Interpretations of Orbán’s “reforms”

I already wrote that one word that mustn’t be uttered by anyone in the Orbán government or in Fidesz is “megszorítások” (restrictions, curtailment, reduction). Because, after all, in the last four years of the socialist-liberal governments Fidesz almost daily criticized the “mistaken” policy of austerity. They claimed that one could easily solve the problem of the budget deficit without doing anything restrictive. Viktor Orbán only a few days ago made some, in my opinion, utterly indefensible remarks about the socialists’ “pleasure” at introducing more and more “restrictions.” He, by contrast, will show that the problems of the budget deficit and very high sovereign indebtedness can be solved without putting any additional burden on the population.

Well, for a short period, while the money lasts, it may be sufficient to levy extra taxes on the banks and some foreign companies. For a while, one can expropriate people’s retirement savings. But again, that money will soon disappear and then what?

The Hungarian government has to come up with something by March because it is in that month that a new convergence program must be presented to the European Union. If not, EU subsidies might come to a screeching halt. In that program the government must show to the satisfaction of Brussels that a serious effort has been made at, yes, “restrictions.”

Of course, an austerity program will be introduced, but for internal consumption it must be called something else. The government came up “revival of the economy.” Just to show that I’m not the only one who finds some of the Hungarian political scientists’ so-called analyses no more than cynical exercises that are supposed to justify what others might call lies, Tamás Bauer severely criticized Gábor Török, a political scientist and a prolific blogger, about whom I wrote several times. This time Török in an interview praised Orbán and Fidesz for basically lying about the nature of the “reforms.” According to him, Gyurcsány made a mistake in telling the truth in the summer of 2006, a mistake that Orbán must avoid making. So, basically Török approves of the kind of double talk Orbán is famous for. To say one thing to a foreign audience and something else for home consumption. The question is, of course, how long one can play this game.

As I wrote a few days ago, Orbán first announced his “non-austerity program” to the Budapest correspondent of The Wall Street Journal, and it was only a couple of days later that he repeated the message in Hungarian at the launch of the New Széchenyi Program. Here is a picture taken at this occasion:

 

More and more pictures like this one appear in the media inside and outside of Hungary. A rather telling picture of a man who thinks that he can not only move Hungary in the “right” direction but bring about a revolution in the European Union as well.

So, let’s take a look at the “interpretation” of the reforms. Orbán promised to lower the sovereign debt from 80% of GDP to 73-74%. That will be done, according to him, by using the amount of money the government receives from the private pension funds and by paying back the unused portion of the IMF loan. Indeed, with the help of this amount of money the debt can be reduced by 8.4 to 8.7%. Earlier Orbán wanted to reduce the sovereign debt by rapid economic growth, but now it will be done by using up past savings of citizens.

He mentioned in his conversation with the correspondent of The Wall Street Journal that the introduction of the euro is not realistic until the end of the decade. Moreover, it is better to be outside of the euro zone than inside. However, Fidesz in the campaign was promising the introduction of the euro by 2014-2015. In those days Fidesz’s economic expert, Mihály Varga, was championing for an early introduction of the common currency. Today the story has changed considerably. György Matolcsy thinks that the introduction of euro can take place only after the Orbán government creates one million new jobs. That might mean that the government wants to loosen fiscal and monetary restraints. That can also be interpreted as working toward a weaker Hungarian forint.

The system of pensions is a tricky problem. From the amount of money received from the private pension funds 434 billion will simply be added to the budget in order to be able to pay current pension obligations. Another 434 billion will be used to reduce sovereign debt. In three years either individual contributions must be raised or pensions must be lowered.

Other promises for revival involved lowering unemployment benefits, decreasing subsidies on prescription drugs, and introducing reforms in the transportation sector. Cutting unemployment benefits by a third, as Matolcsy promised, would seem to be difficult to achieve, given the high, over 11% unemployment. As for subsidies on prescription drugs, Szijjártó claimed that consumers will not have to pay higher prices. That might mean some kind of extra tax on the Hungarian pharmaceutical industry, which could be a considerable blow to one of the few Hungarian economic success stories. As for transportation, until now Fidesz resisted any reform. They opposed higher rates as well as closing practically unused lines. In fact, they restored several that had been closed by the Bajnai government. Of course, it is possible that they will pursue an entirely different course and will raise fares, but it will be difficult to explain to the people that this is not a “restriction.”

And finally, Orbán talked about “the harmonization of the budget of the member states of the European Union.” In typical fashion, Orbán was against “harmonization” but he was for “coordination.” Apparently that means that within the euro zone the members can “harmonize” to their hearts’ content, but outside he doesn’t have to stick to the strict rules. Most likely that is one reason that Orbán no longer wants to belong to the euro zone. This way Hungary could have greater fiscal freedom than the European Union, the investors, the IMF, and the ratings agencies demand. That goes against the European Union’s directives.

The answers to these questions will come in a few months. Orbán at the moment has an immediate and difficult task ahead. Tomorrow he will have to go to Strasbourg to answer some hard questions about the media law. He will not be in an enviable position. Even some of the European People’s Party’s politicians are leery about his policies in Hungary. Almost all parties in the European Parliament promised to ask tough questions. One newspaper article on the subject called it a “grilling.” We will see whether he will be as feisty and unbending as he normally is.

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John G
Guest

“So, basically Török approves of the kind of double talk Orbán is famous for. To say one thing to a foreign audience and something else for home consumption. The question is, of course, how long one can play this game.”
That of course is a rhetorical question, since the answer is self evident. But….
“There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.”
Like him or not you have to admire Orban’s guts. Or is he just a power mad politician, in which case fate will hand him the same ignominious end it provided other megalomaniacs.

Member

I can’t help thinking that Orban is a Hungarian Juan Peron: a populist demagogue pursuing policies that will ruin his country yet somehow he remains loved by his supporters regardless.

Öcsi
Guest

Interesting comment, David. However, the military in Hungary, unlike in Argentina, doesn’t play politics and there’s no Evita.

John G
Guest

re: photograph. Just like the message, so too is the body language in the above picture: confusing. Hard to present genuine emotion while eyes down cast reading a prepared script. As a result the clenched fists, distorted jaw look contrived.

An
Guest

Orban once used the phrase “verbalisan megoldhato” meaning, it can be solved verbally. He keeps applying this tactic to everything.. but twisting words can carry you only so far. A good advertising professional knows that slogans only work if the product is good. So in the end this government will also be measured by its acts and achievements.

Odin's Lost Eye
Guest
Ah! I have found a little ‘something’. It was imbedded in one of my Anti cookie systems. It talks to my ISP. My internet was ‘down’ from 2PM CET until midday Monday 17th. To our secret readers do not try that again! I have 3 machines one of which never goes on line and they are mirrors. By Jove I must be annoying some one. I do not know what is going on but ‘little businesses’ are ‘dying like flies’. The ‘little shops –in the garages’ have almost all vanished. Or rather the people who worked in them were fired and the shop owners were too lazy to work them. Yet I see the people with their wallets stuffed with notes and their shopping trolleys loaded to the ‘gunwales’ with goodies, loading their 2-3 litre almost new quality motors. Where did all that cash come from? No Mr Moore they were not Gypsies. In the matter of ‘Early Retirement’ some ‘services’ allow early retirement and pay their ‘service pensions’ which are not funded directly from government sources. The state pension does not cut in until they reach the state retirement age. The early retirees are expected to continue to work… Read more »
Kevin Moore
Guest

This short response from Nigel Farage (UK) to today’s EU parliamentary debate is absolutely worth watching:


Eva S. Balogh
Guest

Kevin Moore: “This short response from Nigel Farage (UK) to today’s EU parliamentary debate is absolutely worth watching:


This quote must have been difficult to find because this was about the only one pro-Orban. The rest was terrible. They compared him to Chavez.

Julie
Guest

Staying out of the Euro, for now at least, might not be a bad idea. There’s a very interesting article in last week’s New York Times magazine on the subject by Paul Krugman. I’ll see if I can get the URL to work.

Julie
Guest
Kevin Moore
Guest

Eva: who cares if left-liberals compare Orbán to Chavez? They should decide if such a comparison is a honourable mention or not, they are in the same league as Chavez, after all…
And your allegation about Farade’s remarks being the only pro-Orbán is simply untrue. Orbán’s goal was to have the EPP caucus, the largest one in the EU parliament side with him, and he clearly succeeded.
Look at his counter-response to all the critics and look at their reactions. Orbán was finally at his best again, full with adrenaline, and he dispatched his opponents very convincingly. It is perfectly clear who won this round in the EP.
I was only hoping to see this kind of OVi in the debate. He fiercely defended Hungary and I’m proud of the way he stood up.

Eva S. Balogh
Guest

Kevin Moore: “Orbán’s goal was to have the EPP caucus, the largest one in the EU parliament side with him, and he clearly succeeded.”
No, he didn’t. Both Barroso and Daul said they are expecing changes in the media law. That is not really support.

Kevin Moore
Guest
Expecting changes, and to what? Do you know what objections the OSCE now has against the media law? Do you know how the previous charges have been reduced to 3 (almost) completely insignificant matters from the huge hysterical outcry for “democracy”? We’re now talking about allegations like for example the new media law being too restrictive on on-demand video media originating from foreign countries… This is nothing else than a backing out by the critics who, to avoid complete face loss, have to maintain a few open points. But essentially they gave up all of their heavyweight charges. This is a direct link to Orbán’s counter-response, with all language tracks included (default is the English interpreter): http://vod.europarl.europa.eu/download/nas/nasvod01/vod0501/2011/wm/VODUnit_20110119_12434300_12563800_-3bfebd6e12d96e782f5-2fd1.wmv Look at the way he delivered his speech, talking very assertively throughout, almost completely without paper. Most of his opponents in Hungary say with malicious joy that Orbán is only able to speak within his own friends and from paper, but no longer at an audience of critics. This occasion is the clearest proof of the invalidity of this envious misconception. This day of speeches was the trial for Orbán and Hungary. If he folds, if he can be forced to back up… Read more »
Öcsi
Guest

Kevin Moore wrote: “This short response from Nigel Farage (UK) to today’s EU parliamentary debate is absolutely worth watching:”
Kevin, do you and some Hungarians have a penchant for picking losers? Did you not hear the laughter and snickers as Farage was speaking?
He seems like a professional Eurosceptic who harangues people but offers nothing but the dismantling of the EU. I guess he too would rather go back to fighting and settling old scores. Total madness!

John G
Guest

As it is clear from Mr. Moore’s last comment OV’s performance today will certainly impress the folks back home, and understandably so. But personally I am afraid that the rest of Europe will remember Daniel Cohn-Bendit’s ripost to OV rather than OV’s defense of Hungary.
What D C-B is doing in an elected position is beyond me but his comment today will probably stick to OV like glue: Today you invited me to lunch, but you take way my appetite.
It is such sound bites and not OV’s doublespeak that will form OV’s international reputation.

Kirsten
Guest

@Kevin: The left-libs probably have to completely re-think the strategy, but they are in a more difficult situation now as Orbán gained considerable respect among the non-hostile with his performance.
First one has to get acquainted with this slightly different type of thinking that you represent too. I read your posts and try to make sense of it but what I understand easiest is that there seems to be a permanent war against the self-declared “moderates” (= Fidesz) in and around Hungary. But no, not every criticism of what some Hungarian politicians do is meant as a humiliation of or war against the Hungarian nation. Criticism of OV in the European parliament is neither meant to humiliate “Hungary”, but nor is support for OV in today’s session meant as a declaration of eternal faith. It really needs getting used to that every disagreement is seen as a matter of life or death.

Member

If anyone ever doubted that we have some bloggers here who are feed by the Fidesz, this is how Orban tried to avoid criticism (it ill sound familiar):
‘I cannot accept any politically legitimate actor of European politics to say and to question that the Hungarian democracy is not in the right shape, because that is an offence to the Hungarian nation,’ he insisted.
His political foes were not impressed.
‘We are not criticising the Hungarian people by criticising an act of parliament,’ Schulz protested.
‘When he pretends here that we have said something against the Hungarian people, that is national populism,’ Cohn-Bendit charged.

Kirsten
Guest

@Julie: Staying out of the Euro, for now at least, might not be a bad idea.
So far, Hungary has never fulfilled the criteria for joining the euro area. There were numerous targeted entry dates but none was seen as sufficiently binding to try harder to meet the criteria (for instance the fiscal deficit but also inflation). I am not sure whether the words of OV could not simply mean that he does not intend to be constrained by the criteria in the future either.

Kirsten
Guest

@Kevin: This day of speeches was the trial for Orbán and Hungary. … Look at the way he delivered his speech, talking very assertively throughout… Orbán didn’t leave one single question open in this regard.
I think it is worth a national holiday.

Paul
Guest

“This short response from Nigel Farage (UK) to today’s EU parliamentary debate is absolutely worth watching:”
Thank you, ‘Kevin’, I haven’t laughed so much in weeks!
When nutters like Farage are your ONLY support you really are up the creek.
Perhaps you don’t understand just how funny/sad this is, from your determindely pro-OV/Hungary-centric position, but it really is too funny for words.
Moore please! (see what I did there?)

Paul
Guest

“He fiercely defended Hungary”
To you, that’s what it looks like, but what he’s atually doing to Hungary is something else altogether.
In deference to Éva and her more polite readers, I won’t spell it out.

Vándorló
Guest
I have to confess, I always have a hard time picking through the inconsistencies your biases introduce into your reasoning. Here we have two principal points: 1. Is it appropriate/right to lie to an electorate. 2. Is Gyurcyány’s lie worse than Orbán’s. Let’s take them in reverse order. Concerning Gyurcyány lying to the electorate in 2006: a. His lying was leaked, he never told the electorate the truth, nor faced the real consequences of admitting to his electorate that he had lied. b. He informed a closed circle of party insiders at an exclusively party event (held and paid for by us tax payers, however). It was never intended for public consumption. c. The findings on who leaked the tapes of his lies speech was put under a top secret non-disclosure order for an unbelievably inappropriate length of time (I can’t remember exactly, but is was at least 30 years). d. When I raised this point and questioned you about it on the 22nd February last year, you responded with: “As for Gyurcsány’s lying to the voters is simply not true. He didn’t lie. He simply didn’t make public how bad the situation was. No sane politician would do that… Read more »
Eva S. Balogh
Guest

Vandorlo, I’m afraid you didn’t read my piece very carefully. I wasn’t talking about Őszöd. I was referring to Gyurcsány’s telling the truth about the state of the economy after the elections.
I would also advise you to refrain from personal attacks on others. Especially questioning other people’s integrity.

Vándorló
Guest

@ESBalogh: It is difficult to square that response with your statement above: “According to him [Török Gábor], Gyurcsány made a mistake in telling the truth in the summer of 2006, a mistake that Orbán must avoid making.”
The lengths to which one must go to avoid calling Gyurcsány a liar and still be free to castigate Orbán is pure casuistry.
n.b. Your ‘advice’ is always warmly welcomed.

Eva S. Balogh
Guest

Sorry, you’re still off base. Török says that Gyurcsány was wrong telling the truth after he won the elections. The truth was that an austerity package must be introduced. On the other hand, Orbán was politically right when he said that no “restrictions” are forthcoming when they they have been and will be introduced.
But even if you think of Gyurcsány’s not telling the whole truth about the state of the economy. There is a difference between outright lying and not revealing the whole truth.

Vándorló
Guest

@ESBalogh: This argument isn’t made above. What is above is completely ambiguous. Having said that, my charge of wanton casuistry concerning the charge of who is a liar still stands.
To understand what your argument was I had to dig out the articles and media upon which it reflects. Other readers might like to read the Tamás Bauer one to fill in the missing links: http://bit.ly/f5MpgD

Kirsten
Guest

@Vandorlo: The sorry state of public finances in Hungary was no surprise to many analysts in and outside Hungary. But in pieces that commented why it is so difficult to reduce deficits a typical argument went: the electorate is unable to swallow that. These opinions were written in freely available publications. So for an outsider (who admittedly had to watch the Hungarian economy) the big question is: why exactly only few people were willing to listen before?

Vándorló
Guest

@ESBalogh: I’m sure you’ve seen this, but the sake of your inevitable future MSZP fueled comments, Török Gábor has attempted to address most of your biased digs: http://www.facebook.com/video/video.php?v=10150126472084813