Petőcz Kálmán (szerk.): National Populism and Slovak - Hungarian Relations in Slovakia 2006-2009 (Somorja, 2009)
Zsolt Gál: Argentina on the Danube - Populist Economic Policy as the Biggest Enemy of Sustainable Economic Growth
Argentina on the Danube... Graph 1 Ineffectiveness of fiscal expansion in small open economies of CEE countries — the case of Hungary □ Real GDP growth Ü Public finance deficit as percentage of GDP Note: Data for 2009: projected GDP decline is Eurostat’s forecast while projected dejicit is the plan of the Hungarian government according to a reviewed agreement with the IMF. Source: Eurostat 2009/b. Structural Indicators, General Economic Background (real GDP growth rate, public balance). Slovakia experienced strong fiscal expansion in the period of 1996-1999. Like in Hungary, it caused significant internal and external imbalances, a ballooning debt and an imminent threat of economic collapse, which eventually forced the new administration to adopt a package of stabilization measures in May 1999. Unlike in Hungary, though, a significant proportion of budgetary deficits was implicit in nature and did not appear in official debt statistics until later. Besides obvious tricks designed to cover up deficit financing (e.g. creation of extra-budgetary state funds), most implicit public debt emerged in one of the following ways: 1. Government provided guarantees for loans extended to state enterprises or private companies that were unable to pay them off and the claims were subsequently transformed into public debt. 2. State-run or private banks that were later nationalized and closed accumulated a large chunk of classified loans that later became part of public debt. 3. Claims with respect to public institutions (i.e. taxes, contributions, customs duties and fees) that later turned into irrecoverable debts. 4. Debts of various 193
