ANOTHER VOICE

Privatisation, cuts in child benefit, Thatcherism what happens when the Left wins

PETRONELLA WYATT

In Hungary, where I have been visiting relatives, there are beggars on the Vaci Utca, Budapest's main shopping street. They sit under the Donna Karan and Dior signs that have replaced those of the drab vendors of communism. One is sometimes approached by one of them, extending a hand the colour of mottled paprika. 'You are foreigner?' he ventures in English or German. There is a pause. 'Would you like 6,000 forints [£30]?' Hang on a minute, one thinks, isn't this supposed to be the other way around? Wasn't he meant to be asking for some money?

One of the beggars obligingly explained: You pay me 3,000 forints and I will beg for you. At the end of the week I will bring you back 6,000 forints of what I have made.' He gestured to his leg. 'If you like I get rid of it.' This was taking the customer-service ethic too far. 'Nem, no, I just hide it. Or I make my face terrible. What you prefer?' I am afraid that your correspondent pre- ferred to be a prude: 'I beg your pardon. But that is cheating.' The beggar shook his head. 'No. That is capitalism.'

The beggar, though he did not know it, was not only the poor man's Robert Maxwell, but a parable of modern Hun- gary. Let me tell you a different one, though it is part of the same book. A few months ago, Count Laszlo Karoly, head of one of the country's oldest families, returned to his ancestral castle, which had been confiscated by the communists. In front of a large crowd, including the social- ist minister of the interior, the Karoly arms rose again above the door. The Count rose too: he rose to his feet and shouted, 'The Red Star has been consigned to the gutter.' The Countess half expected to hear the rat- tle of machine-guns. But the minister of the interior smiled benignly.

The Count, who looks like Alcibiades reborn, told me this story over lunch. The Karolys are the first family to have been invited back by the government to live on their old estate. But the gesture was not quite as it seemed. Most of the castle is now a children's home. The Karolys are allowed to live in a few small rooms — for which they voluntarily pay rent. Moreover, the Countess is expected to restore the staterooms and organise cultural events that will raise money for the children's fund.

None of this is because the government

bears any towards the former aris- tocracy. Generously, it offered to return

the Karoly 'fortune'. This had been deplet- ed by plunder and communism to one table, two clocks, two pairs of mirrors, three indifferent paintings and a selection of extraordinarily ugly stuffed birds.

Count Karoly had a sense of humour. 'The minister of the interior wished to make a symbolic presentation to my moth- er as part of the public ceremony. So I sug- gested he present her with this.' He ges- tured not to a depiction of some ancient Karoly in battle but to one of the birds. Its beak had ended up around its neck, giving it a baleful expression. 'I told my mother that when she accepted this bird from the minister she must have tears in her eyes, but my mother refused. So the minister presented her with one of the paintings instead.' The family is daunted by what the government expects. 'We have been told to restore the castle with no financial help from the state. We have no money but we have to raise all the funds ourselves. This would not happen in England.'

That is the problem with Hungary. No one bears neither the government nor the Karolys nor the beggars. The same end result is desired by nearly all. But nobody has any money — particularly not the government. When a nominally left- wing party was voted in two years ago, some commentators in the West, forgetting that they had almost turned a blind eye to Hungarian communism, worked themselves up into semi-hysteria. They claimed that the Hungarians were disillusioned with the capitalist experiment and would return to the old ways. They predicted that the socialist government would, in the interests of one class, practice an economics that would prevent enterprise and put off for- eign investors.

They were wrong. Hungary is doing badly. Inflation is 24 per cent. Unemploy- ment has risen to 10 per cent. But Hungary is doing badly for the right reasons. Instead of throwing money at the working class, the government introduced austerity measures. The currency was devalued, benefits were cut, including the coveted child benefit, and public spending was reduced to 4 per cent of GDP in accordance with IMF standards.

Most Hungarians give Lady Thatcher divine status. Like her early reforms, the austerity programme is a bitter pill which will eventually produce a cure. Far from dismantling the previous administration's denationalisation programme, the govern- ment has even privatised the utilities, some- thing which did not happen in Britain until fairly recently. While the majority of people are still waiting for the rewards, there is already a small new class of super-rich.

Most of them made their money by start- ing their own enterprises. In the West, the Hungarians are often regarded romantical- ly as a gifted, poetic race, too idealistic to succeed in a wicked world. Nothing could be further from the truth. The national instinct has always been to manoeuvre and things have not changed. There is a line in Ninotchka, the boulevard comedy written by the Hungarian Menyhert Lengyel, in which Ninotchka, the female Soviet com- missar, says, 'I know how capitalism works. You make a profit from loss upon loss.' Today a Hungarian might say, 'I know how capitalism works. You make a profit from tax evasion upon tax evasion.' This is a joke, of course, but there is a greater urge here towards free-market riches than in Czechoslovakia or Poland. Perhaps this is because Hungarians remember they were once a partner in one of the world's great empires.

The government, accordingly, believes that economic growth must be export-led. There is a fanatical eagerness to join the European Union. The former Hungarian ambassador to London told me, 'The per- son who predicts the earliest date we will be able to go in is called the greatest patri- ot.' The European Commission has said that negotiations with countries like Hun- gary may start in 1998. But people here are concerned that Brussels is more interested in EMU — too much like the enforced uni- formity of communism for Hungarian tastes — than in including new member states who genuinely deserve to benefit from its markets and assistance.

Hungarians accept that it will be a num- ber of years before they are ready to face the competitive pressure from Community countries. Still, they feel let down. They hoped that the West would clasp their little nation, which had suffered so much, to its bosom. A local politician complained to me, 'The EU has bad priorities. There should be help for countries like us, not bureaucrats. Brussels, as you would say, is an ass.' So the Karoly family needs help and the whole country needs help. Both hold the promise of much talent. It is a paradox that their interests, after all that has happened, are now precisely the same.