What we know about the current Hungarian situation

In a way I would prefer to continue my short biography of Ferenc Gyurcsány. But I have the feeling that my readers would prefer to hear about current events and short-term predictions rather than the 1980s and Gyurcsány's student years in Pécs. (I'll return to that on a slow news day.)

I'm trying to avoid passing along every rumor that reaches the ears of a third-rate reporter and then is sold as hot news. Most of these stories sound unlikely if not outright unbelievable. The reporters also seem to have a penchant for trying to create panic by outlining scenarios that all predict the certain failure of a smooth transition from Gyurcsány to Bajnai. Both SZDSZ and MSZP are fractured (true enough), so there won't be the necessary votes for Bajnai to become prime minister of Hungary (wrong). The problem with this scenario is that we know the exact number of SZDSZ members who voted against Bajnai. I reported on that yesterday. We also know that out of about 120 members of the MSZP caucus present at the Sunday meeting only four abstained and one didn't vote. Even without the members of MDF who, by all indications, will support the constructive vote of no confidence Bajnai should be fine. So what's the problem? One has the feeling that Hungarian journalists love chaos and trouble. Then perhaps they can write more riveting articles about the impending doom.

Since I'm not trying to sell papers or write episodes of The Perils of Pauline, let me outline briefly the pieces of information that seem credible. (1) Ferenc Gyurcsány decided to resign as party leader when it became obvious that the candidate for the post of prime minister would come from the inside. Two names were mentioned, the first a member of MSZP and the second politically unaffiliated–József Gráf, minister of agriculture, and Gordon Bajnai. If Gráf were to become the candidate Gyurcsány would resign because in his opinion the posts of prime minister and head of the party should be held by the same socialist politician. In Bajnai's case he would resign because they are close friends; if he remained the leader of the party it would look as if he were the puppetmaster and the new prime minister the puppet. (2) Currently there are two serious contenders for the post of chairman of MSZP: Ildikó Lendvai and Péter Kiss. But the field keeps widening. Imre Szekeres, minister of defense, is another frequently mentioned possibility. Kiss says he would accept the nomination but suggests Lendvai. Lendvai says that she would rather stay on as head of the MSZP parliamentary delegation. She claims that she is no good at administration. Next Sunday the nominating congress will have to make its decision. (3) For me the most interesting piece of news today was János Veres's revelation that Bajnai's austerity program is practically the same as the one he and his ministry worked out at the end of January and suggested for immediate acceptance. At that point he didn't get the nod from either the cabinet or the parliamentary caucus. In fact, Veres claims that he had already outlined his plan last summer at an MSZP retreat at Dobogókő. Not only did his plan get rejected only to resurface with a new advocate heading a new government, but it seems almost certain that he will be replaced as minister of finance. A new government, an old/new economic plan, a new minister of finance. (4) According to information the media received (which might just be part of the rumor mill) Bajnai is already talking about personnel changes in the cabinet; at least five people will be leaving.

And finally. What will Ferenc Gyurcsány do once he's no longer prime minister and head of the party? He made it clear that he is committed to continuing his political career. Although he said that he will remain a member of parliament, surely being an ordinary back bencher is not exactly Gyurcsány's style. One conceivable scenario was that if Ildikó Lendvai becomes chairman of the party then Gyurcsány could head the caucus. But no. Gyurcsány rejected that as well. He did, however, mention a position he would like to occupy: heading the Táncsics Mihály Alapítvány, the theoretical think tank of the socialist party. Here I'm speculating, but let me suggest what Gyurcsány has in mind. He is planning to work on making MSZP a truly social democratic party that would meet the challenges of the twenty-first century. A party of which he would be the logical head.

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whoever
Guest
I enjoy reading this blog and I feel it adds to knowledge of Hungarian politics. But you seem pre-occupied with the same names, and transfixed by the often rather dull personalities involved. Gyurcsany- self-made man – more interesting than most. But who would be interested in long biography of, say, Istvan Hiller, Meszterhazy, Lendvai or Laszlo Kovacs? These people are apparatchiks. The historical equivalent is that of gossip in the Royal Court – it’s not journalism with a basis in the real world. I’m going to make an assertion here. The MSZP isn’t going to be re-invigorated by Gyurcsany as a social democratic party, as Gyurcsany has a limited and somewhat mistaken understanding of what a social democratic party actually is, in its entirety. Not only that, but PES parties in the EU are in crisis. The only ones succeeding are those with elements of populism (Fico) or with enough savvy (Zapatero). Gyurcsany, despite what you write, has two left feet when it comes to politics. He’s clumsy and unoriginal – and I have to add – he’s still one of the more capable MSZP politicians! He won’t be able to revivive them on his own, because his foundation is… Read more »
Gábor
Guest
I won’t be so sure that journalistic pieces highly unbelievable at the fist sight has no serious factual background in this case. They are only distorted ones, because what we saw in the Hungarian press these days – first of all in the electronic one – is nothing else than the classical deliberate manipulation, sometimes unintentionally from the author him/herself. As I tried to outline elswhere (even though only as a possible “narrative”) this was the case already at the beginning of March after the informal EU summit. I have the extraordinary situation to have first hand accounts from many of the events covered in the press through those hysterical pieces and I can compare the two. I’m convinced that especially Hírszerző publishes manipualtive articles on what happened in Mszp bodies and the priamry suspect is Szekeres behind these actions. The core is always factual (conflict in the caucus session, conflict in the presidency etc.) but the bad guy is always Gyurcsány, portrayed as a maniac of power, who – astonishingly – always confronted with Szekeres or his allies. He surely felt himself as party chairman Saturday evening, but in three days he has to face serious contenders.(Szekeres seems to… Read more »
Mark
Guest
Gábor: “And he should be more open to the idea that the problems of the east – as they are common ones and not national – and not only those of the crisis, but the long term ones, can only be resolved according to leftist principles if it is a soultion on a European level and not a national one.” As I’ve said before the “third way” in a country like the UK was never really – despite the rather shallow books of Giddens – a political programme. It was really about allowing a Labour government the political space to consolidate the post-Thatcher neo-liberal order after a period of some pretty shocking election defeats (the most traumatic of which was the unexpected one in 1992, when a “minimum” social democratic programme failed at the ballot box in the midst of recession). Therefore it had three core elements – (1) no change in the “Thatcherism lite” economic and social policies pursued by John Major, (2) the manipulation of the intellectual left through social liberalism and several symbolic cultural measures, and (3) the manipulation of the working class vote through the adoption of right-wing populist rhetoric and policies on immigration and law-and-order.… Read more »
Gábor
Guest
Its an interesting reaction as it has nothing to do with the quote from my earlier one. 🙂 I meant that in the long run I see no possibility to deal with such fundamental problems like the population ageing and decline and the sustainability of the social systems on national level. (Ok, immigration is a possible choice but neither in Hungary nor in many CEE countries would the population easily accept it, whether I personally like the idea or not.) And not only these processes are problems, but the integration of Europe as well. As traditional social systems are based on the assumption that the new generations carrying the burden of caring for the older ones will remain at home the free migration of labor undermines it from a national perspective. I do not want to reverse the integrartion, quite the contrary, I would be eager to embrace a more federalist one as well. As for the leftism in Hungary, I’m not a fun of traditional leftism even if I’m ready to buy some of their perceptions, for example the importance of the role played by these countries in the European or world economy. Not becasue it is a good… Read more »
whoever
Guest
Gábor: “And he should be more open to the idea that the problems of the east – as they are common ones and not national – and not only those of the crisis, but the long term ones, can only be resolved according to leftist principles if it is a soultion on a European level and not a national one.” I agreed with much of what you said, but not this. At a local level, as in the housing block or street, you live in, up to the municipal level, and then to regional level, and then at the national level, there are a thousand things that can be done to improve peoples lives. Some cost money, others don’t. Others, such as social enterprises, generate money. Picking up litter is a very simple one – leftist in that it implies that land use is shared in common. One thing about the new LMP party which is promising, is they make the link between land use, localism and participation – and they’re keen to join the dots. Waiting for the EU to sort itself out is a mug’s game, frankly. Even with the strong PES manifesto this time, the elections this… Read more »
Mark
Guest
whoever: “Waiting for the EU to sort itself out is a mug’s game, frankly. Even with the strong PES manifesto this time, the elections this June are set for a right-wing victory, on the basis of national politics alone.” It is interesting. I wonder how many of those who will vote FIDESZ in June’s EP elections, actually realize that by voting for the Hungarian representatives of the EPP they are supporting the spread of market principles across Europe! Maybe the PES have a good sounding manifesto, but none of Europe’s social democratic parties have been able to offer any more than a kind of soft-focus version of economic liberalism. The EU is an imperfect vehicle for change. It is caught in something of an impasse. Euro-federalists long believed that market integration would unleash a logic of social integration that would lead to political integration. The economic success of the EU in creating a highly integrated market has resulted in a strange political failure, in which the logic of market integration has created a xenophobic, new right reaction. The power of this is not attested simply by the fact of the size of the support won by the populist right, but… Read more »
Mark
Guest

Gábor: “You could have ssen Gyurcsány in the last few weeks being trapped between his own ideas and a very agressive media environment presenting only those views you called obvious nonsense as unquestionable thruth of “experts” and “analysts”.”
I take you point, though we have also seen more dissenting voices than usual, simply because it is fairly clear how disastrous the political and economic consequences of implementing the Reform Alliance’s proposals would be.
I think the hijacking of the term “reform” which in English at least means to “make changes in (something) in order to improve it” (Oxford English Dictionary)is interesting. “Reform” has almost come to mean exclusively the opening up of every field of life to market forces. The lack of academic debate among economists is especially shocking, and the neo-liberal hold over the economics profession in Hungary is truly extraordinary.

whoever
Guest

It wouldn’t be too hard to differentiate market-based reforms from people-based or social reforms, but it’s all intended to portray anyone against the Onward March of Neo-Liberalism as stick-in-the-mud Clause IV diehards. And that reference to New Labour is quite deliberate, as we know that the top levels of New Labour and the MSZP were/are close. It’s the cheesecutter technique where you define your enemies quickly before they can put their trousers on, and therefore try to ensure that the mainstream follows your lead.
I see many economists in Hungary as macho posers, with each trying to be more fundamentalist and reductive than the other. It’s interesting that despite hosting the Vienna school of economics, Austria remains a very settled social democracy – certainly lots of xenophobia, but on the whole remaining consensual. Crude marketisation of entire societies is obviously for export only.

Gábor
Guest

Éva: “Hírszerző is something else. For at least the last two years the editorial board has been doing nothing else but undermining Gyurcsány.”
I didn’t mean that Hírszerző is a regular mouthpiece of Szekeres, but in this case he is feeding them with distorted information. Otherwise I would conclude that they are both bought by some mogul (by Hungarian standard, and I hope they are paid accordingly as well 🙂 ) and delighted being sometimes in the company of “extraodrinary” people, as they think it elevates them as well. But even this state of affairs can’t explain the anger in their publactions and short-tempered articles.

Gábor
Guest

Oh, and here is the news, probably unveiling the Reform Alliance’s real character and substance, a selfish lobby group:
http://www.hirszerzo.hu/cikk.megszunik_a_reformszovetseg.103223.html
Poor Glatz, how eager he was while his name was circulated as candidate-candidate to set up the working group for social politics, and now the whole organization will cease to exist without finishing their work. 🙂

whoever
Guest
Eva, of course you can write about whoever you like. And I enjoy reading it. It’s just that I wonder if many of the machinations have relevancy to what actually happens in the country. This is the same country where they needed 30 garbage trucks to shift dumped refuse from an estate in Miskolc. Where there is a massive and devastating pensions timebomb, when the millions in the grey economy retire and find themselves on a minimum pension. The names you mention are important in today’s political life, but may find themselves buried by tomorrow’s events, having added little to the long-term development of Hungary. Beyond the EU, just what do the MSZP stand for, again? It’s not socialism. Is it? To be more partial than polite, none of them are especially capable of independent thought apart from Gyurcsany, and he’s wrong most of the time anyway. I hold by my opinion in that they are apparatchiks in spirit, in the same way that for instance Robert Repassy is an apparatchik for Fidesz. Mesterhazy being a modern “machine politician” with a trendy beard and shiny smile, but for most people, nothing he does or says has any relevance whatsoever. What… Read more »
Mark
Guest

whoever: “It’s interesting that despite hosting the Vienna school of economics, Austria remains a very settled social democracy.”
Perhaps this has something to do with their influence on the economic policy of inter-war years; indeed one of their number, Schumpeter was Minister of Finance for a brief period at the beginning of the First Republic. The general committment of the right-wing administration in inter-war Austria to liberal economic policies didn’t have a very good end – think 1934, and the 1938. In the immediate postwar years, the ÖVP (the sucessor of the dominant Christian Socials of the inter-war years)did not return to pre-war economic liberalism until they were confined to opposition at the end of the 1970s, holding it responsible for the unemployment that had de-stabilized the political system.
There is a lesson there of sorts for Hungary now.

isti
Guest
First, I read this site often. While I find it informative and interesting, I also find the firm, unshakable pro-Gyurcsany/MSzP slant to be tiresome. So I really appreciate this refreshing exchange. As a Canadian-born, liberal-minded person, I struggle with many of the very things you discuss and am constantly frustrated by the situation in Hungary. Among many things mentioned by whoever, Gabor and Mark, the following resonates with me: Mark: “The lack of academic debate among economists is especially shocking, and the neo-liberal hold over the economics profession in Hungary is truly extraordinary” Mark: “The weakness of the liberal solutions to this problem is that they regard it as simply a problem of a lack of market incentives to search for work – i.e. to many social benefits…” I have compared, translated policies/website information from Hungarian leftist parties with those of leftist parties in Canada and found them to be startlingly discrepant. I have tried very hard to reconcile these differences but I cannot. My anecdotal evidence (i.e. discussions, general contacts etc…) would also suggest major differences, including that the general need for a social safety net of any kind is not a priority for the Left in Hungary. There… Read more »
Mark
Guest
isti: “the general need for a social safety net of any kind is not a priority for the Left in Hungary.” The real weakness of the left’s position is that the state redistribution that exists in Hungary is not a safety net. It is the remainder of the state socialist social wage, which no-one has tried to transform seriously into a functioning welfare state (unlike Ėva I do support the principles on which European welfare states are founded and would argue that many in the USA, among them those refused reimbursement for medical treatment on grounds of prior health conditions, or those stuck in trailer parks across the south of the United States, would benefit if Obama were to suceed in introducing a properly functioning welfare state there). In Hungary, the problem is that this redistribution doesn’t really solve the problems of the poorest, as those on middle or high incomes benefit disproportionately. Certainly the mechanisms of state redistribution require reform so that they lift the poorest out of their desperate situation, but this is normally not what is meant by reform. Instead the inadequacies of existing redistributionary arrangements are used rhetorically to support highly reactionary policies of restricting social… Read more »
whoever
Guest

Mark,
You are absolutely correct.

Mark
Guest

Ėva: “In some European countries it is simply not worth working anymore.”
In which countries is this the case?
The social democratic model – and this is true in both the UK and Sweden – only makes transfer payments available to claimants if they “actively seek work”. In both countries this means that claimants can be obliged to take training, to take jobs below the level of their qualification, or to take on subsidized work places as a condition of remaining eligible for state support. The notion that there is somehow a “right not to work” within the European welfare model is a myth.
In some states there is a problem that is misleading characterized “welfare dependency” that is in reality severe structural unemployment experienced by particular groups – this has been marked in France, some regions (the eastern ones) of Germany, and Italy (especially in the south). It is rather difficult to move people off long-term transfer payments if there are no jobs to move them into (and this is the problem in most of eastern and south-western Hungary too).

Hank
Guest
As I have Dutch and German family, I happen to know the situation in Holland very well, and I can assure you that the the situation there is very much that a lot of people just don’t bother to work any more as getting benefits is much easier. Holland has a few hundred thousand unemployed, including builders etc, yet the country imports Poles and british to do simple work in buolding, agriculture etc, as Dutch unemployed are allowed to refuse that kind of work for which they are not trained. All this is slowly changing, but only slowly. I agree with Eva, it is all about balance. Yes, a country needs a safety net. But the current system in Hungary is overly generous to many people who should not be entitled and are not the poorest of the poor, allowing jobs on the side, fake invalidity pensions, too early retirements, child care benefit to middle class and rich families, strategic child bearing etc etc. The awfull state of health of the population has in my opinion first and foremost to do with the ridiculously bad eating habits (a question of sustained and good information) and the very low quality of… Read more »
Mark
Guest

Hank: “As I have Dutch and German family, I happen to know the situation in Holland very well, and I can assure you that the the situation there is very much that a lot of people just don’t bother to work any more as getting benefits is much easier.”
What is your evidence, beyond anecdote?
The ILO statistics on labour force participation suggest that of those over 15 (this figure includes people beyond retirement age) 63.6% were active in the Netherlands, compared with 65.3% in the United States. If you look at the age distribution within the tables most of this 1.7% difference is due a significantly higher participation rate among the over 65s. So, there is no statistical evidence that the Dutch population are any less active in the labour market than the American.

Mark
Guest

If you want to check them I was using the 2007 figures.

Mark
Guest
Hank: “Finally, I am fed up with all this neo-liberalism bashing. Yes, international finance got out of hand (mainly after the Clinton administration (!) decided that banks had to start financing home loans for low incomes and in turn allowed banks to do away with some old and tested safeguards against financial disaster).” I note with interest that you repeat the explanation for the US financial crisis used in the general election campaign by the defeated Republican candidate, Senator John McCain. I’d also note that such explanations were widely held to be politically self-serving at the time, and they don’t even begin to skim the surface of the problems in the global economy. I find it interesting that you attempt to use a false opposition to refute the charge that is made against neo-liberalism. If someone is not in favour of highly socially regressive policies, they must be in favour of an inefficient and suffocating state. Actually, I’m not against the use of market mechanisms even in areas like health care, where appropriate. I personally favour a mixed economy – a dynamic market, with a strong social state funded through progressive taxation. But the questions are, what is the record… Read more »
Mark
Guest
Ėva: “But you must admit that in Hungary this is definitely the case.” With due respect to Gordon Bajnai I think these kinds of analyses of low labour market participation are a good example of where a highly plausible dogma gets in the way of a serious analysis of the problem. I don’t believe for a moment that if welfare payments were axed everyone would start working. I think they have an inverted notion of the causal relationship – dependence on welfare and low labour market participation are due to principally to a lack of employment, and it isn’t the other way around. Firstly, the system is a patchwork of various forms of assistance with highly fragmented administration, much of it in the hands – not of a national agency – but of local authorities, institutionally separate from the Labour Offices. Secondly, by comparison with western European states (even when we adjust for the difference in GDP and income levels) Hungary’s system is not generous, even relative to its income levels – of the larger European states at least France, Germany and the UK guarantee a minimum income through a means-tested benefit (Income Support in the UK, or Sozialhilfe in… Read more »
whoever
Guest
“a bit more market and efficiency in health care, education etc.” The casual association between “market” and “efficiency” is quite interesting. The idea that a “market” in healthcare would result in an efficient outcome for citizens is a brave assertion. The NHS was set up in the UK because the previous “market” system so obviously failed the majority of the population. Whilst vigilance and solid auditing is always required to keep costs in check, the economies of scale have made the comprehensive health service in the UK something of a bargain compared to the US. Market failure would be endemic for lower-income families in publicly provided goods such as healthcare or education, were a simple competition system involved. If there were a “market” and not simply a private monopoly, money which would be focused on care, would need to be directed to advertising. How is this more efficient? And as for education, the mind boggles, that anyone could think that privatising the system could have any positive effects. I thought everyone simply “knew” that this would result in extreme social inequality followed by a wider collapse – and that is why, even now, no country wants to go through this… Read more »
Gábor
Guest
I agree with Mark that it is rather daring to take Bajnai’s statement as evidence or proof of anything. (The more because he is far from being an expert of labour market.) It is a pet of so called economists that people are busy to live on social assistance payments because they can earn more than with work, but the whole theoretical construction is flawed, either because it assumes that a single labor market in Hungary exists, or because they are realying on debateable evidence in the form of analogies from neighbouring conutries prooving the idea that lower tax rates will bring hundreds of thousands in jobs. This is a good example of the problems with market-centered theories based on the concept of rational behavior. As they are relying on the latter, they have to find soemthing explaining low employment rate using this premise and the logical conclusion is that they can earn more as it is rational not to work for less. And if there is rare evidence support this (as it is the case), the worse for the evidence. Anyway social scientists can easily be condemend as not using mathematical models etc. Or simply not taken into consideration.