The massacre in Paris on 7 January that was committed by the Kouachi brothers and another individual, took the innocent lives of several employees of the well known French satirical magazine, Charlie Hebdo. The act is both inconceivable and disgusting, as were those previously carried out in Madrid and London. Radical Islamism had once more reached the soils of Europe, our home. However, despite many baseless arguments, the real problem is not with a religion, rather it is with blind-sighted political correctness and the prevailing zeitgeist that poisons our continent and the Western world.
Once a genuine liberal democrat, Hungary’s prime minister Viktor Orban is slowly tightening his party’s grip on the Parliament and with it on his native country as a whole. However, Hungarians are a persistent bunch and they proved to the world many times that in the long run, it is them who hold the winning cards. This means that if Mr Orban and his Fidesz party will continue to neglect the rules of democracy they will loose badly, very badly.
One of my earliest pieces on this webzine was about the horrible state of social democracy. Back then I argued that without reinventing itself, this political family and related parties will sooner or later disappear as they do not have answers to present day problems. However, I noted as well that right-wing parties and their leaders are also ponderous when it comes to current affairs. So the only thing that they have at the moment is that they have not screwed up like their fellow left-wing contempories. From the UK Labour Party to Spain’s PSOE and Hungary’s MSZP most of Europes socialists had fallen from government benches into opposition, paving the way for the conservatives.
Exactly the same happened here in Hungary. The socialist government of Peter Medgyessy (2002-2004) and later that of Ferenc Gyurcsany (2004-2009) destroyed everything that the country had achieved after the peaceful regime change of 1989. Between 2002-2009 Hungary was one of the first EU member states that applied for EU / IMF emergency funding (to avoid a financial collapse), its public debt was sky high, public spending rocketed up and bigger and bigger corruption cases unfolded each month. Due to this, the country finally raced down to the bottom when compared to its regional neighbours. Of course, after this it was not a huge surpise that center-right Fidesz with its leader Viktor Orban was elected to form a new government with an exceptional two-thirds majority which allowed it to change everything it wanted from the constitution to street names.
A bus that was missed
Needless to say that the left-liberal intelligentsia (politicians included) was worried from day one that Fidesz will create a nationalistic, anti-EU, anti-western fortress on the debris they too were responsible for. Without going into too much detail, no one can argue that well known and respected Hungarians (sympathethic to the left) had ever written lengthy articles in local or foreign newspapers complaining about the state of Hungarian democracy under socialist rule. So it is a bit shameful, to say the least, that now most of them are urging their right-leaning counterparts to do so. Mind you, the problem is not that they are asking them to act, the problem is that in the light of the last ten years they have absolutely no moral ground to do so. If they had pointed out the problems of the previous government, that would have been a different story but they had not and with this, an important bus was missed in the life of Hungarian democracy. A case of a double standard, to put it simple.
Troubles with Viktor
I believe that the recent political developments in Hungary can be analysed from two, not so distinct viewpoints. The first and more simply view is that Mr Orban and his party is acting the way they are because of defiance and vigour. They think that with a 2/3 majority they can do whatever they like and they can punish their left-wing counterparts according to their own medicine of the past couple of years, sidelining arguments from the opposition, the EU, the IMF and European and American intellectuals. Orban & Co. already changed the constitution, created a new electoral law, curbed the latitude of the independent judiciary, set-up a new state agency which oversees the entire media, it approved the financial stability act (e.g. enshrining the flat tax into the constitution) and promoted many party apparatchiks into high offices in public companies and institutions, all in t he government’s favour. Can they really do this? Yes, they can. Today, Fidesz is the single most important party in the country with an outstanding electoral mandate that was won in a peaceful and legal election. Is this morally or democratically right? Not if you ask me as a new government should be respectful to its opposition, especially with a mandate like this, because luck will not always be on Fidesz’s side.
Apart from the sole use of political force, the other and more significant viewpoint that I find interesting in Hungary’s and Fidesz’s case is the personality and character change of Viktor Orban. Back in 1989, he was a young liberal democrat who wanted to change everything that was bad in the system. He was eager to support democracy, he was fond of western ideas (e.g. like free media) and political behaviour, and he despised corruption, nepotism and state controlled public institutions. However, 20 years after the fall of socialism the former hero of young Hungarians resembles more an ailing and tired socialist from the 1980s than a true democrat. So the biggest problem with Mr Orban in my eyes is not – according to the left-leaning journalists – that he is destroying the institutions and laws of ’89 but the fact that he once fought for the creation of all this.
Nomen est Omen
To sum up all that was said, it is reasonable to say that Hungarian democracy is not in its best shape; to tell you the truth, I personally think that it never has been, but none of the western democracies are perfect either. Nevertheless, those who argue or think that Hungary is heading towards some kind of a dictatorship are wrong. Firstly, because important democratic values still exist, like freedom of speech or the right to vote. Of course, in the long run Fidesz could abolish these as well, but at the moment everybody is able to vote for whoever he / she supports and everybody can write / say anything without a lengthy jail sentence or a brutal police raid. Secondly, Fidesz was elected in a clean election so it is also possible to unseat them democratically in the next elections. And thirdly, the West (e.g. EU, IMF, US) will always be able to lead Fidesz back on the right track because Hungary is in short supply of friends and even more so: of money.
The only concern that I have, as a young Hungarian, is that the time is fast approaching when both left- and right-wing parties will be unelectable from most of the Hungarian electorate’s perspective and that will be the real problem for this particular Central European country.
While the ongoing financial crisis slowly destroys the dream of Jean Monnet, the chief architect of the European Coal and Steal Community (i.e. the predecessor of the European Union), more and more European leaders and parties turn to populism rather than pragmatism when talking about the future of the Union. In this regard, clearly Hungary’s PM, Viktor Orban and the UK Conservatives are among the ones to watch.
The United Kingdom, to put it mildly, was never a keen proponent of the European Union. This is even more true when one talks about the UK Conservatives. (A funny fact though is that the country joined the European Community under a conservative PM, Edward Heath.) But since then the British right has been trying its upmost to force the UK’s departure from an Ever Closer Union. Of course, it is obvious that their efforts were not successful. However, it would be foolish to say that their ideas and beliefs did not resonate with the British public; because, quite frankly, they did very much! To take just one notable example, last week The Daily Telegraph published Mark Pritchard’s (conservative backbencher) intriguing article on the EU, showing euroscepticism at its best.
In it, Mr Pritchard derives two important conclusions: 1) the UK should leave the European Union because it effectively occupies Britain and thus destroys its national sovereignity; and 2) the EU forces British tax payers to finance debt-riden Greece and other Mediterranean member states. Mr Pritchard thinks that his explanation and conclusions are credible but in my view, they are not. I am not saying that he is wrong in everything what he says. For example, I can surely support the UK conservatives when they say that the EU is running a huge democratic deficit and because of this, clearly, it is sometimes out of touch with the problems of its citizens. But to say that the EU is occupying the UK and that British tax payers are handing out money to lazy Greeks is simply not true. First, the UK is not financing Greece because it is not included in the European Financial Stability Facility. Second, it is not loosing its sovereignty because of the EU, it only looses it because it voluntarily joined the Union back in the 1970s.
It is also worth noting that many well known anti-EU MPs (like Daniel Hannan) are saying that UK exports to EU member states can be replaced by exports to booming emerging markets. In fact, this particular explanation is false as well because EU exports cannot be substituted with emerging market exports: just consider that the UK’s trade volume with Ireland alone is bigger than with the BRIC countries combined. Notwithstanding that, it seems to me that British politicians will never be sympatethic to the EU, even if the facts (all of them) would lie on the EU’s side. Quite interestingly, however, a ComRes/BBC2 poll published in the latest issue of Total Politics, a British current affairs magazine, found that 55 per cent of the UK public supports the countries membership in the EU. Ooops.
Now let us turn our attention to Hungary and Viktor Orban. Formerly a liberal leaning politician, now turned conservative, Mr Orban is one of the key bashers of the EU on its Eastern borders. Hungary’s PM was not always like this as his anti-EU rethoric only emerged during his period in opposition (between 2002-2010); before that, he was a champion of EU / NATO membership. Of course, one can say that politics is not for the faint-hearted. But I believe, most of todays problems on the EU’s side is largely caused by a helpless European political class, painfully short of politicians who are willing to act, and willing to tell the truth to their citizens. In this regard, Mr Orban is no exception because he is trying, like many of his counterparts, to blame all the problems of his country on the EU and the previous (Socialist) government. In the latter case, he is quite right. But in the former, he is wrong. Firstly, because Hungary’s existing economic and political agony is also caused by the mismanagement of the current cabinet (i.e. they do not have a clue how to solve the previous government’s fault or if they do, they are hiding it from the public eye). And secondly, because putting the blame on the EU only makes Hungary look bad as everybody knows that we, not Brussels screwed it. So one can only ask EU leaders for less populism and more pragmatism, because without it, they may well destroy a peaceful future that Jean Monnet tried to build for us all.
After the first European bail-out, which did not leave much of an impact on the tragic economy of Greece, the second package is already en route to the country that is helplessly balancing on the brink of collapse. But if one forgets about tiny troubled economies of the European Union, like Portugal, Ireland and Greece, nobody would / should really care about the euro or the future of the euro zone because the collapse of these countries would not make such a big difference, the EU could move on. However, new developments in Spain and especially in Italy, one of the biggest members in the Eurogroup, reinforce the belief that without leadership and strong commitment the euro will eventually sink and the whole idea of the EU will come under question.
2011 can easily be the decisive year not just for the Italians, the Greeks, the Irish, the Portuguese and the Spanish, but for the whole Europe. We now know that smaller and economically weaker states such as Greece, Ireland and Portugal may well fall into default. But we also know and hear that while their collapse would be a serious blow to the European Union, it would still not make the euro history. Leaders of the Eurogroup and the Union know this, and in my view, that is why they are completely reluctant to get their acts together and decide about the faiths of these countries. However, Spain and Italy are playing in a different league than the states mentioned beforehand. Should these two fail to pay off their debts, European and international markets would simply plummet. Of course, this means that the EU cannot let Spain and Italy behind with their problems!
Nonetheless, I believe that the trouble of Southern Europe provides a one-in-a-lifetime opportunity to both more disciplined member states and the rest. Firstly, countries like Germany, the Netherlands, Austria or Finland that are frustrated about helping out weaker states with their own taxpayers money could force EU counterparts to act more responsibly and more seriously with public finances. It may sound populist, but the carrot-and-stick policy (i.e. we give you money if you change the system as we, the majority, advice you to) could may well work in case of South Europe. Secondly, politicians with clear programmes in Italy, Greece, Spain, etc., who were previously either sidelined or simply did not have the appetite to take part in the shady business of current political elites can now stepin and change the faith of their respective countries. Of course, it is always easier said than done, but there is absolutely no way that there would be no capable people to live up to popular expectations. And thirdly, it will finally turn out whether the euro area is a rich country club where only financially conscious and successful states can flourish with no room for others, especially troubled ones, or a common EU-project where everything rests on solidarity and trust. In theory, it should be the latter, but in real-life, I think the first applies!
I am pretty sure that many people do not, cannot and will not agree with me on this, but still, I feel that there is no room for countries like Portugal, Greece, Ireland, Spain and Italy in the Eurogroup. There should neither be any room for anybody else who cannot comply with EU rules and regulations (oops, in that case there probably would not remain a single country in the euro area) or who cannot function responsibly when it comes to public finances. Yes, of course, this means that there would be only a handful of members in the euro zone (Germany, Austria, the Netherlands, the Scandinavians and let’s say, Luxembourg), but who cares, at least it would not be obligatory for German taxpayers to help out Greeks and also, it would not be a must for George Papandreou to follow EU demands while saving his country. Do not get me wrong, all-in-all, I think the Euro is a great achievement and a solid currency that should be used across the Union, BUT, only with care and a sound understanding of what can happen when something goes wrong, because in the end, something always goes wrong!
Christine Lagarde, the French finance minister, was yesterday chosen as the new head of the International Monetary Fund after Dominique Strauss-Kahn, a fellow Frenchman, stepped down from the post earlier last month, due to sexual-assault charges. While many highlight the fact that Madame Lagarde is fluent in English and well-respected in the world of politics, some publications, like this magazine, think that this is not enough for the IMF’s top job and feels deep disappointment by the decision taken by mostly European countries, the US and China.
A good one and half month passed since the resignation of Dominique Strauss-Kahn, the former head of the International Monetary Fund, who is now facing a possible 20+ years in prison for alleged rape. Of course, mainly because of this no one can praise Mr Strauss-Kahn on the personal level, but on the professional side, the facts lie with the former boss. Firstly, because he was actually an economist (Université Paris X); and not a bad one either. Secondly, because under his leadership the IMF regained its long lost reputation as a credible international organisation. Thirdly, because world leaders listened to his arguments. And fourthly, because he had more than 30 years of political experience under his belt. So it should not come as a surprise that these achievements (and professional legacy) are hard to level, especially for Christine Lagarde, the current French finance minister, by far the least qualified alternative from the two managing director aspirants. Why?
First of all, almost all the other serious candidates (Agustín Carstens from Mexico and Stanley Fischer from Israel) were Central Bank chiefs in their respective countries; both men were former IMF employees (deputy heads of the organisation); and both were trusted economists, Carstens received his PhD from Booth School of Business (University of Chicago) and Fischer received his from MIT, that is, from two of the leading business schools in the world. In this regard, Madame Lagarde has no Central Bank experience, no IMF experience and no PhD (or any other degree) in economics. That is why I strongly assume that nine out of ten people would not recommend her for the top job at the organisation because she is simply not fit for it. In my view, the managing director of the IMF should have a genuine background that both Mr Carstens and Mr Fischer (as well as Mr Strauss-Kahn) possessed. So what exactly has Christine Lagarde compared to the above mentioned two credible contenders? 1) French passport; 2) EU citizenship; 2) Good connections. And that’s about it!
It would be, however, somewhat unfair on my side to totally sideline Madame Lagarde’s valuable skills and professional experience. Before becoming a politician the French finance minister studied law (specialising in anti-trust and labour) at Université Paris X (where Mr. Strauss-Kahn obtained his PhD in economics) and also political science at Science Po (Aix-en-Provence campus). She was head of Baker & McKenzie, an international law firm, for 5 years; she was the first woman to hold this position. And from 2005 onwards she was Minister of Commerce and Industry (2005-2007), Minister of Agriculture (2007) and Minister of Finance (2007-2011) in the UMP-lead French government. Needless to say, this is a very impressive career by any standards. However, I firmly believe that the appointment of Christine Lagarde as the next head of the International Monetary Fund was and will be, a grave mistake.
In support of my argument I now enlist four reasons on why Madame Lagarde is unfit for the job. Firstly, she is not an economist. Of course, it is not carved in stone that leading pre-eminent financial institutions in the globe requires a sound understanding of economics but I think, it would be better and more reassuring to know that the managing director of the IMF can decide important matters alone without the help of aides. Secondly, the argument of most European states that a European should manage the IMF because of the ongoing financial crisis is utterly flawed. Precisely because of her nationality and heritage Madame Lagarde will not be objective when dealing with the European continent; whereas an IMF head should focus on the global implications of a crisis and a decision without any positive or negative bias in either ways. Thirdly, the new head of the IMF might soon appear in court due to her alleged involvement (abusing office) in the Bernard Tapie case. And fourthly, we are living in 2011, not 1945, so it absolutely unacceptable that the IMF and both the World Bank and the UN resemble an almost ancient regime, in which the developing world does not have any say. Or as Martin Wolf, associate editor of the Financial Times, rightly noted in his article about a month ago: „Regimes that do not bow to the winds of change get blown away. The Europeans need to recognise that truth in time. They will not do so. But it will prove a big mistake.”
The country which by many experts was once regarded as the economic powerhouse of Central Europe has stopped growing. Newly published data by the European Union’s statistical body, Eurostat, clearly show that in the last 7 years Hungary’s GDP (when compared to the EU per capita average) has almost started to stagnate. This means that with an average growth rate of 0.8 percent, Hungary is now among the worst performers both in its region and within the EU27.
Slightly before the accession, in the early 2000s, Western European financial experts were praising Hungary, labelling it is as the economic front-runner of Central Europe, for its huge efforts to comply with EU regulations and difficult economic tasks. One cannot stress this enough, but it is still unbelievable, even after a good 20 years, that former communist countries of Central and Eastern Europe – all of which were centrally commanded economies – have managed to make it to the European Union and NATO. However, political mismanagement, low productivity and the lack of privatisation potential (since their independence, most CEE countries privatised everything they had to raise money for developments) marks the beginning of the end for these smaller economies. It is now obvious that without a clear vision, a well structured financial plan, and a strong political will to get things moving, the former communist countries of CEE face a Greece-style collapse. Of course, there are some notable exceptions in the region, like Slovenia, the Czech Republic and Slovakia, all of which are steadily heading towards reaching the EU’s average GDP per capita. In the case of the two former ones, this means that they are behind the EU average by an estimated 10 – 20 percent, in the latter this average is about 25 percent, and in the case of Hungary, the former front-runner, well, 35 – 50 percent. It is true, however, that the Czech Republic (previously) and Slovenia (nowadays) are experiencing some financial difficulties as well and yes, it is also true that most countries in the region are not as stable as, let’s say, the Netherlands or Germany, but still, the prospects of these countries are relatively positive, especially when compared to neighbouring Hungary.
Tempting as it may seem, blaming solely local politicians and prime ministers, such as Péter Medggyesy, Ferenc Gyurcsány or the acting Viktor Orbán, for the problems of the country, is a bit hypocritical. Firstly, because only we the citizens elect politicians to their office. Secondly, because only we the citizens can change governments. Thirdly, because only we the citizens can protest or formulate ideas and opinions that can destabilise governments that are taking the country on a wrong track. And fourthly, because only we the citizens can create new parties and new civic movements that can replace the old and static political parties of the past. Nevertheless, despite that politicians should be and are accountable to their voters, even then they can screw up a lot of things; which they usually do. And precisely because of this, Hungary is now at a place where her politicians took it. Certainly, in this, MSZP’s (socialist party leading Hungary between 2002-2010) role is critical. I would even dare to say that its role and political leadership is the main factor why Hungary is now lagging behind its neighbours. Since according to these fresh statistics from Eurostat economic growth stopped during MSZP reign, notwithstanding whether its politicians like it or not.. But irrespectively of these facts, centre-right FIDESZ is also responsible for the state’s financial health. Mostly because their policies rely only on blaming the socialists for the country’s problems, without formulating a credible alternative or idea to change the currently horrendous economic situation.
Of course, most Hungarians are now laughing at Greeks, believing that despite visible growth and positive financial developments, the Hungarian government is firmly leading the way and because of this a southern style collapse in the middle of Europe is highly unlikely; especially since „we had shaken off the chains of the IMF.” But sadly, in my view, the ones who think in this way are wrong: the worst is yet to come for Hungary if we do not get our act together soon.
In the last few months I have found myself constantly bumping into articles that speak of the dawn of social democracy and with the observation that precisely because of this, we are facing a new conservative (i.e. centre-right) modern age in Europe. I would argue that it is too early to call a clear winner because European political conservatism, championed by centre-right parties throughout the continent, is in fact in deep trouble as well.
Left-leaning authors across Europe are voicing their concern that social democracy is dead, for good. Well, to be honest, I hope they are right! But contrary to what you may think now, my desire rests more on the possibility that maybe this way centre-left parties and their leaders will reconsider their parties’ role and vision for the 21st century and somehow they will try to update their views to an understandable and socially useful level. Of course, most of you know that social democracy stands for a bigger state, social security, free trade, multiculturalism etc. or to put in simple terms, as some neoliberal right-wing bloggers usually do, it worships devilish capitalism which helps multinational companies to run the world. But I would say that there is so much more on the Left that it is insane that only a handful of people thought about making social democracy modern again (like Anthony Giddens with Labour’s Third Way but we know what was the outcome of that), like it was after WWII. As far as I am concerned, after the Second World War social democracy helped us to rebuild our continent from ashes. It created societies where people can learn, grow and earn their way into a more promising feature.