Another Blow For Hungary
The crisis of confidence in Hungary is worsening. Finance Minister Lszl Bekesi has resigned, depriving former Communist Premier Gyula Horn of his most respected economic official. Bekesi was responding to Horn's taking the privatization portfolio away from his ministry. Horn has also fired the privatization chief, Ferenc Bartha. The Prime Minister recently criticized plans to raise $1.5 billion through sales of stakes in the state-owned oil, gas, and electric companies.
With privatization in trouble, analysts are focusing on Hungary's rising current account deficit and its substantial external debt, equal to two-thirds of gross domestic product. A devaluation of the forint, whose value the government controls, is expected.