Motor Racing And Gallery Motor

This piece of mine appears in the First Post.

Back in the early 1990s, ITV filmed its detective series Maigret not in Paris, where George Simenon's famous novels are set, but in Budapest, regarded as a dead ringer for 1950s Paris and a place where production costs were much lower. It's a shame the pipe-smoking inspector is no longer walking the streets of the Hungarian capital, as his skills might have been of great help in solving a baffling murder case that has led to speculation from the US to the Middle East.

On Wednesday March 17, just after seven in the morning, Dr Bassam Trache, a 52-year-old veterinary surgeon with dual Syrian and Hungarian citizenship, was shot dead in his black Mercedes at a junction in Budapest's 16th district. The killer grabbed a black briefcase from the car and made off on foot.

Dr Trache, it was revealed, operated a money-changing business. A few years ago he was acquitted in court of attempting to bribe - with jewellery and Arab cakes - the head of the Budapest police's money-changing investigation division.

At first, his murder was regarded as yet another killing connected with the shady world of money-changing; in the past ten years, there have been no fewer than 123 murders connected with the business in Budapest.

But then a more fantastic theory to explain Dr Trache's murder emerged.

It transpired that on the very day that Trache was killed, two Israeli Gulfstream V-type jets were spotted flying low over the Hungarian capital, leading to speculation that, just two months after the assassination in Dubai of Hamas commander Mahmoud al-Mabhouh, the Syrian might have been the victim of a Mossad hit.

You can read the rest of the article here.

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continues apace....

With rising unemployment, rising poverty, huge disparities of wealth and a massive increase in violent crime, is it any wonder that a majority of Hungarians (and not just my wife, Zsuzsanna), believe that things were better before neoliberalism came to the country in 1989?

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This article by my wife Zsuzsanna Clark, on her positive experiences of growing up under communism, (a digest of her forthcoming book ‘Goulash and Solidarity’), appears in today's Mail on Sunday.

Above, some memories of growing up in the Hungarian People’s Republic, put to that wonderfully poignant song Iskolatáska by Demjen Ferenc.(video by 'Agness 401')

AS HAPPY AS A SQUIRREL UP A TREE
Zsuzsanna Clark
Next month Europe will mark the 20th anniversary of the fall of the Berlin Wall. Zsuzsanna Clark was born and raised in Hungary but after meeting her British husband, she moved to the UK in 1999. Here she explains why, contrary to Western beliefs, there were many benefits to life behind the Iron Curtain.......

When people ask me what it was like growing up behind the Iron Curtain in Hungary in the Seventies and Eighties, most expect to hear tales of secret police, bread queues and other nasty manifestations of life in a one-party state.

They are invariably disappointed when I explain that the reality was quite different, and communist Hungary, far from being hell on earth, was in fact, rather a fun place to live.

The communists provided everyone with guaranteed employment, good education and free healthcare. Violent crime was virtually non-existent.

But perhaps the best thing of all was the overriding sense of camaraderie, a spirit lacking in my adopted Britain and, indeed, whenever I go back to Hungary today. People trusted one another, and what we had we shared.

I was born into a working-class family in Esztergom, a town in the north of Hungary, in 1968. My mother, Julianna, came from the east of the country, the poorest part. Born in 1939, she had a harsh childhood.

She left school aged 11 and went straight to work in the fields. She remembers having to get up at 4am to walk five miles to buy a loaf of bread. As a child, she was so hungry she often waited next to the hen for it to lay an egg. She would then crack it open and swallow the yolk and the white raw.

It was discontent with these conditions of the early years of communism that led to the Hungarian uprising in 1956.

The shock waves brought home to the communist leadership that they could consolidate their position only by making our lives more tolerable. Stalinism was out and 'goulash communism' - a unique brand of liberal communism - was in.

Janos Kadar, the country's new leader, transformed Hungary into the 'happiest barracks' in Eastern Europe. We probably had more freedoms than in any other communist country.

One of the best things was the way leisure and holiday opportunities were opened up to all. Before the Second World War, holidays were reserved for the upper and middle classes. In the immediate post-war years too, most Hungarians were working so hard rebuilding the country that holidays were out of the question.

In the Sixties though, as in many other aspects of life, things changed for the better. By the end of the decade, almost everyone could afford to go away, thanks to the network of subsidised trade-union, company and co-operative holiday centres.

My parents worked in Dorog, a nearby town, for Hungaroton, a state-owned record company, so we stayed at the factory's holiday camp at Lake Balaton, 'The Hungarian Sea'.

The camp was similar to the sort of holiday camps in vogue in Britain at the same time, the only difference being that guests had to make their own entertainment in the evenings - there were no Butlins-style Redcoats.

Some of my earliest memories of living at home are of the animals my parents kept on their smallholding. Rearing animals was something most people did, as well as growing vegetables. Outside Budapest and the big towns, we were a nation of Tom and Barbara Goods.

My parents had about 50 chickens, pigs, rabbits, ducks, pigeons and geese. We kept the animals not just to feed our family but also to sell meat to our friends. We used the goose feathers to make pillows and duvets.

The government understood the value of education and culture. Before the advent of communism, opportunities for the children of the peasantry and urban working class, such as me, to rise up the educational ladder were limited. All that changed after the war.

The school system in Hungary was similar to that which existed in Britain at the time. Secondary education was divided into grammar schools, specialised secondary schools, and vocational schools. The main differences were that we stayed in our elementary school until the age of 14, not 11.

There were also evening schools, for children and adults. My parents, who had both left school young, took classes in mathematics, history and Hungarian literature and grammar.

I loved my schooldays, and in particular my membership of the Pioneers - a movement common to all communist countries.

Many in the West believed it was a crude attempt to indoctrinate the young with communist ideology, but being a Pioneer taught us valuable life skills such as building friendships and the importance of working for the benefit of the community. 'Together for each other' was our slogan, and that was how we were encouraged to think.

As a Pioneer, if you performed well in your studies, communal work and school competitions, you were rewarded with a trip to a summer camp. I went every year because I took part in almost all the school activities: competitions, gymnastics, athletics, choir, shooting, literature and library work.

On our last night at Pioneer camp we sang songs around the bonfire, such as the Pioneer anthem: 'Mint a mokus fenn a fan, az uttoro oly vidam' ('We are as happy as a squirrel on a tree'), and other traditional songs. Our feelings were always mixed: sad at the prospect of leaving, but happy at the thought of seeing our families again.

Today, even those who do not consider themselves communists look back at their days in the Pioneers with great affection.

Hungarian schools did not follow the so-called 'progressive' ideas on education prevalent in the West at the time. Academic standards were extremely high and discipline was strict. My favourite teacher taught us that without mastery of Hungarian grammar we would lack confidence to articulate our thoughts and feelings. We could make only one mistake if we wanted to attain the highest grade.

Unlike Britain, there were 'viva voce' exams in Hungary in every subject. In literature, for example, set texts had to be memorised and recited and then the student would have to answer questions put to them orally by the teacher. Whenever we had a national celebration, I was among those asked to recite a poem or verse in front of the whole school.

Culture was regarded as extremely important by the government. The communists did not want to restrict the finer things of life to the upper and middle classes - the very best of music, literature and dance were for all to enjoy.

This meant lavish subsidies were given to institutions including orchestras, opera houses, theatres and cinemas. Ticket prices were subsidised by the State, making visits to the opera and theatre affordable.

'Cultural houses' were opened in every town and village, so provincial, working-class people such as my parents could have easy access to the performing arts, and to the best performers.

Programming on Hungarian television reflected the regime's priority to bring culture to the masses, with no dumbing down.

When I was a teenager, Saturday night primetime viewing typically meant a Jules Verne adventure, a poetry recital, a variety show, a live theatre performance, or an easy Bud Spencer film.

Much of Hungarian television was home-produced, but quality programmes were imported, not just from other Eastern Bloc countries but from the West, too.
Hungarians in the early Seventies followed the trials and tribulations of Soames Forsyte in The Forsyte Saga just as avidly as British viewers had done a few years earlier. The Onedin Line was another popular BBC series I enjoyed watching, along with David Attenborough documentaries.

However, the government was alive to the danger of us turning into a nation of four-eyed couch potatoes. Every Monday was 'family night', when State television was taken off the air to encourage families to do other things together. Others called it 'family planning night', and I am sure the figures showing the proportion of children conceived on Monday nights under communism would make interesting reading.

Although we lived well under 'goulash communism' and there was always enough food for us to eat, we were not bombarded with advertising for products we didn't need.
Throughout my youth, I wore hand-me-down clothes, as most young people did. My school bag was from the factory where my parents worked. What a difference to today's Hungary, where children are bullied, as they are in Britain, for wearing the
'wrong' brand of trainers.

Like most people in the communist era, my father was not money-obsessed.
As a mechanic he made a point of charging people fairly. He once saw a broken-down car with an open bonnet - a sight that always lifted his heart. It belonged to a West German tourist. My father fixed the car but refused payment - even a bottle of beer. For him it was unnatural that anyone would think of accepting money for helping someone in distress.

When communism in Hungary ended in 1989, I was not only surprised, but saddened, as were many others. Yes, there were people marching against the government, but the majority of ordinary people - me and my family included - did not take part in the protests.

Our voice - the voice of those whose lives were improved by communism - is seldom heard when it comes to discussions of what life was like behind the Iron Curtain.
Instead, the accounts we hear in the West are nearly always from the perspectives of wealthy emigrés or anti-communist dissidents with an axe to grind.

Communism in Hungary had its downside. While trips to other socialist countries were unrestricted, travel to the West was problematic and allowed only every second year.
There were petty restrictions and needless layers of bureaucracy and freedom to criticise the government was limited. Yet despite this, I believe that, taken as a whole, the positives outweighed the negatives.

Twenty years on, most of these positive achievements have been destroyed.

People no longer have job security. Poverty and crime is on the increase. Working-class people can no longer afford to go to the opera or theatre. As in Britain, TV has dumbed down to a worrying degree - ironically, we never had Big Brother under communism, but we have it today.

Most sadly of all, the spirit of camaraderie that we once enjoyed has all but disappeared.

In the past two decades we may have gained shopping malls, multi-party ' democracy', mobile phones and the internet.

But we have lost a whole lot more.

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This article of mine appears in the First Post.

Twenty years ago this month, the downtrodden people of eastern Europe took to the streets and rose up against their communist oppressors. The corrupt tyrannical regimes, universally despised, were swept away by this unstoppable surge of 'people power'. Free elections were then held and everyone lived happily ever after.

So goes the standard Western version of the historic events of October and November 1989, brought to you faithfully by CNN and Fox News.

There's just one thing wrong with the narrative: it's a myth.

It wasn't the strength of public opposition that ended communist rule over eastern Europe - but the actions of leading communists themselves. And the country which played the pivotal role in the dramatic events of 1989 was Hungary.

It was Hungary's communist government which in early January 1989 permitted the establishment of non-communist parties and allowed freedom of assembly and association. It was Hungary's government which made the fateful decision to open to East Germans the country's border with Austria, triggering the exodus of thousands of East German holidaymakers to the West. ("It was quite obvious to me that this would be the first step in a landslide-like series of events," Hungarian Foreign Minister Gyula Horn said later).

Even before the demonstrations of the autumn, the Hungarian government had already negotiated with anti-communist groups over the country's transition to a non-communist system.

From 1956-88, Hungary had been led by a committed communist, Janos Kadar, 'The Good Comrade' of Roger Gough's 2006 biography. Kadar had warned that "those who joined us (the communist party) for selfish, personal reasons for a career or other motives will be asked to leave". But by the 1980s, the upper echelons of Hungary's ruling communist party was full of people who had little - if any- ideological commitment to the ideals of Marx and Lenin.

These self-styled 'reformers' ousted Kadar in May 1988, and after Soviet leader Mikhail Gorbachev told the UN Assembly in December that year that Soviet troops would withdraw from eastern Europe, the final decisive moves to destroy communism could be made.

In an interview with the BBC earlier this year, Imre Pozsgay, Hungary's Minister of State in 1989, admitted that he had been working from within the government in order to bring the system down. "I came to the conclusion that I could do more for my country from the inside, in a position of power than as a marginalised opposition figure."

The great irony is that in Hungary in the late 1980s, there was more support for communism among ordinary people than there was among the ruling communist elite.

Because the accounts we read in the West are nearly always from the hostile perspective of upper or middle-class émigrés or dissidents, the achievements of communism in eastern Europe have tended to be ignored.

For all its faults, communism provided job security, generous welfare provisions (Hungary's system of maternity leave, which provided working mothers with three years' paid leave of absence for each of her children was described as "unique even by international standards"), and good standards of education and health care. It also engendered a spirit of camaraderie that more individualistic, capitalist societies often lack.

Even those who did take to the streets in eastern Europe in 1989 to protest against their governments were not calling for the introduction of free-market capitalism - but for a less authoritarian form of socialism. "Back then we still did believe it would be possible to create another type of socialism. There were many things that disturbed us and made us angry, but nevertheless we had a good life in many ways," Andreas Blazejewski, a street protestor in East Germany said in the BBC documentary The Lost World of Communism.

Of course, the people of eastern Europe didn't get what they wanted: the positive aspects of life under communism were lost along with the negative. As their economies were "reformed" millions lost their jobs and, for many, living standards plummeted.

But for the Hungarian 'insiders' who played such a key role in destroying communism, it was a different story:

• Miklos Nemeth, Hungary's last communist Prime Minister, was appointed Vice-President of the London-based European Bank for Reconstruction and Development.

• Gyula Horn, Hungary's Foreign Minister in 1989, was lauded by the West as he put his country on the path to Nato and EU membership when elected Prime Minister in 1994

• Peter Medgyessy, deputy prime minister in charge of economic affairs, became chairman and chief executive officer of Magyar Paribas Bank (a part of the French banking group) before he, too, returned as Hungarian Prime Minister, in 2002.

• Laszlo Kovacs, an important figure at the Ministry of Foreign Affairs from 1986, became the Foreign Minister who negotiated Hungary's entry into Nato in the 1990s and is now a superannuated EU Commissioner in Brussels.

The 'reformers' claimed to be acting in the best interests of Hungary. The system had to change they said - the economy was stagnating and there had to be major 'restructuring'.

It all sounds very reasonable, but when you look at the lucrative careers Hungary's faux-communist elite pursued after 1989, it's hard not to be cynical about their motivation.

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This article of mine appears in the New Statesman.

Twenty years ago, Hungary's decision to open its border with Austria triggered the dramatic events that led to the fall of communism in eastern Europe. But today the country is fighting the neoliberal economic model imposed after 1989.

In Pécs, a historic city in the south, the local authority has reacted to public anger over soaring water bills by sending security guards to seize the local waterworks from the French company Suez Environment and to prevent its management from entering the building.

A 48.05 per cent stake in the city's water company was sold to the French multinational, which supplies water to 76 million people worldwide, in 1995. The company also receives an annual "management fee" of 120 million forint (£419,000).
The mayor of Pécs, Zsolt Páva, has accused Suez of profiteering and a lack of transparency, and the town cancelled the contract with effect from the end of September. Suez is countering with legal proceedings. "If 20 commandos arrive at 3am and occupy somewhere, that is not a European solution, and is undoubtedly illegal," a company manager said.

But Suez, whose turnover last year was €12.4bn (£11.5bn), should not expect much sympathy from local people, struggling to make ends meet in an economy where real wages are forecast to fall by up to 3.5 per cent this year. In a poll, 94 per cent said they supported the local authority.

It's not the first time the French company's record has been challenged. The pressure group Food and Water Watch charges Suez with a "range of abusive practices that place profit before the human right to water", including refusing to extend services to poorer areas, cutting off water if people are unable to pay, and "raising rates to unaffordable levels".

Opposition to privatisation is high, so, with a spring election looming, even neoliberal politicians are having to change their tune: in June, Prime Minister Gordon Bajnai said he would prevent privatisation of the water supply.

Multinationals may not like it, but 20 years on from capital's conquest of eastern Europe, public ownership, not privatisation, is the vote-winner.

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video: BuffONgigi.

So the long wait continues. Last night's 3-0 defeat in Portugal means that once again Hungary have missed out on playing in the finals of a major football tournament. It's now 23 years since Hungary competed in the finals of a World Cup or European Championships. And all this from a country that used to be one of the greatest footballing nations in the world. What's gone wrong?

Below you can read my Observer piece from 2003 enitled 'Do you remember when Hungary ruled the world?'- looking back on the golden age of Hungarian football and attempting to find the reasons for the sad decline. And above you can watch 'The Magnificent Magyars' (Ferenc Puskas and co) in their heyday-beating England 6-3 at Wembley in 1953. All football romantics must hope that Hungary will once again be a force in world football. But at least there's one piece of good news from last night's World Cup qualifiers: Serbia will be going to South Africa to compete in their first ever World Cup finals (Serbia and Montenegro competed in 2006), after their stunning 5-0 win over Romania.

Do you remember when Hungary ruled the world?
Neil Clark.
The Observer, November 2003.

While England's heroics in Turkey grabbed the headlines after the final round of Euro 2004 qualifiers, little attention was given to the significance of a match played the same night, 700 miles away in Budapest. A 2-1 home defeat by Poland meant that Hungary had failed to qualify for the latter stages of a major international tournament for the ninth consecutive occasion.

To anyone under 35, it must be hard to believe that there was a time when Hungary had the best football team in the world. Yet 50 years ago they unquestionably did. In fact, three great judges - Sir Bobby Robson, the late Billy Wright and my dad - have rated the Hungarian Arany csapat (Golden Team) as the greatest football team ever. 'The Magnificent Magyars' were so sexy that they made Johan Cruyff's Dutch side of 1974 look positively frigid.

Hungary walked away with the 1952 Olympic title in the middle of a three-and-a-half-year unbeaten run. Between June 1950 and November 1955 they scored 220 goals in 51 matches, an astonishing average of more than four goals a game. The side's greatest moment came in 1953, when England's Wembley invincibility was finally breached in a thrilling 6-3 victory. It is difficult to exaggerate the impact that result had on world football. The revolutionary use of a deep-lying centre-forward, Nandor Hidegkuti, with inside-forwards Sandor Kocsis and Ferenc Puskas acting as spearheads, had England's defence in tatters and coaches all over the world rewriting their manuals. There seemed no doubt that the Hungarians - who repeated the mauling of England in a 7-1 win in Budapest the following spring - would be crowned world champions in 1954. But everyone had overlooked the Germans, about to embark on what became their habit of denying sexy football its rightful reward. The Hungarians swept their way to the final, racking up an 8-3 victory against the Germans in the group stage. But Germany, with the aid of a visually impaired British linesman, triumphed at the last. Hungarian football never reached the same heights again. Two years later, the Soviet tanks rolled into Budapest and Puskas and co (taking with them half the youth team, too) jumped ship, preferring the lure of Spain to the challenge of building a socialist utopia at home.

Even after the exodus, Hungary continued to produce decent enough international teams (the 1966 World Cup side defeated Pelé's Brazil, 3-1), but from the mid-1980s the decline went from relative to absolute. In 1997,, there was a glimmer of hope - a play-off against Yugoslavia for a place in the 1998 World Cup. But after just nine minutes of the first leg, at home, Hungary were three goals down; the Yugoslavs won 7-1 (12-1 overall).

Speak to most people over 50 and they will blame the new democracy for the decline. Under communism, football in Hungary was collectivised and most of the Golden Team played week in, week out for the same club, the army team Honved. The fall of communism cannot wholly explain the demise: countries such as the Czech Republic, Romania and Bulgaria have continued to produce good international sides since the Iron Curtain came down. Whatever the source of the malaise, the once football-mad Hungarians now seem to be past caring; they've been through the pain barrier too many times.

The national team has become a taboo subject. Football is as unfashionable in Hungary today as it was in England back in the mid-1980s. For traditionalists the world over, brought up from childhood on tales of 'The Magnificent Magyars', that surely is the saddest thing of all.

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This piece of mine, on alarming developments in Hungary, appears in The New Statesman.

His approval ratings are among the lowest ever achieved by a prime minister. As the former manager of the country’s finances, many blame him for its current economic predicament. By nature an introvert, he is finding it hard to build up a rapport with the electorate. His name is Gordon B....

No, not Gordon Brown, but Gordon Bajnai, who last month was sworn in as the new prime minister of Hungary.

The similarities between the political situations in Hungary and Britain are striking. In both countries a nominally left-of-centre – but actually pro-big business and pro-privatisation – government has presided over an unsustainable credit boom. Both have been hit hard by the global recession. We should also note that Bajnai’s predecessor, Ferenc Gyurcsány, was widely referred to as “Hungary’s Tony Blair” and is a friend of Peter Mandelson.

But there are important differences, too. Britain’s Gordon B may not have had his elevation to the premiership endorsed by the electorate, but he is nonetheless a democratically elected member of parliament. Hungary’s Gordon B has not been elected to any office.

A millionaire businessman, nicknamed “Goose Gordon” for his controversial role in the liquidation of a poultry firm in which hundreds of producers lost their savings, Bajnai became prime minister due to the support of the neoliberal SZDSZ party (Alliance of Free Democrats), who despite having the support of only 1 per cent of the electorate, according to recent opinion polls, hold the balance of power in parliament.

Bajnai is not a member of any political party, but a friend and former business partner of both Gyurcsány and the SZDSZ leader, János Kóka. Imagine if in Britain the Lib Dems held the balance of power in the next parliament and Nick Clegg installed an old business buddy, who was not an MP, as PM.

It sounds far-fetched, but it has happened in Hungary. Realising that they stand little chance of winning seats in the next election, the SZDSZ, who reacted angrily when voters in a referendum last year rejected the imposition of hospital and doctor’s visit fees and higher-education tuition fees, have been pushing for a “government of experts” to impose the draconian cutbacks in public spending that they have long advocated. Now they have got what they wanted.

In addition to the prime minister, other unelected “experts” in the new government include finance minister Peter Oszko, formerly head of Deloitte Hungary; economy minister István Varga, the former head of Shell in Hungary; and minister of transport, telecommunication and energy, Peter Honig, the former CEO of the airline Malev.

The fact that unelected figures hold so much power in a European country that styles itself a democracy is alarming. The formation of “non-political” governments to introduce swingeing cuts in public expenditure – and privatise health care, lower pensions and drastically reduce welfare provision – is an undemocratic development that could spread.

Such governments are a long way from being “non-political”. On the contrary, they are espousing ideologically motivated economic policies, but do so under the smokescreen of “financial necessity”. Unable to receive a popular mandate for their reforms, neoliberals in Hungary have stuck two fingers up at the democratic process. As the economic crisis deepens and public unrest grows, don’t rule out their counterparts in other countries following suit.

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This article of mine appears in The Morning Star.

If voting changed anything they’d abolish it, the old maxim goes.

If anyone doubts the truth of it, just visit Hungary.

Earlier this year the Hungarian people heavily rejected, in a national referendum, three key elements of the neo-liberal government's "reform" programme: the imposition of hospital and doctor's visit fees and the imposition of higher education tuition fees.

Hungary’s ruling elite were furious.

Janos Koka, of the fanatically neoliberal ‘Free Democrats’(SZDSZ), a party whose embrace of unbridled capitalism makes Thatcher’s Tory party look like social democrats, reacted by asserting that he would “like to assure the international money and capital markets that the government upholds its commitment to reforms and a strict and tight budget,"- in other words that the people‘s democratic will, as expressed in the referendum, counted for nothing.

After leaving the government in early summer after a row over the budget, the decidedly anti-democratic ‘Free Democrats’ spent the next few months calling for a ‘government of experts’ to be appointed in Hungary. We know the sort of ‘experts’ they had in mind- ‘free market’ ideologues like the notorious Dr Lajos Bokros, from the George Soros-funded Central European University- a man who supports the introduction of compulsory private health insurance and who has questioned "the subjective right to receive a pension".

The SZDSZ has now dropped its call for a ‘government of experts’, because they have got something even better.

Last month, Hungary applied for- and received a $25bn ‘rescue package’ from the IMF, World Bank and European Union. The collapse of the Hungarian economy is of course a shocking indictment of the hardline neoliberal policies that the ruling MSZP/SZDSZ coalition have been following over the past six years, policies that have been lauded by foreign capital and their political emissaries. But while Hungary’s bail-out is undoubtedly a national embarrassment, for the country’s ruling elite it has served a definite anti-democratic purpose.

It is widely accepted that the size of the rescue package- which dwarfs that of neighbouring Ukraine- far exceeds the amount the country needs. But by signing up to the deal- and to the strings attached- the Hungarian government is effectively stymieing the opposition’s plans to plot a different economic path when it comes to power in the election of May 2010. It's clear that the government intends to use the ‘rescue package’ as a excuse to carry out the ‘reforms’ and the swingeing cuts in public spending it always wanted to implement- and to end any political debate as to whether the ‘reforms’ and cuts should be imposed or not.

A classic example is the abolition of the totemic 13th month salary for public sector workers, paid at Christmas each year. “We did not need to cut the payments to get the IMF’s help. We did it to send a clear message to investors that the government is ready to make cuts.“ admitted government spokesman David Daroczi.

The rescue package gives the government the excuse to rush through the privatisation of those assets which in remain in public ownership. Late last month the SZDSZ/MSZP faction on Budapest council voted to sell of the city’s gas company. The national grid is also to be flogged off; bus and postal privatisation is in the offing too.

The rescue package also gives the government the opportunity to hammer the final nail into the coffin of the country’s chronically underfunded state health service. In its new budget, the government has proposed cuts of HUF35bn for the Health Insurance Fund- cuts which have been described as ‘fatal’ by the opposition. The country’s long-suffering pensioners, already facing massive hikes in their fuel bills this winter, are also in the neoliberals’ firing line- with a freeze on their annual bonus and the elimination of the annual bonus for early retirees.

It matters little that all these extremist policies are opposed by the vast majority of the public.

The reforms are described as ‘apolitical’- measures that simply have to be passed.

Interestingly though there is one item of government expenditure that the Hungarian government- and their Free Democrat allies do not support cutting back. After NATO’s two day conference in Budapest last month, Defence Minister Imre Szekeres said that Hungary would increase spending by 7% next year and by 0.2% of GDP annually over the next five years. The country that can’t afford toilet paper for patients in state hospitals, does it seem, have money to send Hungarians to take part in imperial adventures at the behest of Uncle Sam in Afghanistan.

What recent events in Hungary demonstrate is that democracy is inconsistent with neo-liberalism. The only democracy modern turbo capitalism allows is of the ‘Henry Ford’ variety- namely that the people can vote for any polices they like- so long as they are the ‘approved’ neoliberal ones which put the needs of capital- before people.

So even if people vote in their millions, as they did in Hungary in March against extremist neoliberal solutions, the elite finds ways of subverting their wishes.

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This piece of mine appears in The First Post.

It was the ex-communist country that did everything the West and its neo-liberal economic 'experts' said it should do. It privatised vast swathes of its economy. It allowed free and unhindered access to Western multinationals. It filed up obediently to join Nato and the EU and employed Goldman Sachs to give advice on privatisation.

Now, after 20 years of free-market 'reforms', Hungary, together with the Ukraine, sees the results of its policies: an IMF bail-out.

Hungary's economic collapse gives a lie to the dominant narrative that eastern European countries have thrived since the sweeping political changes of 1989.

I lived and worked in Hungary during the 1990s and saw at first hand the way that the economic 'reforms' insisted upon by the IMF, the World Bank and the EU adversely affected the majority of the population.

Ten years on, and times are even tougher. On a recent visit to Hungary I was shocked by the increase in street beggars and the number of old people I saw searching for scraps in trash cans.

Away from the swanky new Budapest bars around Liszt Ferenc Ter and Vaci Ut which cater for foreign businessmen and home-grown yuppies, the capital has a shabbier, poorer look than it did a decade ago. The fall in living standards became even more apparent when I visited other towns and cities in the country.

The statistics paint a depressing picture. Last year, real wages in Hungary fell by seven per cent. The UN's Food and Agriculture Organisation has reported that 200,000 people in Hungary, including 20,000 children, are under-fed. One in five children are being brought up in poverty, while campaigners predict that recent price hikes of electricity and gas could push a further 3m people into poverty.

The truth is that Hungary, like the Ukraine, has gone backwards, and not forwards since the fall of communism. Even Viktor Orban, the staunchly anti-communist leader of the main conservative opposition party Fidesz, has conceded that for the majority, life was easier in the relatively liberal 'goulash' communism era of the 1970s and 80s.

Despite the selling-off of millions of pounds worth of state assets in the government's mass privatisation programme, Hungary's public finances remain in a poor state. The scale of corruption has been mind-boggling: Prime Minister Ferenc Gyurcsany (pictured above) - whose 'pro-reform' economic policies have been lauded in the West - has an estimated fortune of £10m, made from controversial privatisation deals in the early 1990s.

The new IMF loan, far from being the salvation that Hungary's political elite is claiming, is likely to make things even worse. The IMF is insisting the government pursues 'strong policies' to reduce its deficit - shorthand for yet more swingeing cuts in public spending. That would mean the final nail in the coffin for the country's chronically under-funded health service; my mother-in-law had to bring in her own toilet paper during a hospital stay this summer.

The IMF loan is also likely to mean the enforced privatisation of the few assets remaining in state ownership, regardless of widespread public opposition.

"What's the difference between communism and capitalism?" is the joke currently doing the rounds in Budapest. Answer: "Under communism we had a big government debt but we lived well. Under capitalism we have a big government debt but we don't live well."

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My wife Zsuzsanna saw this comment on the Denis Matyajaszek thread:

When the Kremlin turned on Hungary and Czechoslovakia, they did that with "fiendly" (sic) tanks to save the people from kapitalism. I shall nerver (sic) forget 1956,what they did to my country, Hungary!!!Posted by Tessa Hegedus on August 11, 2008 6:44 PM

Here's Zsuzsanna's reply:

Tessa, I am Magyar too, and I too will never forget what the Soviet Union did to my country. They liberated it from the Nazis and by doing so saved the lives of hundreds of thousands of Jews and other anti-Nazis. Never forget that Hungary took part in Operation Barbarossa, the attack on the Soviet Union in 1941 alongside the Nazis. The aggression was first from Hungary, not from Russia, and I say this as a Hungarian.Posted by Zsuzsanna Clark on August 11, 2008 7:08 PM

In the anti-Russian hysteria of the moment, it's important to get the facts right.

I might also add a personal note: during my time living in Hungary in the 1990s, I rented a flat from a Jewish landlord, an erudite and kindly man who became my good friend. Every year on the anniversary of the Soviet liberation of Hungary he would go to the Russian cemetery and lay a wreath. Had the Russians not arrived when they did- he and his family simply wouldn't be alive. I'd like to see someone explain to him that the Soviet Army in 1945 was not an army of liberation.

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