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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.
He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.
In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.
Global Real Estate Project
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Was Hungarian miracle built on lies?Hungary passes through a period of extreme social tensions and political confrontation, unheard of since the end of the communism 16 years ago. The government and the Prime Minister Ferenc Gyurcsany are under heavy public pressure to resign. His government backed by parliament is keen to stay in office and keeping the path of normal business. The real question isn't whether the government will fall, but whether the country will be the same in the months and years to come; whether investors, domestic and foreign, made a wise decision to put their money into a country that is on a brink of a financial crisis.
History of the problemThe financial problems Hungary faces aren't falling from an empty sky, at least not for the IRED readers. More than a year ago we reminded you that the foreign public debt had been skyrocketing since early 1990s. It was then $57 billion; now it's over $66 billion and still rising; despite the EU financial aid and more restrictive budget it may surpass $70 billion by the next year. The debt now isn't only heavier, serving the debt has become more difficult with the interest rates in both Europe and North America, the leading financial centers, going up. A financial salvation plan that needs as prerequisite falling interests is hardly a sound financial plan at all.We also reminded last year that long-term economic goals have been partly undermined by focusing on short-term social opportunism. In fact all Hungarian governments didn't face financial reality. They borrowed heavily to make economy appear moving up at lowest possible social cost. As long as the interests were low, this mechanism worked more or less smoothly. With both debt and service payments up, it becomes increasingly clear that this may not go on indefinitely. The necessary and painful economic U-turn the government makes now sparks social protests. We may even speculate that what we see nowadays in Hungary is only the beginning of a painful process of reconstruction. Elimination of many social nets that go back into the era of communism and rising taxes will inevitably make many people poorer, will drive criminality up, and will make economic activity less profitable.
What small investors should expect?Another warning, largely confirmed, that we made last years was that the natural limits of easy real estate market growth have been reached in Hungary. Twenty percent market appreciations annually are clearly not to be expected in the years to come. Instead of looking to the market for its short-term capital returns, most investors will have to formulate more long-term strategies. The market that was built upon wrong economic calculations, and on some lies, may fall down; some factors that put Hungary among the best performing post-communist countries however won't change, at least not in the years to come. By this we mean its geographical location, its relatively independent bureaucracy from government, its substantial economic freedom, and its EU membership that provides some clear rules and some opportunities for additional aid.What investors and new residents in Hungary, outside the bad short-term performance of their investments, may expect is the following: the taxes will go up and real incomes will either fall or remain under pressure. Left outside social protection nets more than a million people will strive for survival by either emigrating to richer EU countries or by moving into parallel economy areas or by providing fresh recruitment to local criminal groups.
Hungary country profile: --------------------
See also the directory of companies providing real estate services in, and general real estate information of Hungary.
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