Long live reality! Viktor Orbán about his first 100 days in office

The latest favorite words in Viktor Orbán's vocabulary are "reality" and "utopia." According to him when Hungarians went and voted for Fidesz "they broke with the age of utopia." His government's job is "to give free play to reality," adding that "his government will recover the country's economic self-determination." While he was delivering his one-hour-long speech to the Batthyány Circle of Professors, the Hungarian forint fell again to 288 forints to the euro and even worse, 224 for a Swiss franc. Thus as far as the euro is concerned Hungary is back where it was at the time of the panic created by Lajos Kósa and Péter Szijjártó at the beginning of June. As for the Swiss franc this is a historic high for the Hungarians who borrowed mostly in this currency. That's the reality. And Orbán's speech about the austerity package that will "take away trillions from the economy" is also reality. The rest is talk. Or utopia, if you wish.

Mind you, I doubt that the people who voted for Fidesz realized that with their vote they "put down the foundations of a new regime based on reality, the regime of national cooperation." I'll bet the only thing they wanted was to see a new government that perhaps would handle the crisis better than the socialist-liberal coalition. Viktor Orbán promised immediate relief. A million new jobs in ten years, more money for healthcare, education, and everything else without the slightest tightening of the belt. Instead, the country is in a financial mess, those holding mortgages in foreign currencies are in trouble, the banks that are supposed to pay handsomely to help the government spend more money are no longer profitable, and the financial markets have lost confidence in Hungary and the new government. That's reality!

But reality seems to escape Viktor Orbán. He doesn't care what the European Union thinks either about the independence of the National Bank or the Union's policy on agricultural lands that as of January 1, 2011, should be opened to foreigners. The Hungarian government was asking for another three years of moratorium which, given the Hungarian government's bad relations with Brussels, might not be granted. But never mind, Orbán says that he doesn't care what the European Commission says one way or the other: "Hungarian land will be safe. No foreign speculators will be able to purchase agricultural land even if Brussels decides to deny the Hungarian request."

As far as the broken-down negotiations with the IMF are concerned, he isn't budging from "the financial independence and economic self-determination of the government of national affairs." Speaking of economic self-determination, it turns out that Orbán has a peculiar view of the matter: "we want to integrate the country into the world economy but the method of that integration must be our decision." As far as the salary of the chairman of the National Bank is concerned, the government will not change its mind "even if the bankers are running to Brussels to complain. Criticism from abroad will not make any difference."

It seems that there are two kinds of reality: one inside of the hall where the professors could listen to the prime minister in rapture and another that we can see and read outside. Last night the Economic Ministry admitted that it received a letter in which the European Commission "wanted to have further information about the salary cap in the public sector." The government's position on this question is unchanged. As far as the salary of the chairman of the National Bank is concerned the Hungarian government "informed the European Central Bank of its decision ahead of time." What, of course, the ministry neglected to mention was that the European Central Bank didn't give its blessing to this move and expressed its opposition to the plan. Nonetheless, the Hungarian parliament passed the law changing the earlier stipulated salary of the chairman and the members of the Monetary Council.

However, it seems that the ministry didn't tell the whole truth. According to the well-informed Index,the Economic and Financial Directorate-General called upon the Hungarian government to change the new law concerning the salary of András Simor and the members of the Monetary Council. Marco Buti, the director-general, is expecting an answer by October 1. If no answer arrives, the EU might sue the Hungarian government for violating laws of the European Union.

At this point the Hungarian news agency, MTI, was understandably confused. Its reporter in Brussels asked for further information from the spokesman of Olli Rehn, the European Commissioner for Economic and Financial Affairs, on the contents of the letter. Amadeu Altafaj Tardio confirmed that the "purpose of the letter was to convince the Hungarian government to change the newly adopted law." He added that sending the letter was prompted by many complaints received from the national banks of other countries in the Union.

Another shot of reality came after the meeting of the finance ministers of the European Union in Brussels this morning. Hungary has no separate finance minister, only an undersecretary dealing with the budget in the National Economic Ministry headed by György Matolcsy. So it was Matolcsy himself who represented Hungary. He was told that the finance ministers of the Union and the commissioners dealing with financial matters urged Hungary to renew negotiations with the European Union and the International Monetary Fund. In their opinion that would be in Hungary's best interest. Both the Union officials and the finance ministers of the other countries offered their good offices "in order to make the renewal of negotiations easier." Matolcsy didn't give a press conference.

However, Rehn's spokesman did. He emphasized that the continuation of the talks largely depends on Hungary. He also told the journalists present that the commission still sees a current deficit of 4.2% instead of 3.8% and it is not clear to the commissioner what kinds of steps will be taken to decrease this number. That's also reality.

Attila Mesterházy, chairman of MSZP, put his finger on the problem. Viktor Orbán wasn't talking about reality but "about utopia that lives only in his head."  

 

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Öcsi
Guest

ESB – “But reality seems to escape Viktor Orbán.”
This is the problem, isn’t it?
ESB – “Attila Mesterházy, chairman of MSZP, put his finger on the problem. Viktor Orbán wasn’t talking about reality but “about utopia that lives only in his head.””
Unfortunately, it’s a shared affliction.

Odin's Lost eye
Guest

Ah! Öcsi I fear you are talking of Virtual Reality.

Mark
Guest
“Orbán says that he doesn’t care what the European Commission says one way or the other: “Hungarian land will be safe. No foreign speculators will be able to purchase agricultural land even if Brussels decides to deny the Hungarian request.”” The right’s insistence on this is something I find interesting, because I’ve done some work on the history of the foreign ownership of agricultural land. In the Horthy era, foreign ownership of agricultural land was entirely legal. Indeed, when the radical right placed pressure on governments to end the practice on the grounds that foreigners buying up property risked an “economic Trianon” the government was consistent in protecting the right of foreigners to buy property (even in the 1940s when it was taking over agricultural land owned by Jews under the terms of anti-Semitic legislation). It did so, of course, defensively to prevent governments in the successor states in turn nationalizing or indeed confiscating land owned by Hungarian citizens on their territory. In so far as I can tell from the documents it was only under Rákosi, when the land of small-scale foreign property owners was turned over to local state farms and the collectives in 1948-9 that the practice… Read more »
Pásztor Szilárd
Guest

Mark: it doesn’t matter when was land free to purchase to foreigners. If it was open in the Horthy era and closed in the Rákosi era, that alone doesn’t decide if it is wise to open land trade today.
What currently matters is that land in Hungary is very much cheaper per area than in Western countries. That means, purchasers from the west could easily get most of Hungary’s territory with ease, and then, at the shortly and surely following rise in prices, get rid of them for a huge win margin.
Why not keep this possibility within the borders if possible? It is simply a basic national interest to do so. That means, as a first step, to try to get moratorium from the EU. If they refuse, then fine, put a new law in force that makes it practically impossible for foreigners to purchase Hungarian land.

Passing Stranger
Guest
Pásztor Szilárd: I think you are missing the point that Hungarian land owners will be the first to suffer from such a moratorium. They are, after all, the owners of the land, and if the demand from foreign buyers should suddenly dissapear, clearly the value of the remaining land will drop. In the same vein, if land prices do increase due to an increase of foreign buyers, Hungarian land owners will benefit from rising prices, and profit from the same huge margins. In the housing market what we have seen is Hungarian owners profiting immensely from Western buyers, who have often bought at far too high rates inspired by a housing bubble at home. If the land market behaves in the same way, Hungarians are the first to profit. Of course, Hungarian buyers may be affected negatively (though will again benefit from rising prices later on. Patriotism simply does not factor in to the equation. The notion that western buyers will ‘easily get most of Hungary’s territory,’ seems to me pure emotion. I doubt most of it is for sale, it is not like foreigners will exercise jurisdiction over the land, charge taxes or will be able to annex it… Read more »
Pásztor Szilárd
Guest

Passing Stranger: patriotism indeed is a very important, if not the most important, factor here. Hungarian buyers simply cannot compete with Western ones, so the easily predictable outcome of such an opening of land trade is that Western buyers get to own the lands and Hungarian residents are generously allowed to re-hire the land that was previously their own.
And I think every single Hungarian should be attached to this issue with a large amount of emotion, it is called loving your own homeland. I am not intending to ease up on that.

Alias3T
Guest

@Solid Shepherd: Passing Stranger just showed you how patriotism cuts both ways. Many Hungarians will benefit from the sale of Hungarian agricultural land to foreigners. But you just ignored him.
Keep loving your homeland, and in twenty years time you’ll still have lots of peasant smallholdings, but not even Hungarians will be buying their produce, and the quality will be atrocious, because farms in neighbouring countries that were prepared to sell their land to investors with money will be run more professionally, with more machinery and more expertise, and as a result they’ll be producing better crops for far less money.
So keep on with your patriotism, and you can look forward to a country full of impoverished peasants. But they’ll love their country, so they won’t mind seeing the Slovak tourists arriving in their Mercedes.

Odin's Lost eye
Guest
Professor in you article you say ** “But never mind, Orbán says that he doesn’t care what the European Commission says one way or the other: “Hungarian land will be safe. No foreign speculators will be able to purchase agricultural land even if Brussels decides to deny the Hungarian request” ** This is fighting talk. If the EU says ‘Yes the land is open for sale’ it is open for sale. The Orban Victor (the Mighty One) and Fidesz have two options. These are to acquiesce or face action in the European Court whose remedies will include an order to do what the laws of Europe say or face huge fines. In this case the only way that Hungary can fulfil the Mighty On’es will is to leave Europe with all that involves, The repayment of Grants, the fines imposed by the European court this will include a total collapse in Sovereign Dept rating, the Forint etc Seriously those who will buy Hungarian agricultural land will want to farm it and farm it well. They are not absentee landlords; they cannot make enough return on capital invested at that caper. This is because these guys can farm with a capital… Read more »
Pásztor Szilárd
Guest

Alias3T: this is ridiculous, a very near-sighted view to represent patriotism as if it were necessarily leading to losing the chance to be competitive.
Practically all other EU countries are protecting their homeland, yet they are competitive and a very real threatening force to our own land if we let it.
Foreign farmers are in advance because their government has fought for their funding at the EU tables, as opposed to governments of the former 8 years in Hungary.
The competitive advantage of Slovakian agriculture is by no means related to their (non-existent) opening of land trade. These are just two completely different things.
You don’t have anything in common with Hungary, I know it because I know you from former times. But those times are over when anti-patriotic people could have stepped up as leaders of Hungary.

Alias3T
Guest

You can be competitive in any way you like. Foreign capital is one way of doing it. And domestic capital… Oh, wait, there isn’t any! The banks aren’t lending, the government is finding it markedly more difficult to borrow money than any of its neighbours!
I think I’m pretty unlikely at any point to end up a leader of Hungary, so not sure what your last paragraph is about. (Though I’ll email you my address if you want to dress up in white sheets and mount a vigilante). But, beyond love of your country, what are you offering, exactly? What are you going to do which hasn’t been done before which is going to make Hungary rich?
Thermal baths and organic paprika are both absolutely great, but you need an awful lot of people spending a lot of money on them to pay for high-quality doctors and teachers, let alone the giant flat-panel TVs and and exotic holidays that even the most fervent patriots want.

Mark
Guest
Pásztor Szilárd: “Mark: it doesn’t matter when was land free to purchase to foreigners. If it was open in the Horthy era and closed in the Rákosi era, that alone doesn’t decide if it is wise to open land trade today.” No it doesn’t, and it may not be wise to open the market up – but the problem the government faces is that Hungary decided to open its land market when it joined the European Union. At the heart of the European Union is the free movement of capital, which means that citizens of any state within the union are available to invest that money without restriction anywhere else, on the same terms as citizens of the home country. Fundamentally a regime of national protection of assets is simply not possible within the framework of EU law. Though there are certain areas where it is possible to protect certain propertes from foreign ownership in some countries (holiday homes in Denmark) agricultural property is not one of them. Hungary therefore faces a choice – if its national interest is in remaining an EU member, it will have to accept EU law, and the current derogation, and any law the government… Read more »
Passing Stranger
Guest

“Foreign farmers are in advance because their government has fought for their funding at the EU tables, as opposed to governments of the former 8 years in Hungary”.
Negotiations on EU accession started in 1998, with Fidesz in government.The MSzP-SzDSz government was elected into power in April 2002. The EU concluded negotiations with Hungary in December 2002. New governments don’t usually have a lot of room for manoeuvre in such complicated negotiation processes. Whatever concessions Hungary made to Brussels on agriculture, were made by Orban.

Pásztor Szilárd
Guest

@Passing Stranger: wrong, because:
1. negotiations in the area of agriculture were concluded with the new government (Medgyessy);
2. despite their poor performance in the negotiations, Hungary still got some funds from the EU, which the new government purposely failed to transfer the money to the farmers, as they were obliged to, for months. There were even weeks long farmer demonstrations all over the country at the time.
Please check your facts before expressing your bias.
@Mark: not completely true. Movement of capital is free by EU law, but that doesn’t keep any country from imposing additional restrictions to potential buyers. The very example you mentioned, Denmark, has a law that prescribes a college degree in agriculture in Danish, and an advanced level Danish state language exam for potential buyers. And it is completely in conformance with EU laws.
Talk about no possibilities in protecting national assets.

Passing Stranger
Guest

@Pasztor Szilard.
“Please check your facts before expressing your bias.”
I did. Orban was personally involved with negotiations on the moratorium well before the Socialists took over. In fact, these ‘national’ issues were the only ones he was really interested in, he pretty much let the foreign ministry bureaucracy run the negotiations.
If you are talking about agricultural subsidies; the phased introduction of CAP is something all other new member states agreed to. It is hard to see how Hungary could have negotiated receiving the full amount right away if even Poland couldn’t, even with Orban in charge.

John T
Guest

Szilárd -Last year when I was in a supermarket in Budapest, I noticed they were selling tomatoes from Spain. And they were cheaper. Now Hungarian tomatoes are very very good, but how is it, with all the transport costs involved, Spanish tomatoes can be sold more cheaply than Hungarian ones. The answer lies in more efficient production and unless there is investment money provided to domestic growers, they will not be able to match the efficiency of the Spanish growers. So, if professional foreign farmers want to purchase land and invest in the best production methods, is that really such a catastrophy. With the investment would come jobs, not just in farming, but probably logistics and maybe food processing (pickles, conserves) as the domestic market grows. And while I’m pleased that most shops do promote Hungarian products, ultimately, the consumer more often puts price before patriotism.

Pásztor Szilárd
Guest

@John T: no, Spanish tomatoes are not cheaper because of more efficient production. Even if they are produced more efficiently, not nearly enough to make up for transportation costs.
The answer is primarily what I wrote in point 2 of my post here @ September 08, 2010 at 01:05 PM.
@Passing Stranger: yes the moratorium was agreed on during Orban’s leadership, and it was a nice achievement and noone is questioning this agreement. The problem is not the length of the moratorium, we were talking about subsidies and their unlawful withholding by the “socialist” government. This is what made local farmers lose market: foreign farmers who received the subsidies on time could of course produce their goods a lot cheaper, and without (of course…) any step by the government to prevent it, they flooded out stores, preventing Hungarian farmers to sell their (more expensive) products in return.
This era alone produced quite a lot of suicides among agriculture workers in Hungary, too bad the type of media you probably get your information from doesn’t report this (for a reason).
The ‘socialist’ government intentionally made Hungarian farmers bleed out.

Passing Stranger
Guest
@ PSz you mean Orban was interested in the moratorium, but not in the agriculture budget? He was four years in power, the EU negotiation agenda was well known. What on earth was he doing? I ask again: why do you think Orban could have got a better compromise from Brussels, if even the Poles could no manage to do so? A polarised view of the world can warp your vision. Orban is not the first this year to ask to extend of the moratorium; in fact, the Hungarian socialist gvt asked for an extention in April this year. All Hungarian governments have consistently opposed reform of CAP, favouring old fashioned product support. In the European Parliament, invisible to the Hungarian polarised press, Hungarian parties vote together to support Hungarian agricultural exports. Subsidies alone cannot explain the succes of non-Hungarian products. Hungary recieves more subsidies from Brussels every year, yet agricultural exports decrease. Hungary has lower wages and domestically cheaper transport costs. Beats me then why Hungarian strawberries should cost 4000 Fts and Greek ones 1300 per kilo. They are nicer but not four times as good. My suspicion is that crafty market salesmen secretly ‘magyarise’ cheap foreign strawberries to… Read more »
Mark
Guest
Pásztor Szilárd: “The very example you mentioned, Denmark, has a law that prescribes a college degree in agriculture in Danish, and an advanced level Danish state language exam for potential buyers. And it is completely in conformance with EU laws.” I suggest that Pásztor Szilárd takes more care in checking his facts. You see before I make a statement I am always very carefully about checking mine. I’ll just quote the following from a 2004 academic study of the law in relation to foreign agricultural land ownership (and provide the URL for the full article) – and note especially the last sentence: “Denmark continues to restrict EU nationals’ acquisition of recreational property and land. ….. To acquire land, all individuals (whether Danish citizens or not) must show that they have lived previously in Denmark for at least 6 months and will work the land themselves …… Concerning purchases of agricultural land, foreigners face no higher restrictions than Danish citizens.” (http://www.sciencedirect.com.libezproxy.open.ac.uk/science?_ob=PublicationURL&_tockey=%23TOC%236037%232004%23999629997%23503619%23FLA%23&_cdi=6037&_pubType=J&_auth=y&_acct=C000010439&_version=1&_urlVersion=0&_userid=126980&md5=89089e392c59eb57606d64700a53e541) I suspect that Szilárd has been misled by the standard FIDESZ practice of telling specious lies about the situation in foreign countries in order to justify its position. The true Danish position actually embodies a compromise between the EU’s demands… Read more »
Pásztor Szilárd
Guest
@Mark: you may have accidentally misspelled the party name and exchanged MSZP for Fidesz when talking about specious lies. Yes Denmark doesn’t discriminate foreign buyers by law… that’s exactly what I was talking about. As you can read it here: http://www.edenkert.hu/vilagos-zold/zold-biznisz/daniaban-aze-a-fold-aki-megmuveli/368/ , I was not far from the truth, even if my memory failed me about the exact criteria. It still doesn’t invalidate my argument about possibilities that easily exist to protect the land without violating EU law. I see no problems in doing that, but I do see problems in your intention to prove that the Orban government is not allowed to protect Hungarian land without the moratorium. @Passing Stranger: you missed one of my former posts where I wrote that while the moratorium was agreed on during Orban’s governance, the subsidies were already negotiated by the socialist government. And yes I not only think but I’m sure Orban could have reached an agreement that is much more preferable to Hungary than what the Medgyessy governmnet did. Why? Because Orban’s motivation is to protect national interests (which most of you just pejoratively label nationalism), while the socialist government is the exact opposite. The latest negotiations with the IMF show… Read more »
Mark
Guest

Pásztor Szilárd: “Yes Denmark doesn’t discriminate foreign buyers by law… that’s exactly what I was talking about.”
I think then we can agree that Hungary will have no means to stop all foreign buyers purchashing agricultural land.
Though I find the Danish solution quite attractive, I suspect that when faced with the real choice between a Danish-style restriction and de-regulation the government will choose de-regulation. The problem for them is that many who received land through the compensation process in the early 1990s do not farm their own land, but rent it out to others. If the law made proof of an intention and ability to farm the land a condition of land transfer (the only way of implementing this), it would mean that such owners could not leave agricultural land to their descendants unless they decided to farm. They would be forced to sell. I can see strong argument for this, but I suspect that FIDESZ will balk at the consequences.

Pásztor Szilárd
Guest

@Mark: “I think then we can agree that Hungary will have no means to stop all foreign buyers purchashing agricultural land.”
No. If you think so, you missed the whole point of my posts here.
And there is a very wide understanding in Hungary that no foreigners may be allowed to purchase land. In the moment Fidesz gives up on this, their supporters leave. So the party won’t balk at the consequences (which won’t exist), regardless if you think/hope it or not.
This is one obviously recurring problem that most posters here on this blog refuse to recognize: the Fidesz government vastly differs from the socialists, they always had, and they follow a radically different logic. This logic can never be understood unless one steps out of the extremely narrow-minded and perspectiveless approach which typically socialists embrace.

Mark
Guest

Pásztor Szilárd: “No. If you think so, you missed the whole point of my posts here.
And there is a very wide understanding in Hungary that no foreigners may be allowed to purchase land.”
I’m curious to know how this will be achieved. Because the Danish model (if the EU were to agree to such a law, and it is far from certain, because like its Euro opt-out, this was negotiated after it rejected the Maastricht Treaty in June 1992 as part of a package to secure its eventual passage the following year) would not stop this. It would restrict it to foreigners resident in Hungary, who know Hungarian, and who intend to farm.
There may indeed be a wide view in Hungary, but there was also a wide view in favour of EU membership and acceptance of acquis communitaire (i.e. the supremacy of EU law over Hungarian law when the two are in conflict) expressed in a national referendum in 2003.

Passing Stranger
Guest
“Pasztor Szilard”: you missed one of my former posts where I wrote that while the moratorium was agreed on during Orban’s governance, the subsidies were already negotiated by the socialist government. That timeline is impossible. You have the order wrong. EU accession negotiations started in 1998, and were conducted by the Orban government, and concerned mostly the enlargement criteria and policy issues. The Socialists started negotiations with the EU only in May 2002, in the budget phase of the negotiations. This means they, for better or worse, had to rely on four years of negotiations conducted by FIDESZ. In December 2002 the EU countries agreed a deal on CAP subsidies, a phased introduction of subsidies in all new member states. To blame this compromise on Hungary’s socialists is a joke. All other new member states agreed to the same phased introduction, including powerful states such as Poland that have much larger vested agricultural interests. Hungary had precious little room for manouvre, regardless of who was in power. What exactly could Orban have achieved certainly if Romania, Bulgaria, Slovakia and all the other new member states assented to this deal? How could he have forced a different result? What instruments did… Read more »
John T
Guest

“So the party won’t balk at the consequences (which won’t exist), regardless if you think/hope it or not.” Szilard – Brave words. But of course the answer is that if Hungary doesn’t like or want to abide by the EU rules, it should do the honest thing and leave. As an EU taxpayer currently helping to pay huge amounts of money to help develop the country, I’m not impressed that the Government will take my cash with one hand and stick two fingers up at me with the other one!

Mark
Guest
John T: “But of course the answer is that if Hungary doesn’t like or want to abide by the EU rules, it should do the honest thing and leave.” Or to seek to build alliances to change agricultural policy continent-wide to ensure that the land is really owned by those that work it, and also ensures that policies are put in place to ensure a flourishing market-oriented agricultural sector that rests on widely distributed ownership. Unfortunately the fetish of “national” land ownership is going to do nothing for this. I have actually talked to small producers and while they feel frustrated at bureaucracy and EU legislation which they feel puts them under pressure, and advantages those who have links to the supermarket chains, they actually need the CAP support (no bust up with Brussels is in their interests). Nor does it do anything to address some of the problems. I can think of one village where one person owns the lands; there are no work opportunities so that person controls the highly seasonal labour market; he also controls the municipality (and before anyone talks about Communists, he is the FIDESZ mayor – and this situation I understand is not unique).… Read more »
Pásztor Szilárd
Guest

@Passing Stranger: wrong again. The timeline was exactly as I described. Look here for proof about how the Medgyessy government conducted the negotiations in late 2002 about e.g. the milk quota or cattle:
http://www.vm.gov.hu/main.php?folderID=1235&articleID=4820&ctag=articlelist&iid=1
John T: most EU countries protect their land. Fidesz isn’t going to do anything else specially. Just the same. Take it, or leave it.
Throughout history, people fought wars for land. No way are we going to give ours up in years of peace. Luckily, the old government, that would have given it up, is out of power.

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