Troubles with Viktor: Latest developments in Hungary

Viktor Orban with the Hungarian flag on the backgroundOnce 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.

The inconvenient truth

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.”