During a brief business visit to Budapest I enjoyed sunny weather as I strolled on the banks of the Danube adorned by faded monuments and classic buildings that reveal the past glory of a country that, not so long ago, formed part of the glorious Hapsburg Empire. Still, Hungary an ex- Communist county that now forms part of the EU has seen better days in its economic history and one can easily notice the general pessimism in the business sector particularly the risk averse banks some of which had their fingers burnt on a number of non performing property loans. But the political sentiment expressed by the common people who I met reveals a downbeat feeling that the country is facing the doldrums. The aggressive stance taken by Prime Minister Victor Orban against the EU, defying its warnings not to touch the Constitution, resulted in accusations that the nationalist government is passing amendments to boost its own powers and to weaken the independence of Hungary’s courts. Since achieving a landslide electoral victory in 2010, Orban has clashed regularly with Brussels over laws on the media, the central bank and the courts. It is true that the official figures show that the annual deficit is below the three per cent of GDP, ceiling but one notes the poverty in the central parts of Budapest where one still meets poor people sleeping on cardboard sheets in the open and beggars roam the streets amid the affluence of shops selling luxury goods such as Luis Vuitton, Burberry and Madison.

Not unlike Malta, the Hungarian Justice minister wants to reform the courts from their Byzantine system inundated with litigious cases, which take decades for justice to be served. Yes, the government was to amend the Constitution to resolve the problem of overburdened courts with appropriate structural changes (reminiscent of Franco Debono). For a start, Budapest will remove a clause that allows it to impose new taxes to cover payment obligations arising from rulings of the European Court of Justice or other international courts. The question is whether the reforms go too far and weaken the power and prestige of the judiciary such that since 2010 hundreds of laws were revamped, but Orban who claims his changes are democratic because of his large parliamentary majority has silenced critics. In his defence, Orban plays a Robin Hood style politics threatening the interests of foreign business lobbies with hefty taxes on banks, energy and telecoms. So yes the pendulum did swing to the far right in Hungary and there is a general feeling of helplessness among the professional elite that they are sitting ducks expecting future rallies against their interests by the populist government. So does this classify Hungary as another bailout contender, which will soon need to go begging for more IMF loans? Will its people protest in the streets, as has happened in Turkey and Brazil who were turning to extremist movements merely to express their discontent against elected politicians? Discontent is growing and the list of ailing EU economies now includes the sudden failure of Portugal, which is facing higher interest charges to borrow on the markets to plug its increasing deficit.

Another hot potato is Greece which has a new party – Golden Dawn, a neo-Nazi party that has about 12 per cent support. Again these extreme movements in Athens may be a fleeting protest vote reflecting the social pain suffered by widespread youth unemployment even though some doubt whether the patient is taking the full dosage of the prescribed medicine, ie austerity. The national statistics again do not show happy reading and Greece looks set to miss a key reform deadline set by international lenders, which may possibly jeopardise further financial aid. But with growing protests in Athens, can a Greek government blame itself or take the populist path saying that it couldn’t live up to the demands of a flawed bailout programme. Its failure to meet targets on reforming public sector by the deadline set by international lenders is not helping matters; on the contrary it puts further financial aid in jeopardy. The stark truth is that the markets are unforgiving and recently 10-year bond yields in Greece traded at 11.64 per cent, up from 11.59 reflecting lack of appetite in Europe as the next three months will be uncertain given the jitters associated with Germany’s national elections in September. Most likely what will happen will be”short-term fudge" designed to accommodate the cash shortage to bridge the gap to after the results of German elections.

Like Hungary, which had its bailout funds from IMF, Greece may have to go begging for more from the three Musketeers – the European Union, European Central Bank and International Monetary Fund (IMF).

Again, it is another game of cat and mouse as the Troika has threatened to hold back a further €8.1 billion of aid unless it meets its bailout obligations, ignoring the pleas by Greek politicians that they are doing their best to kick-start the recovery. Can you blame the beleaguered Greek leaders when faced with mounting social unrest, cuts in civil service employments and trimming of public expenditure? They say in unison that it is hardly their fault and in any case the teeming cluster of over paid Mandarins in Brussels must have noticed the deterioration in the Greek economy that since 2007 was riding a bubble. Panic has entered the equation as the Brussels paymasters signalled that they might not be willing to give Greece more time to meet its reform goals, such as reducing the number of public sector staff or increasing taxes. It has already been accused of delaying unpopular cuts and of reversing others – such as the spending cuts to the state TV broadcaster. Can this result in riots as lenders freeze emergency aid in the coming winter? The German Foreign Minister Guido Westerwelle can give the quick answer – he recently ruled out granting the country a second round of debt relief. Many fear that the cauldron of social discontent in countries such as Hungary, Portugal, Spain and Greece will mirror the popular uprising, which is battering the political fabric of countries like Brazil and Turkey.

In Brazil, protests were not aimed to topple President Dilma Rousseff; protesters wanted the government to change policy. Among the poor in Rio, living in bulging Favelas one shows sympathy with Brazilians in deploring the billions allocated to World Cup preparations while the basic needs of the middle and lower classes are not provided. People want improvements in education, infrastructure and security – more accountability and less corruption. They deplore the direct orders given in clandestine ways to selected bidders for juicy government projects.

It is true that these protests will not be extreme as the Arab Spring uprisings because they simply reflect the anger and frustration of newly empowered middle and lower classes, the same consumers who were the catalysts and beneficiaries of past growth in these once flourishing European countries. Compare the impact of protests (and leaders’ responses) in Brazil and Turkey to the Occupy Wall Street movement, which of late seem to have petered out in strength. Potential large gatherings of violent protesters in ex-bailout countries were triggered by common grievances such as lack of jobs, cuts in healthcare, poor infrastructure and increases in the cost of living (apart from higher taxes). These can be potent ingredients leading to manifestations of larger, systemic grievances by workers spread on a country level even though the street protests themselves are about radically different things, but all of them are about strengthening the rights of the body politic and airing grievances surrounding governments’ inadequate responses to change.

In Europe, there was fear about the spectre of austerity and a eurozone break-up. In Japan it was crushing debt and the Fukushima disaster, whereas in the United States it faced a fiscal cliff, sequester and political gridlock in Washington. To conclude on a positive note, the outlook is now less bleak throughout the developed world but countries in the EU such as Hungary, Portugal and Greece are still foundering as eurosceptics (including the UK) see the eurozone as a fragile experiment that is undergoing treatment in intensive care with surgeons recommending deep cuts and crushing austerity. Yet it is not all doom and gloom as it is no exaggeration to admit that America is rebounding while the developing BRICS countries are riding the crest of a healthy albeit slower growth. Armed with such reflections, can Malta continue to act in denial and this summer throw caution to the wind by indulging in a national pastime of navel gazing while our politicians argue furiously in Parliament as to whether policemen ought to be deployed as part-time waiters when the State organises grand banquets for visiting dignitaries. Your guess is as good as mine...

The writer is a partner in PKF an audit and business advisory firm

gmm@ pkfmalta.com