A Horse, A Horse, My Kingdom For A Horse

You know things are bad when a racehorse is the only glimmer of hope. From the New York Times:

A racehorse bought for a pittance has turned into a national hero in crisis-stricken Hungary.

The thoroughbred known as Overdose pounded down the stretch here at Kincsem Park on Sunday to extend his record to 12 wins in 12 races, his jockey clad in the red, white and green of the Hungarian flag.

And for an afternoon at least, the crowd of more than 20,000 in the grandstand and lining the rail, along with all the Hungarians watching at home, could forget about the resignation of the prime minister and their currency’s nosedive.

As times have gotten tougher here, the 4-year-old Overdose has become the Hungarian Seabiscuit, a symbol of hope for Americans during the Great Depression. He appears to remind Hungarians of themselves: undervalued and underestimated....

The horse’s popularity has even attracted politicians. On Friday, Viktor Orban, chairman of the center-right Fidesz Party and a former prime minister who hopes to reclaim the job in next year’s election, turned up with a crowd of television cameras to pose with the star.

“Failure is the most often heard expression in Hungary today — failure, mistake, pessimism. When even a horse is able to make a miracle from nowhere, it’s a sign of hope that we can get out from the desperate situation we are now in,” Mr. Orban said.

“If I were a politician, I would do the same, because Overdose is one of the most famous persons in Hungary,” said Mr. Horvath, “even though he is a horse.”

How long before the US looks for its own modern Seabiscuit?

Hungary On The Brink?

As Eastern European governments fall victim to the global financial crisis, the issue of social and political instability gets injected into what is already a Gordian knot of an economic crisis. The specter of economic nationalism and sovereign defaults haunts the international system. While the G20's steps to shore up the financing of the IMF undoubtedly mark a positive step in the direction of global stability, the question of what to do with countries such as Ukraine and Hungary that cannot or will not enact IMF fiscal austerity measures still looms. This concern is even more acute given that Hungary's prime minister stepped down a few weeks ago, amidst the political fallout that trying to follow the IMF's spending restrictions generated. From the New York Times:

As for Hungary, the $25 billion agreement it signed with the monetary fund last year has put it in an awful policy vise. Mandated to squeeze its budget deficit below 3 percent of gross domestic product, the government is in no position to stimulate an economy estimated to sink by as much as 6 percent this year.

There is no painless path to recovery.

“Hungary has an uphill struggle, but we know that,” Gordon Bajnai, the economy minister, said in an interview in late March. “We need a reform-minded government.”

On Monday, Prime Minister Ferenc Gyurcsany, the former Communist who has led the country since 2004, appointed Mr. Bajnai, a 41-year-old former businessman, to lead that effort as his successor.

But furious opposition from Hungary’s right wing — which has called for elections — may limit the scope of his ambitions.

Lajos Bokros, a former finance minister, says that the alternative to not meeting the monetary fund’s conditions is bankruptcy. He worries that the forint will fall even further amid the political uncertainty — a concern underscored by downgrades of Hungary’s credit rating by Standard & Poor’s and Moody’s this week.

The social dimensions of this crisis are only beginning to be felt. Hopefully this climate of political and economic fear will not usher in a new era of extremism.