Political Risks in Hungary and Central & Eastern Europe
Political Risks in Hungary and Central & Eastern Europe

Summary/Abstract: In the present study we will use a risk assessment method designed by Vision Consulting Budapest to review the situation of Central and Eastern European countries. We do not believe there is a general risk factor that affects all participants equally. Risk is a relative term; what constitutes risk to some may signify hope or opportunity for others. This is why the subject of risk must be specified in all risk analyses. Since Vision’s most important partners are pre-eminent players in the commercial/business sphere, our model weighs political risk primarily and expressly from the perspective of economic decision-makers. Our opinion is that models that rely exclusively on quantitative methods are inadequate for measuring risk. Rather than composing indices on a technical basis, we believe in methods that rest on analytical knowledge and insight. We strive to determine the risks pertaining to a given political system through a consensus of our analysts. We analyze political risks in eight categories: predictable political events; the possibility of unexpected change; legal security; foreign and security policy risks; public policy alternatives; the role of economic rationality; functionality and governability; and the legitimacy of the given political sphere.1 Subsequently we assign one of fifteen ratings according to the level of political risk, where “A+” denotes the lowest possible risk and “E-” the highest. The basis for the current study was provided in part by Vision’s Eastern European risk assessment, which we published on 28 April 2008.2 Our analysis here deals primarily with Hungary’s political risks, since – as a consulting institute in Budapest – this is the subject area in which our knowledge runs deepest. The underlying analysis of the Hungarian situation was published in April 2008, during the government crisis.

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