Orban is a fairly unpleasant politician, and potentially another Vladimir Putin in the making.
(...) Everyone knows the reason. The confidence of the bond markets has to be restored. The debtors have to be paid in full. The banks can’t be allowed to go bust, otherwise the entire economy will collapse.
In fact, it isn’t really true. Iceland went bust, and seems to be growing again now — indeed, it is doing better than many of the countries that are still struggling to pay back every cent they owe. Eventually new leaders are going to emerge who demand that some of the debts get written off. Europe will be the epicenter of that. But it won’t be restricted to Europe alone. The U.S. has massive, and quite possibly unaffordable debts. So does Japan. So do many other countries.
In reality, sorting out of the debt bubble is going to take a long time and is going to involve a lot of pain for everyone. The view of the markets is that it is always ordinary people who should take the punishment — and never the banks or bondholders who should suffer any losses.
But Hungary shows that isn’t always going to be possible.