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."