Pension Glut Lies at Heart of Crisis Wracking Hungary

The Wall Street Journal reports:

Hungary, a nation of 10 million, has three million pensioners. Besides writing checks for regular retirees, the government gives special benefits to accident victims, the disabled, military and police veterans, mayors, widows, farmers, miners and "excellent and recognized" artists. The average Hungarian retires at 58, and just 14% of Hungarians between 60 and 64 are working, compared with more than half of Americans.

Hungary's pension obligations are helping to remake the country's politics. On Tuesday, former Hungarian central bank governor György Surányi emerged as a preferred candidate to replace Prime Minister Ferenc Gyurcsány, who announced on Saturday that he would step down amid battles over spending cuts.

Hungary has run fiscal deficits for years to pay for social programs, and its annual tab for pensions now surpasses 10% of its gross domestic product. The government had sold bonds to finance these outlays. In October, investors stopped buying them.

No word yet from AFSCME on this one.