On Friday, May 3rd, a group of Foster students and finance faculty members had the unique opportunity to meet with Ambassador Gyorgy Szapary, Hungarian Ambassador to the United States. An economist who worked for the International Monetary Fund and served as deputy governor of the National Bank of Hungary in his previous roles, Ambassador Szapary spoke on the topic of the European debt crisis. He began by observing that the European debt crisis is really a triple crisis: it started as a financial crisis, became a debt crisis, and is now a confidence and growth crisis. The ambassador used the analogy of an iceberg: the financial crisis was the part that was visible above the water, but many more problems were discovered under the water.
The European response to the crisis has been to impose fiscal discipline (austerity), although there is now a debate about whether to switch to more expansionary, growth-focused policies. Ambassador Szapary reviewed the economic performance of European countries over the last five years and contrasted it with the US economy. In a wide-ranging question and answer session, the ambassador addressed questions about bank regulation, the prospects for Hungary adopting the euro, the availability of credit to Hungarian businesses, the effect of austerity policies on social cohesion, and the Hungarian constitution.