Thomson-Reuters: Key political risks to watch in Hungary

“[…] Hungary, which relies heavily on foreign capital to finance its debts, no longer has the safety net of an IMF deal, leaving it exposed to potential negative shifts in global investor sentiment.

Two ratings agencies which signalled in July that they could cut Hungary’s sovereign debt rating if it did not present credible fiscal plans, have not yet formulated their views on recent budget measures.

Followings are key risks to watch in coming months.

BUDGET POLICY/DEBT FINANCING […]

What to watch:

  • govt comments on structural reforms
  • rating agencies’ comments on the 2011 draft budget […]

POWER PLAY/CONFUSING COMMUNICATION […]

What to watch:

  • Fidesz’ plans for a new Constitution which they want to pass in parliament next year
  • any further attempts to weaken checks and balances […]

CENTRAL BANK […]

What to watch:

  • Any further attacks on Governor Simor and the bank.
  • Any attempts to meddle in monetary policy.
  • Modifications to the existing central bank law.”

http://www.reuters.com/article/idUSRISKHU20101101