The Swedish pension model and Hungarian politics

A few days ago I wrote about Mihály Varga’s “slip” about Fidesz’s plans to make a drastic change in the Hungarian pension plan. The very next day Varga, Orbán’s last minister of finance and the party’s financial expert, denied the whole interview. According to Varga, a few months ago there was a conference where economists and financial experts discussed the various systems in existence in different countries and he himself made a speech there, but that was all.

In no time it turned out that there was indeed such an interview albeit on the telephone. Moreover, the journalist took notes during the conversation that she kept and was able to produce. This was announced first by János Dési, the moderator of ATV’s “Újságíró Klub,” who is one of the editors of Népszava. As Dési told the television audience, one of the paper’s reporters got in touch with the journalist of Figyelő and Mr. Varga isn’t telling the truth. Next day, the same story appeared in Népszava. After that Fidesz dropped the subject, which is the best possible tactic under the circumstances.

However, as one could have predicted, the other side didn’t stop there. Attila Mesterházy, MSZP candidate for prime minister, immediately got in touch with the current prime minister and asked him to convene the Council on the Affairs of the Elderly (Idősügyi Tanács) to inform its representatives about the plans of Fidesz and to reaffirm MSZP’s commitment to the pensioners’ current status that, according to its promises, will even improve in the future. Fidesz’s expert on the welfare of senior citizens, László Iván, a physician specializing in gerontology, went into counterattack mode. He announced that MSZP will have a lot of explaining to do about the shrinking value of pensions.

However, the other side is well armed. Most likely better armed than László Iván who gave a rather confused interview the other day on “Ma Reggel,” the early morning political show on MTV. The general reaction was that “Fidesz’s plans are still not clear.” Obviously, Dr. Iván has difficulties with brazen lies and therefore he skirted issues. In any case, I have the feeling that MSZP will come out better in this particular duel before the Council on the Affairs of the Elderly. The reason? A Christian Democratic proposal, supported by Fidesz, from August 31, 2007, unearthed by diligent government employees.

The proposal was detailed, some fifty pages long. It got as far as the parliamentary committee on youth. The Christian Democratic and Fidesz members of the committee suggested that it be discussed in the full house, but the MSZP majority voted it down. This proposal bears a suspicious resemblance to the “Swedish model.” Here are the most important items, highlighted in green.  Swedish model

The retirement age would be raised to 70 and the total amount of pension would depend solely on the amount saved in individual accounts. I’m afraid Mihály Varga made a dreadful mistake. With this document  MSZP has a winning hand in the pension war.

Of course, we have no idea whether this document and Varga’s slip will make dent in Fidesz support. But a couple of years ago when a conversation between Viktor Orbán and younger political scientists leaked out in which Orbán pretty well told his audience that his government will favor the “actively employed” sector of the population as opposed to the pensioners, Fidesz’s popularity dropped considerably. In 1994, Fidesz’s incredible loss of popularity from 40% to 8% was also caused by Orbán’s hasty words against the the pensioners. All those grandmothers who thought that the young democrats, especially Orbán and Tamás Deutsch,  were so cute immediately decided that cuteness wasn’t enough.

One must tread lightly when it comes to the 3.5 million pensioners. They go and vote and their own pension’s fate is not immaterial to them. To make the same mistake three times would be more than stupidity. It would be madness.