Széchenyi István University of Győr,
Faculty of Law, Department for
Constitutional Law and Political Science
Dr. Zoltán SZENTE, DSc
Professor of Law
Problem-setting
The effects of the world financial crisis on Hungary’s economy
Political background
Constitutional effects I – the economic and financial provisions of the new
Basic Law
Constitutional effects II
constitutional implications of the economic policy
Conclusions
2004 2005 2006 2007 2008 2009 2010 2011
-8 -6 -4 -2 0 2 4 6
Annual changes of GDP
GDP
1. The effects of the world financial crisis on Hungary’s
economy
1. The effects of the world financial crisis on Hungary’s economy
Year %
2004 -6,5
2005 -7,9
2006 -9,3
2007 -5,1
2008 -3,7
2009 -4,6
2010 -4,2
2011 -4,3
Government deficit in proportion of GDP (%)
Legitimacy crisis since 2006
Landslide victory of rightist parties in 2010
Restructuring of the party system
2. Political background
No new constitution after the systemic change
Rapid and intransparent procedure
Legitimacy problems
The Basic Law of 2011
3. The economic and financial provisions of the new Basic Law
New economic and taxation principles
Debt ceiling rules
Restricting judicial control over public
finance
Curbing the freedom of action of the next
governments
The restriction of the budgetary power of
the Parliament
Conservative economic philosophy
3. The economic and financial
provisions of the new Basic Law
• Property rights
The nationalization of private pension fund savings
• Rule of law
The retroactive taxation of severance payments
4. The ‘unorthodox’ economic policy
and its constitutional implications
• Non-Discrimination
Imposing ‘crisis taxes’ on certain economic sectors
• Freedom of contracts Setting fixed exchange rates for private loans
