We're Not Impressed by Your Package, Sir

BUDAPEST, June 12 – In what may go down as one of the most pathetic episodes in the recent history of global finance, the Hungarian government has attempted to forestall growing panic over the country's massive fiscal deficit with a "reform" package light on budget cuts and heavy on productivity-crushing tax increases. The package, announced on Saturday morning while everyone was (hopefully) sleeping off the first night of World Cup revelries, left observers scratching their heads wondering what the fuck Prime Minister Ferenc Gyurcsány and his cabinet could possibly be thinking, and send the Hungarian forint and the local stock market plunging during Monday trading.

Strategy: Strangle the Golden Goose
While most economists had assumed that the government would try to reign in the public spending that has left the Hungary vying with Belarus for the honor of being the region's most pointlessly over-regulated state, it instead said it would largely maintain the status quo, under which the poor suckers trapped here are basically required to check with three ministries and pay eight different taxes before taking a dump.

Meanwhile, the government's plan to narrow the eye-popping deficit - which despite its endless promises, now looks set to approach 10% of Gross Domestic Product - mostly consists of hiking taxes on the few people and companies in the country not depending on the state for handouts. In addition to raising corporate taxes and the VAT on some goods, it will impose a new 4% "solidarity" tax on "successful" individuals and businesses, by which one must assume they mean foreigners and others without valid Socialist Party membership cards.

In late afternoon trading, the forint had slipped to roughly 268/€ while the benchmark BUX index of the Budapest stock exchange was trading down almost 4%.