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It was a political earthquake heard across Europe, and markets responded immediately.<\/p>\n
On April 13, Hungary’s forint (1) rose about 2% against the euro and about 1.6% against the dollar, hitting near multi-year highs, in the wake of one of the continent’s most stunning upsets.<\/p>\n
P\u00e9ter Magyar’s Tisza party won (2) a landslide, defeating Prime Minister Viktor Orb\u00e1n’s government and ending his 16-year rule with the country’s highest voter turnout (3) in decades. The result (4), which handed Tisza a two-thirds supermajority, was considered (5) the “most EU-friendly and market-friendly” outcome for election day.<\/p>\n
Budapest’s BUX stock index (6) surged as much as 4.6% on the news, according to Bloomberg, even as broader global markets were weighed down by geopolitical tensions elsewhere.<\/p>\n
For investors, the question now is whether this rally has legs or whether the euphoria is getting ahead of reality.<\/p>\n
Magyar has made unlocking EU funds (7) a central platform of his plan to reignite Hungary’s economy, which has been in near-stagnation (8) for the past three years. That’s a big deal.<\/p>\n
Around \u20ac18 billion ($21 billion) in EU funding (9) has been suspended over democratic governance concerns, a sum that works out to roughly 8% of Hungary’s anticipated GDP for the year, according to Reuters via MarketScreener.<\/p>\n
The constitutional weight of Magyar’s win also matters. Securing a parliamentary supermajority gave Magyar the ability (10) to amend Hungary’s constitution and dismantle Fidesz control: Orb\u00e1n used his years of supermajority rule to hollow out judicial independence, redraw the electoral system and restrict minority rights, CNN (11) notes.<\/p>\n
Goldman Sachs analysts flagged (12) the longer-term financial upside in a post-election note cited by Global Banking & Finance Review.<\/p>\n
“Tisza has committed to meeting the Maastricht criteria by 2030 to prepare for eventual Euro area accession,” they said, adding that “One of the first steps in a euro convergence program would be to lower Hungary’s inflation target from 3% currently to the Euro area’s 2%.”<\/p>\n<\/p><\/div>\n