A story of a renewal gone terribly wrong

in Politics by

NoteAron A. Nemeth wrote an interesting article on the developments in Hungary a month ago (Troubles with Viktor: Latest developments in Hungary). Writing from a different perspective (he is a native Hungarian), I do feel that there is a lot of reason to worry about the state of democracy in Hungary and after recent changes made to the electoral rules (electoral districts were changed to give Fidesz a bigger advantage) and the curbing of the freedom of speech (such as banning newsportal index.hu from reporting from inside the parliament), Hungary is heading down the path of authoritarian countries, leaving the circle of democracies in Europe.

Introduction

It is a twist of history, the most cruel one imaginable maybe, that a former Communist dissident would turn a democratically ruled country into an authoritarian regime. It is even more ironic if such a regime change should happen within the borders of the biggest democracy promoter in the world.

Unfortunately, this is exactly what is happening right now in Hungary, one of the countries that joined the European Union in 2004. The person in question is the country’s Prime Minister, Viktor Orbán, the man who let Hungary into NATO and promised fundamental changes and a clear break with the past in Hungary.

Since Orbán’s Fidesz party has won the majority of the votes in the 2010 election and ousted the disgraced Socialist government under Prime Minister Gordon Bajnai, who had replaced Ferenc Gyurcsany after the “lies-gate” in 2009, Hungary has undergone a radical change. The party that ran a virtually non-existent campaign by simply distancing itself from the Socialists, has since last April changed the Constitution of the country, declaring the country to be simply “Hungary “instead of the “Republic of Hungary”. It has curbed the authority of the Constitutional Court and removed its competence to rule in questions related to the state budget. It has also adjusted the constituency borders to give itself an electoral advantage over other parties in future elections. Fidesz has nationalised the pension fund and imposed a new media council, staffed with Fidesz cronies, to supervise media outlets. Currently, close to 80% of all media is considered to be Fidesz friendly. Critical outlets, however, such as the popular Hungarian newsportal index.hu have been banned from reporting from inside the parliament building after a satirical take on the government at the end of the year. Last but not least, the government recently decided to impose its authority over the National Bank, thus effectively removing the independent financial supervision in the country. Orbán plans to merge the National Bank with the Financial Regulatory Authority and would thus give the government direct control over the institution.

Hungary on Russia’s path

All this sounds strangely familiar, though recollections of such incidents happening in a democratic country are rare and do not come to mind. It is a very different case when one thinks about the beginning of various authoritarian regimes, and ironically the example of Russia easily comes to mind. Under the presidency of Vladimir Putin (2000-2008), Russia’s government centralised power over all major political bodies, such as the Duma (parliament) which nowadays can hardly be considered to control the government, or the Constitutional Court, which has repeatedly ruled in favour of the government and has been called corrupt and incapable by some of its own judges (see here in Spanish and here in English, and in a very disturbing book by the late Anna Politkovskaya).The media are controlled by the Kremlin and major companies have been brought back under control, often without the consent of their owners. Powerful oligarchs, such as Berezovsky or Chodorkowski ended up in exile or jail, their companies – oil companies Sibneft and Jukos and media outlet ORT, were either nationalised or dismantled and sold off.

The European Commission has repeatedly criticised Russia for its lack of democratic rule and the violation of human rights. When Dmitry Medvedev was elected third President of the Russian Federation, European leaders were hoping that reforms would turn the country into a more democratic country. However, Medvedev has failed to transform the Russian political system. A democratic Russia seems to remains a vision for the distant future.

Back in Hungary

Support for the government has been falling rapidly recently. Only 16 per cent of Hungarians still back the government. More than 80 per cent think the country is heading in the wrong direction. The national currency has been losing around 15 per cent of its value in the past few months. For the second time in a decade the country needs international help to solve its financial problems, provided by the IMF and the EU. However, the situation differs from 2008, insofar that the country’s financial institutions are considered to be no longer independent. The IMF and the EU have announced they would not continue negotiations about a new loan if the government does not loosen its power grab on the National Bank. Hungary might need around 20bn euros, which strengthens the position of the EU and the IMF to force the government to give up its authoritarian campaign.

Even though it seems unlikely that Orbán will admit that the EU still holds certain power over the country’s politics, the government does not find itself in a good position. It has been milking the population with new taxes, international companies are considering moving their assets abroad and the population lost its faith in Fidesz. The country’s credit rating was downgraded by all major rating agencies to “junk” status.

In this situation the country will eventually need help from its European partners. This position of weakness should be exploited by the EU to ensure Hungary returns to the path of democracy. A total overhaul of the changes is not possible but at least the government’s attempts to bring under control the National Bank could be reversed.

This would be a first corrective step. Hopefully it will be the first of many. It would be good for Hungary and the EU. Only a functional system of checks and balances (and this also includes non-classic actors such as the Hungarian National Bank) will ensure democratic rule, a prerequisite for membership in the EU. In the long run Hungary will need the support of its European partners even more to succeed in the international system. The EU, too, could benefit from Hungary, its skilled labour force, its inventors and entrepreneurs

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