Hungary is trying desperately to calm the storm after critics began referring to the country's economy as going down the same road as Greece. There are some significant differences, such as Hungary's budget deficit is about half of Greece's. There is also the fact the Hungary uses its own currency, the Forint, so it is able to increase its export by devaluating the Forint. Hungary also has access to an additional $2 billion USD from the International Monetary Fund through an on-going program of economic reforms, directed by the organization.

However, Viktor Orban, the newly elected center-right prime minister, is facing similar political conditions as his Greek counterpart. Hungarian voters are causing the same difficulties as in Greece as they are unwilling to accept cuts in pay and benefits, which are requested from the EU, the IMF and investors as a method to cut Hungary's debt. There has been an austerity program in place since 2006, although measures have not been enough for in 2008 Hungary needed to be bailed out by the IMF to avoid defaulting on its debts to the amount of $20 billion USD.

During a recent speech, Economy Minister Gyorgy Matolcsy said his government will strive to achieve the 2010 budget deficit of 3.8% of GDP set by the previous administration, downplaying recent comments by other officials suggesting the deficit could reach 7-7.5% of GDP and that the country was close to defaulting on its debts.

This is a rather opportunistic suggestion as the Eurozone growth has become stagnant, which will make a decrease in the deficit extremely difficult. Victor Orban has stated in a speech to Hungary's parliament that there is a new 29 point plan to push Hungary's deficit to a reasonable level. The plan introduces a six-year tax for financial institutions and reduces red tape for investors. He also suggested it would cut public sector wages and eliminate benefits such as free cars and cell phones. A ban on foreign exchange mortgages is also in the works.

The rumours of a Greek styled crisis came from warnings from Lajos Kosa, a vice president of Fidesz, the governing center-right party, and other officials who stated that Hungary was in danger with budget deficits possibly reaching 7.5 % of GDP this year. The deficits were only 4% of GDP for 2009.

Economy Minister Gyorgy Matolcsy said the centre-right Fidesz government, in office since May 29, would stick to a budget deficit target of 3.8% of GDP and would need to cut spending by 1.0-1.5% of gross domestic product. But he also said the government could introduce a flat personal income tax for families, lower than current rates -- hard to square with commitments agreed under a 20 billion euro bailout from the European Union and International Monetary Fund.

Moody's credit rating agency said the government's willingness to consider unorthodox measures to boost tax revenue was cause for concern, while other analysts said Fidesz was still sending mixed messages. Fidesz roared to victory in the April election, eclipsing the former ruling Socialist party whose profligacy in their first four years of power, which was between 2002-2006, helped lead the country into fiscal trouble and triggered austerity measures. Most economists say Hungary is in a much stronger position than Greece. Its deficit and debt ratios to GDP are not nearly as high; public debt was about 80% last year, compared with 133% projected for Greece this year. The question that remains is if the current government can keep to austerity plans and keep on track with the much needed economic reforms or will it go the way of Greece, even though the government demands it is not in the same boat. It is still to be seen which direction the political wind will blow, either pacifying the international community or secure domestic power by easing the burden the voters are carrying.