Ferenc Gyurcsány seems to have learned something from the government's first attempt at reforms that failed miserably, in part because the government didn't prepare adequately, in part because people didn't believe the reforms were necessary. Moreover, the reforms were not structural in nature; they merely tried to make the population contribute financially to services until then considered to be "free": education and healthcare. The referendum that rendered both tuition at universities and co-payment in hospitals and doctors' office null and void had a devastating effect on the government's resolve to introduce reforms. After all, two years had been wasted and only two years remained until the next election. Every savvy politician knows that reforms that may adversely affect the population must be introduced at the beginning of the four-year cycle. So it looked as if experimentation with reforms was over. The government would concentrate on the convergence program and would do its best to reduce the deficit. But then came the crisis.
Necessity is the mother not only of invention but also of courage. It didn't matter how the government counted, the numbers just didn't add up. Because of the recession fewer forints were arriving in the treasury while normal operating expenses remained more or less constant. Moreover, as the forint became weaker by the day the country's substantial foreign debt payments became increasingly expensive. Something had to be done. Fear or no fear, winning an election or not, they had to act. First the government talked about finetuning the structure of taxation: they would take away a bit here, add a bit there. However, in the last two or three days one could hear more and more about "deep structural reforms." The prime minister mysteriously said several times that these "reforms would be the most penetrating and far reaching" of the last twenty years. That is, they will surpass the "package" of Lajos Bokros in 1995. Of course it is possible that Gyurcsány, in the flip side to the good CEO who underpromises and overachieves, is preparing people for the worst and will offer something much less dire. However, there are signs that he may be telling the truth.
Today the Országos Érdekegyeztető Tanács (OÉT) convened. The OÉT is a tripartite forum in which representatives of the government, the employers' associations, and the coalition of trade unions sit down and hammer out agreements to balance out the economic interests of the different groups. The most important discussions are normally about wages. They usually try to set a maximum figure that would be acceptable to all three factions. There are nine organizations representing employers (from farmers to factory owners) and seven trade union associations. Every year both the trade unions and the employers' association elect a president. This year the trade unions chose János Borsik, head of the Autonomous Alliance of Trade Unions (Autonóm Szakszervezetek Szövetsége), while the employers elected Tamás Nagy, head of MOSZ, the association of agricultural cooperatives.
Last year the OÉT agreed on a modest salary increase. Today they had a more critical agenda: to accept ground rules for a national compact (nemzeti megállapodás). In plain English, the trade unions would not go against the reform plans and the employers would also be satisfied with perhaps less than they originally demanded. From the immediate reports it seems that the prime minister managed to convince these very influential groups to support him and his government in the introduction of some hitherto unacceptable changes. From one of the interviews with Tamás Nagy I got the distinct feeling that Gyurcsány was quite specific about the government's plans, but the participants are sworn to secrecy. It will be the prime minister who will reveal all the details on February 16, the first day of this year's parliamentary session.
What did Gyurcsány, with János Borsik and Tamás Nagy standing by his side, say to the Hungarian people? He reiterated that "political warfare must come to an end" and instead "there must be a national compact among all representatives of society." The goal is to create a social and economic program for the next three or four years. They want to work out a clear road to the introduction of the euro in such a way that at the same time the number of active workers would rise and thus the country's economic development would be assured. Tamás Nagy reiterated that all three sides recognized that for the country's healthy development new ideas are necessary. They all are ready to abandon the strategy followed up until now. They are ready act together. János Borsik emphasized that the trade unions are ready to support the plan of the national compact because they cannot risk the loss of jobs and they consider the government's plan the only assurance to save the workers from a very uncertain future.
This development is fascinating, especially in light of what Tibor Navracsics said a week ago. According to Navracsics, Fidesz is willing to cooperate to solve the problems of the country. But their partner is not Gyurcsány and his government but the Hungarian people. It seems that Gyurcsány was a bit quicker again. In fact, József Orosz, anchor of Kontra at KlubRádió, asked Borsik whether they didn't think that it was necessary to talk to the "largest opposition party"; the answer was that it was not their job to initiate such a discussion.
In addition to the national compact a decision was made to set up an office to target political corruption, especially egregious on the local level.
The initial Fidesz reaction to the news was rather clumsy. András Cser-Palkovics, associate spokesman of the party, issued a communiqué according to which "nobody can take seriously the anti-corruption promises of a politician whose company received electricity for some unknown reason cheaper than others and in whose enrichment public money paid a serious role." The electricity story is most likely bogus. As for Gyurcsány's road to riches: he was a talented, well-connected entrepreneur who took advantage of business opportunities. No more, no less. István Balsai, whose brainchild it was that the government offered the Holy Crown as collateral for the European Union's loan, returned to his usual strategy: let's say a few things that might spook the whole country. Whether true or not doesn't really matter. He held a press conference and announced that "in the material prepared by experts for the so-called reforms" there are plans to scrap the thirteenth-month pension, freeze child support, and shorten the length of the "new mother's" stipend. Gyurcsány assured everybody that these suggestions didn't even come up. However, Balsai insisted that these plans were for real. He claims that experts presented these plans for consideration. Of course they did. After all, the government solicited opinions from all quarters, and we have heard these ideas before. The question is what recommendations the government considered in its deliberations. That we don't yet know. In any case, employers and employees are behind Ferenc Gyurcsány and his government, and that is a real plus.