Hungarian Prime Minister Viktor Orban announcements caused the euro to tumble to the lowest level since 2006, stocks to turn into red territories leaving its earlier advance, and Hungarian bonds to drop. He said that his economy is in a very difficult situation due to the false figures released by the prior government.
After the announcements cost of insuring against losses on Hungarian budget deficit climbed to 391.5 from 308. The same scenario occurred in swaps on France, Belgium, and Germany in addition to other highly indebted European economies which pushed a gauge of contracts on 15 governments 10 points higher to close at 167, the highest on records.
Credit default swaps on sovereign debt is casting doubts that the 750 billion euros lifeline package will not be able to salvage European economies from the looming debt crisis spreading in the region.
It is worth mentioning, Hungary received 20 billion-euro aid from the EU and IMF in 2008.