehetőségeknek a nagy részét az állam lassacskán rendre visszavágta, ami 2013 után valamennyire szépíteni fogja a képet.
ami viszont nagyon elcsúfítja majd, az a tb “piackonform” része lesz: nincs ember, aki megmondaná, milyen ellátásra számíthatnak a magánpénztári tagok.

4. Hmmmm  2009. 05. 30. 9:16

ha reformról beszélünk, akkor 1998. január 1-el lépett hatályba, ami három pilléressé tette a nyugdíjrendszert.
ebből 2 pillér az idő rövidsége, és egyéb más okok miatt nem az elvárható szerint működik.
a további megrázkódtatást az euró bevezetése fogja okozni.
de bajok lesznek az államival is, mert egyre kevesebb pénz fog befolyni.
ennek oka lesz, hogy egyre több tanult fiatal ismeri föl, tervezhető és megvalósítható jövőjük belátható időn belül csak külföldön lehetséges.

5. italo (szerkesztő)  2009. 05. 30. 10:16

 Néma, igaz, ami igaz, az alkotmányok változása mindig késve követi a gazdasági szerkezet átalakulását, de azonos alaptörvény keretein belül is többféle ellátási gyakorlat lehetséges.
6. italo (szerkesztő)  2009. 05. 30. 10:29
 Hmmm 08:23, “ugyan szinte azonnal megkezdődött a téeszföldek és a gyárak, vállalatok magánosítása, de a “nyugdíj- és eü. alapok”, persze beleértem a támogatási rendszert is, az nem” – Ez a probléma egyik gyökere.

Ehhez kapcsolódik a másik: ha már a többség magánszektori alkalmazott, akkor az ő nyugdíjukat miért az állam fizesse? Ebből kiveszem a régi nyugdíjasokat, akik az államnak dolgoztak, vagy később is joggal így voltak kezelve. A szétválasztás nehéz, de nem lehetetlen. A nyugellátás tényleges értékvesztéséről és bizonytalanságairól is képet adtál.

7. italo (szerkesztő)  2009. 05. 30. 10:56

 Evianna: “érdemleges állami befolyásolás vagy ellenőrzés nélkül.” – Szerintem is ez a baj.

“hozzáteszem, hogy a sokat emlegetett demográfia helyett az egyenlegek alakulására szerintem sokkal nagyobb hatással voltak ” (felsoroltad a tényezőket. Mindez igaz.) – A demográfia európai problémája azonban nálunk az európainál sokkal kisebb foglalkoztatással karöltve súlyosítja a gondokat. Megjegyzem, a foglalkoztatás nem a válság miatt alacsonyabb, az volt a rendszerváltás óta. A magángazdaság nem szívta vissza az államgazdaság leépülése nyomán fölössé vált munkaerő egy részét. Ezért sem egyszerű az ellátó rendszert magánosítani, mert embertömegek pénzkereső tevékenysége jórészt nem a látható magánszférában történt. A láthatóság fokozása kulcsfeladattá nőtte ki magát. Az ügyeskedési lehetőségeket valóban vissza kellett vágni, ami, mint írod, lassacskán megtörtént. Még kell majd nyesegetni.
A magánpénztári nyugdíj is tükrözi az általános gondot, amikor azt hisszük, hogy az állam helyetti szereplő működése nem hordoz legalább annyi konfliktust, mint az államé.

8. italo (szerkesztő)  2009. 05. 30. 11:02

 Hmmm 09:16, az euró bevezetése valóban okozhat bajokat. Az árfolyam, ha ilyen marad, részben előre hozta ezeket, mivel a közös valutára való áttérés főképpen az átváltási arány miatt okozhatott volna sokkot. A sokkot már most megkaptuk és főleg az érintettek (hitelesek, magánynyugdíjasok) érzik.