Promises, promises: Fidesz’s plans for Hungary

For months now analysts of the Hungarian political scene have been complaining about Fidesz's refusal to say anything about the party's program. Or, if the Fidesz political leaders and experts said anything, it was often confusing and contradictory. As I mentioned earlier, Viktor Orbán's interview with two so-called journalists of the tabloid Blikk wasn't very informative. Mihály Varga, former finance minister and the economic guru of Fidesz, would say one thing one day and something else the next. His latest idea, new in Fidesz circles, is the introduction of a flat tax at a very low rate. Another economic guru of Fidesz is György Szapáry, an emigré from 1956 who for years worked for the International Monetary Fund and who eventually settled in Hungary to became one of the deputy chairmen of the Hungarian National Bank. He admitted in an interview (HVG) that the country cannot increase its budget deficit and also cannot go against the wishes of the IMF. However, he seems to think that tax cuts are necessary and new jobs must be created. How? According to Szapáry, by cutting back on the bureaucracy. Somehow I don't think that this is a possible solution because Fidesz, at least in its campaign program, hints at even more bureaucracy at the county level and a more entrenched bureaucracy at the national level.

Today at last Péter Szijjártó officially announced Fidesz's plans for the future. It is definite that Viktor Orbán himself will be the party's candidate to be prime minister of the country. Some of you might ask: "Why? Was this at all in question?" Yes, it was. There were rumors to the effect that Orbán would stay away from hard economic decisions. He would put up a figurehead, an expert, just as he suggested Péter Ákos Bod, former chairman of the National Bank during the Antall-Boross period, in 2004. People figured that he would come up with a person who would take care of the dirty work and when it was done he would arrive on the scene and save the world. But it seems that by now Orbán thinks that Gordon Bajnai has done him the favor of making order so he can immediately take charge.

Szijjártó's more important announcements concerned the specific plans of the future prime minister and his party. He repeated that the government's most important project is to introduce tax cuts. Moreover, practically immediately they would undo the changes concerning subsidies to new mothers. Back would come the three years of monthly stipends at 75% of the mother's former pay. They would also get rid of the property tax on high-end real estate.

Fidesz would also go against the trend of closing schools in tiny villages with only a couple of dozen children and bussing these students to regional schools. I might add that this bussing is not at all like in the United States where school buses can easily travel 15-20 kilometers from house to school. These villages are very close to each other. To keep up a separate school for only a handful of children is not only wasteful; the level of teaching is also very low. Yet Fidesz promises that every itsy-bitsy village will have a school comprising at least the first four grades.

The new civil code, the result of ten to fifteen years of hard work and just recently accepted by parliament, will also be scrapped. Fidesz doesn't like some of the laws concerning the family and common-law marriages. Szijjártó repeated Orbán's magic number of 3,000 new policemen. He also mentioned the restoration of administrative offices at the county level. I must say I don't really know what these administrative offices did before they were closed, but I do know that the whole county system should be changed. The county administrations nowadays don't really have any function except to take care of some museums, libraries, and hospitals. Surely, these institutions could be transferred to municipalities and handled with the existing staff. The counties, however, seem to be important in political terms. Every county has a county assembly. Money down the drain, but they give a "job" to the lower echelon party leaders. As far as I know at the moment all county assemblies are in Fidesz hands. I checked the Baranya County Assembly and found that it has thirty-eight members out of which only fifteen are  MSZP delegates. And Baranya probably has more MSZP members than most. Thus, strengthening the counties instead of abolishing them is important to Fidesz. This goes against the grain because Hungary is already behind at reorganizing the country according to regions, which is a European Union requirement. However, any change concerning the local governments requires a two-thirds parliamentary majority.

The agreement with the International Monetary Fund must be renegotiated. This is necessary because the Gyurcsány government that signed the agreement was weak and therefore the country received the loan with greater restrictions than others. (This is not true, by the way.)

Then there is the question of health care. Currently a really hot topic although it seems that the representatives of the hospitals and the minister of health and the minister of finance came to an agreement a couple of days ago. The hospitals will receive extra money before the end of the year, but it will be charged against the 2010 budget. The amount in question is about 20 billion forints. Fidesz intends to be much more generous. Szijjártó was talking about a 100 billion shortfall that Fidesz would presumably make up. In addition, they would raise the salaries of doctors and nurses.

Where would the money come from? For example, the government shouldn't give any money to the Budapest Transit Authority (BKV). Here is an immediate 50 billion a year. Interestingly enough Szijjártó said absolutely nothing about the State Railways that gets much more than that. The current government is planning to take away 40 billion from the railroad's subsidies. Moreover, the waste at MÁV (Hungarian State Railways) is incredible. I just read somewhere that there is a line where a train makes two round trips a day. It costs 28 million forints a year to run this train. On each run there are only 0.8 passengers. But Szijjártó is quiet about this because the trade unions of MÁV are threatening the government with a strike because of the smaller subsidy. They also fear closing useless lines and thus cutting back the number of employees. Fidesz would love to have a huge railway strike that would further inflame public opinion against the government. BKV on the other hand is under the stewardship of the MSZP/SZDSZ-run Budapest where incredible retirement packages and severance pay were given to departing high-level employees. So thrashing BKV and taking away 50 billion there sounds good. But it is better not to touch MÁV although only 2-3% of the population uses the railways while its maintenance costs every Hungarian citizen 100,000 forints a year.

Szijjártó also mentioned the reduction in bureaucracy which, according to him, would result in an economic growth potential of 2-3%. How he came to this conclusion, I have no idea but it sounds bonkers to me.

As far as the structure of the government is concerned, Fidesz would reduce the number of ministries, which I'm sure is not a bad idea. I just wonder what will happen to the Ministry of Sports and Youth that was introduced by the Orbán government and abolished since. Earlier it was mentioned that they would divide the Ministry of Justice and Police and would reestablish the old system of having a separate ministry of the interior that would be responsible for the police force. They will reestablish the position of "permanent undersecretary" (közigazgatási államtitkár) that is not at all permanent in Hungary. Not only does the political undersecretary leave when there is a change in government, but the undersecretary responsible for running the ministry's everyday activities is also usually sacked. Even the heads and deputy heads of departments get pink slips. Total spring cleaning! Orbán in his last year in office named about 300 civil servants who were supposed to be especially qualified and accordingly received very handsome salaries. Sometimes more than the minister. It turned out to be no more than a corps of party faithfuls, and some of them didn't even meet the paper requirements. The next government managed to get rid of some of them, but it seems that the reintroduction of an elite corps of civil servants is still on the agenda. At least Szijjártó talked about providing life-long careers for some of "the very best."

Foreign policy? Szijjártó mostly talked about Slovak-Hungarian relations. These relations "must be based on an entirely different footing, that is on the basis of mutual respect." This lack of "respect" seems to be applicable only to Slovakia because in that country "extreme elements are in the government." Moreover, the Slovaks don't seem to be aware of "European values" (I assume that idea is borrowed from Péter Balázs's unfortunate interview in the Süddeutsche Zeitung). In addition, the current Hungarian government has "neither authority nor prestige."  From Zsolt Németh's interviews as well as the latest Orbán interview in Ma reggel it is clear that Fidesz considers the Bajnai-Fico negotiations more than superfluous. A wrong step. Hungary shouldn't have talked to the Slovaks until they apologized for the Sólyom affair. "Running to the European Union as children to the kindergarten teacher" was also a mistake. There will not be any results for months, if at all.

And finally, the question of dual citizenship. We know that Fidesz would have loved to introduce dual citizenship because it could have smuggled in a large number of "foreign" voters who Fidesz figures would vote for their party. According to Szijjártó it would be "parliament's moral duty to take care of this question," but the parliament in its present composition is unable to act. That is a rather baffling statement. Surely, "taking care of this question" would not be the duty of the present government. There are a couple of explanations for this interesting turn of phrase. First, he doesn't want to commit a possible Fidesz government to the introduction of dual citizenship that might cause serious international complications (to put it mildly) or second, and that is more likely, he is alluding here to the necessity of Fidesz having a two-thirds majority in order to be able to act on this "moral duty."

I don't have the means or the knowledge to sit down and figure out how much this Fidesz plan for the country would cost. I'm sure even as I write that economists are working on the problem. I have the feeling that it is a financial impossibility. Neither the European Union nor the IMF would stand for it, and better not to factor in foreign investors. I hate to think what would happen to the forint or the stock market or Hungary's ability to borrow or to sell bonds. I can only say exactly what I said in 1998: let's hope that these promises are promises and no more.

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Hank
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“I have the feeling that it is a financial impossibility.” It is a certainty that it is impossible to finance, and Fidesz knows it (it would probably be worse if they didn’t know because that would mean they would be absolutely dumb, instead of dangerously cunning). But I think they just promise whatever they think is popular and gets them votes, so it is absolutely no use listening to any of their speeches at the moment. The real proof of their program is the make-up of their government. Who will be the finance minister, who will get economy, who will be in the prime ministers office etc., those things are decisive. That doesn’t make me feel more comfortable, I admit, because all you hear are the names of people that were already there ten and 15 years ago: Varga, Matolcsi, Martonyi, etc. Don’t they have any new faces, any new talent? It’s pathetic. But the most worrying thing here is that it shows a total lack of understanding of what democracy means. Already for years, Fidesz people I speak to defend the lack of a solid alternative and realistic program (which means saying what you want ánd how it can… Read more »
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