Debt and Democracy
PRINCETON – The European Union’s sovereign-debt crisis constitutes a fundamental threat not only to the euro, but also to democracy and public accountability. At the moment, Europe’s woes and dilemmas are confined to relatively small countries like Greece, Ireland, and Hungary. But all of them look as if their governments have cheated on fundamental articles of the democratic contract.
The rotating presidency of the EU is about to shed a spotlight on one of these countries. Hungary’s turn at the EU helm comes at a time of fierce debate over Prime Minister Victor Orbán’s alteration of constitutional law and suppression of press freedom, as well as a new round of worries about the country’s financial sustainability.
Hungary has many reasons to be sensitive to the issue of the political consequences of debt. After all, Hungary still holds the world record for hyperinflation, with the currency debased by 1027 in the 1940’s, paving the way for the imposition of Communist dictatorship.