The final results of the Hungarian general election are out. The governing Fidesz party scored an overwhelming victory. Viktor Orbán, the Hungary’s well-known right-wing populist leader, will have another four years to lead his illiberal regime. It is the first time after the fall of the communism in Hungary when a party will be governing for the third consecutive term. Let’s look at the country’s political landscape and try to find out what happened.
Note: Aron 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
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.
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.
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.
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 Chinese presence in Central and Eastern Europe (CEE) has intensified recently as China’s great power ambitions have grown and the CEE-region has been in dour need of this new partnership due to the economic crisis. However, this relationship is not as new-fangled as it seems. In some cases – for example the case of Hungary – it dates back several decades. Overall, Hungarian-Chinese relations are very successful. They have a six decade history, as old as the PRC itself.
Hungary formally recognized the People’s Republic of China on 4th October 1949. During the following decade the relationship began to develop with a huge number of high-level visits followed by the improvement of economic, political and cultural ties. Although the Hungarian-Chinese relationship was basically within the Soviet sphere of interest, Hungarian foreign policy did not follow, but rather differed a bit from the policy of Moscow. In international affairs Budapest cooperated closely with Beijing and has always supported the Chinese position on Tibet, the reunification of China (one china policy) and United Nations (Security Council) membership. By the end of the 50s, deep ideological differences began to appear between the two countries and, in the wake of the 60s, – during the Chinese “cultural revolution” – the relationship became increasingly colder. Much later, with the reorientation of the Chinese Communist Party in 1978 – its economic reforms and its opening-up policy – the two countries were brought closer together again. The Chinese leadership was genuinely interested in the experiences of the Hungarian economic reform process of 1968 and, in this spirit, a series of expert delegations visited Hungary. In the 80s, state and inter-party relations were normalized and high-level delegations were also reinitiated. After the democratic transition of 1989, the level of contacts between the two countries declined again, primarily as a result of the reorientation of Hungarian foreign policy, as more attention was given to Euro-Atlantic interests. For more than a decade, the degree of contact declined to a minimum.
Another fruitful period began at the beginning of the new millennium, after the visit of the Hungarian Prime Minister, Peter Medgyessy in 2003 to Beijing. The new wave of development was initiated independently by Hungary, because the government recognized that China is an unavoidable player in the global economy and international politics and because EU membership made Hungary more attractive to China as well. But for this purpose, steps had to be taken before others would take them. In this spirit, several confidence-building measures and gestures were undertaken and the results have become almost immediately apparent in the form of economic growth indicators. Over the past decade, the Hungarian government – regardless of political orientation – has committed itself to developing its relationship with China. Hungary has good results in the field of bilateral trade and investment with China. And this has led to greater expectations: infrastructure development and the financing of Hungarian public debt are just some of the areas where Chinese involvement is expected or has already been achieved.
When asking about the reasons for choosing Hungary instead of Poland or the Czech Republic, an interesting hypothesis can be found about the relation of the Chinese population in Hungary to the success of the Chinese-Hungarian relationship. The fact is that within Central-Eastern Europe the highest Chinese population can be found in Hungary. There are now around 10 000 – 15 000 (12 653 officially) native Chinese living in Hungary. And the majority of this population arrived in the early 90s. This is one of Hungary’s biggest advantages when building economic, political and cultural relations with China. Confidence and good impressions are of particular importance in dealing with China. But why Hungary? What made Hungary so popular to Chinese people 20 years ago? In 1988 a Hungarian-Chinese consular agreement – among other things – included the abolishment of visa requirements between the two countries. In 1990, 11 000 Chinese people arrived to Hungary, while in 1992 the number was 27 000. Overall, in the 90s Hungary had a Chinese minority of approximately 40 000, even though in the 80s, the number of Chinese people living in Hungary was only a few hundred. Of course, in addition to the lack of a visa requirement, there were other – economic, political and emotional – factors which pushed the Chinese towards Hungary.
Economic factors:
Political factors:
Emotional factors:
After 1992, the Hungarian authorities re-introduced the visa requirement, so the number of Chinese immigrants has declined. Some of the original 40 000 Chinese people living in Hungary left the country, went home or moved to other countries in the following 5-10 years. But close to 30% have stayed, supplemented over time by a small number new arrivals – for the most part relatives of the Chinese already living in Hungary.
To maintain this advantage and to make Hungary a popular destination for Chinese businesses and investment in the 21st century, the Hungarian Government has undertaken several measures and gestures, including the creation of a new special envoy position within the Prime Minister’s Office for the development of Hungarian-Chinese relations and for the coordination of the China-related work of governmental institutions and the public administration. The first results of the new policy were the arrival of a branch of the Bank of China in Hungary (2003), the creation of the Bilingual Chinese / Hungarian Primary School in Budapest (2004) and the initiation of a direct flight connection between Budapest and Beijing (2004). All of these are unique in the region. There are many other results – a complete list would be too long to enumerate here – including collaboration between the Hungarian and Chinese railway companies, the establishment of a wholesale trade centre in Budapest focused on hosting quality Asian exporters and manufacturers, and the establishment of the China Investment Promotion Agency’s (CIPA’s) European Office in the Hungarian capital last year.
As shown above, there are more and more opportunities in relations between Hungary and China, but also a lot of things still to do to strengthen ties between them. As Barna Tálas, one of the more well-known Hungarian sinologists put it, with a well-coordinated, open and development-oriented foreign economic policy, Hungary has very good prospects to become “Europe’s Hong Kong”,3 namely the international trade and financial centre between the two regions, managing the exchange of goods and information and the transfer of technology and capital, as Hong Kong did earlier in East Asia.
Ágnes Szunomár is a China-expert and Research Fellow at the Insitute of World Economics, Budapest
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.
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.