It now seems that what happened to Suez Environment in Pécs (see my post "Foreign Investors in Hungary Beware: Pécs and Suez Environment" [October 7, 2009]) was not a singular event. Not the crazy idea of some loose cannon, a newly elected mayor in one of Hungary's bigger cities. I never thought that Mayor Zsolt Páva was acting on his own because such a drastic attack on a foreign company, in my opinion, couldn't possibly happen without the knowledge of the top brass at Fidesz. Especially so close to the elections which they are poised to win. I thought that perhaps it was a trial balloon to test domestic and international reactions.
If it were just a trial balloon, by now it should be crystal clear that the foreign reaction is resoundingly negative. Not just in the case of Suez Environment but also in the case of the two radio stations, Sláger and Danubius, originally owned by foreign companies, who lost their licenses. Again, those interested in the story should read my earlier post. These two cases prompted international outrage. Nine countries issued a joint statement from their embassies calling the Hungarian government's attention to these antagonistic moves against foreign companies. Of course, the Hungarian government is quite innocent. It has no jurisdiction over the independent local government of Pécs or the equally independent ORTT, the body that administers Hungary's airwaves.
In addition, U.S. Representative Joe Donnelly (D-IN) introduced a resolution that "(1) condemns the recent action by the Hungarian National Radio and Television Board that awarded the national community radio licenses; (2) encourages the Republic of Hungary to respect the rule of law and treat foreign investors fairly; and (3) encourages the Republic of Hungary to maintain its commitment to a free and independent press." Donnelly's resolution pointed out that over $9 billion has been invested in Hungary from the United States since 1989, making the U.S. the fourth largest contributor to foreign investments in the country. It also noted that the Hungarian Investment and Trade Development Agency deemed foreign investment crucial to Hungary's economic development. The resolution was overwhelmingly passed a couple of days ago (333:74).
So after all this, one might think that Fidesz would stop its anti-foreign rhetoric and action. Because this is no laughing matter. Such a resolution against a European nation must be taken seriously. That's why I was so surprised to read in today's Népszava that the mayor of Hódmezővásárhely refused to meet with the CEO of DÉMÁSZ, the Hungarian subsidiary of EDF Group, a leading player in the European energy industry. The company started in 1946 as Elecricité de France and subsequently became an international company with branches in the United Kingdom, Germany, and Italy. EDF has more than 160,000 employees in Europe and provides electricity to 38.1 million people. The original investment in the Hungarian subsidiary was more than 37 billion forints. The company is one of the largest employers in the region, that is the southern Great Plains where Hódmezővásárhely is located.
The mayor of Hódmezővásárhely, János Lázár, is not a two-bit local leader in a smaller town (population 50,000) but an important player within the party. He is a member of parliament, chairman of the parliamentary committee that oversees police matters, and is often talked about as Hungary's next minister of interior (also in charge of the police).
So what happened? Thierry Le Boucher, CEO of DÉMÁSZ, asked for a meeting. Lázár in an impolite letter refused to meet the Frenchman. The letter read: "I received your intention of meeting me, but I have no desire to meet you either now or any time in the future. Next year the new government will change the legal provisions concerning the country's energy sector in order that it would serve the need of large companies and ordinary citizens. As a mayor and as a member of parliament I consider it very important to change the rules and regulations concerning your activities and the price structure of your firm. I very much hope that in our country in the future such political outlook will receive center stage that defends national interests and not the interests of foreign companies."
Considering that 80% of Hungarian exports are produced by large foreign companies I really don't know what Viktor Orbán and Fidesz are thinking.