for getting Greece off the front pages. It was nice for a while,
but being on the receiving end of so much negative publicity
is not good for our tourism sector, and that's all we've got left.
So, thank you to Hungary, and it's new fascist PM.
I'll tell you why he's clamping down on everybody
in Hungary. It's because they're horribly in debt
and the media will be roasting him as he tries
to wiggle out of the mess he's in.
As Karl Denninger says below, the guy's wise to
ignore the EU who are complaining about his
new laws. Well, if the EU doesn't like it,
Hungary can just default, unlike Greece, a country
kept alive only as a freak show.
checkitout:
Denninger Hungary: Erect The Finger
You know you want to....
The European Commission has launched legal action against Hungary's Fidesz government for violations of European Union treaty law and erosion of democracy, marking a dramatic escalation in the war of words with the EU's enfant terrible.
Capital Economics said Hungary must repay €5.9bn (£4.9bn) in EU-IMF loans and raise external funds equal to 18pc of GDP this year, the highest in Eastern Europe. Two-thirds of household debt is in Swiss francs, leading to a lethal currency mismatch as capital flight weakens the forint.
"Hungary is playing with fire," said Lars Christensen from Danske Bank. "The EU is not bluffing. It will let Hungary go over the edge to make the point that EU countries must play by the rules. Our worry is that Hungary's government has not yet got the message."
Whah whah whah whah.
Ambrose: Wake the hell up you idiot!
ALL lending to a sovereign is unsecured. You're lending to a government predicated on one -- and only one -- premise: Their willingness and ability to extract from the economy, via taxes, the money you loan them.
Note the two parts: Willingness and ability.
If either is missing you don't get paid. Period.
Also note that the lender has complete control in this regard when they make the loan. The lender is capable of saying no. And the borrower can, if they choose to default, restrict their spending to that which they are willing and able to tax, immediately balancing their budget and eliminating their need to borrow at the same time!
This makes threats to cut off continued lending rather hollow provided that the government in question is willing to restrict their budget to that which they can tax.
Not-incidentally, restricting the budget to that which you can tax is the definition of fiscal prudence. So a nation that tells the EU to get stuffed does two things at once -- it tells the jackbooted jackasses to get lost and at the same time fixes its fiscal problems.
Let's see it -- and may those that Ambrose believes should be "protected" from the price of their follies find out that they're both wrong and broke.
