Viktor Orbán’s reaction to the non-negotiations in Washington

I guess I could write about Tamás Fellegi’s Washington trip, but I don’t think that it is necessary to spend too much time on it. Christine Lagarde, managing director of the IMF, issued a terse statement right after the meeting that took place late afternoon yesterday. Lagarde “indicated that, before the Fund can determine when and whether to start negotiations for a Stand-By Arrangement, it will need to see tangible steps that show the authorities’ strong commitment to engage on all the policy issues that are relevant to macroeconomic stability.” The last sentence was perhaps the most important: “Support of the European authorities and institutions would also be critical for successful discussions of a new program.”

Reports from Brussels presented the story somewhat differently. A Reuters report assumed that Fellegi’s pitch must take place in Washington. However, it is becoming clear that there is perfect cooperation between the European Union and the IMF. After all, it was only a couple of days ago that Christine Lagarde talked in person with important politicians of the European Union, including Angela Merkel. Newspapers reported that one of the subjects of their conversation was Hungary. Just as Portfolio, a Hungarian economic website, reported that “Lagarde remained firm and Barroso resolute.”

The conversation between Lagard and Fellegi ended shortly after midnight Hungarian time. The next morning Viktor Orbán, who held his usual Friday morning radio-talk on MR1, claimed that although he and Fellegi are in constant touch he hadn’t heard anything about the outcome of the negotiations.

This is unlikely. Moreover, it is enough to look at Viktor Orbán’s puffy eyes to know that the prime minister didn’t sleep very much last night.

MTI’s official caption: Prime Minister Viktor Orbán is smiling before his interview on MR1

So, I think we can safely assume that Orbán knew that Tamás Fellegi was unable to convince the IMF of anything and that Hungary’s only remaining options must be found in Europe. But success there, according to most commentators, is close to nil.

If Orbán knew the outcome of the conversations, why was he so cocky during the interview? He emphasized that Hungary is still at odds with the European Union over the legislation on the central bank although he knows that this is one of the most important demands of the European Commission. As far as the judicial system is concerned, Orbán considers this a “Hungarian issue.” He specifically referred to the early forced retirement age of judges and expressed his surprise that the European Union had any problem with the new law considering that the European Union in general likes clear-cut and transparent regulations. This is what the Hungarian government wanted to achieve: everybody’s compulsory retirement age is 62. No exceptions. A statement that is, by the way, not true. As far as the position of the ombudsman for data protection is concerned, according to Orbán it is “only a speck of dust in the machinery.” The government wanted to reorganize the whole ombudsman system. The current holder of the office objected to it and didn’t want to remain if the office was reorganized. So, they simply named a new ombudsman. That’s all. They will explain the whole thing to the Commission.

He was asked about the possibility of bankruptcy, which Orbán denied adding that “it is easy to spread rumors whose ill effects the Hungarian people suffer … the foreigners bring their money here because in all of Europe buying Hungarian government bonds is the best deal. Meanwhile they scare the Hungarians with the possibility of bankruptcy who in turn begin to move their money abroad.” Finally he repeated that “speculative swindlers are pulling the strings.” This is what has an adverse effect on the European currencies. Orbán’s irresponsible xenophobic propaganda and his outright lies about the real reasons behind the problems of the Hungarian currency are really deplorable. This is demagoguery at its worst.

Orbán is trying to mislead the Hungarian people in other ways as well. For example, he indicated that the “negotiatiations with the IMF are only about one thing: what kind of economic policy is necessary for the repayment of the loan.” According to him there are two important factors in this respect, both of which already exist in Hungary: a low deficit and decreasing sovereign debt. If Orbán were right, Hungary wouldn’t have to do a thing. The money would pour in from the IMF as well as from the financial markets.

Finally, he repeated for the umpteenth time that he “can imagine only an agreement that serves Hungary’s interest. The IMF has no interest of its own that is separate from that of Hungary.”

And finally, I would like to share a picture of Tamás Fellegi with Christine Lagarde. I checked on the Internet and couldn’t find another picture of him where he is smiling. But look at this picture, taken before the meeting with Lagarde.

Tamás Fellegi and Christine Lagarde

Perhaps his smile is a little too forced. I have the feeling that in the next few weeks there will not be many reasons to smile.

The rats, by the way, are leaving the sinking ship. Zsigmond Járai a couple of days ago gave up his job on the Fiscal Council claiming that his business activities don’t leave him enough time to do a good job. By today, he quite openly admitted that he can’t support Viktor Orbán’s economic policies and that a complete change in direction is necessary. Otherwise, serious economic and financial troubles are in store for the country. In the past there was no one who so steadfastly supported Viktor Orbán as Járai. He even mentioned the necessity of a change in personnel. It is well known that he is not exactly a fan of György Matolcsy. But I have the feeling that it may not be too far from Járai’s thinking that there might be other victims of Hungary’s economic problems. And after all, he as a former minister of finance and governor of the central bank might have an important role to play. Perhaps in a technocratic government an economic and financial expert could end up as the new prime minister.

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Paul
Guest

I know he is spinning for his life, but “there are two important factors in this respect, both of which already exist in Hungary: a low deficit and decreasing sovereign debt” is so wrong it defies belief.
He might claim that the debt would have been reduced without the collapse in the forint (ignoring the reasons why the forint collapsed, of course), but the deficit missed the 3% target by a mile this year.
A fact even Fidesz numpkins could easily check.

Paul
Guest

That picture is certainly worth a thousand words.
Not only does Fellegi look ridiculous (in a country where the women dress so stylishly, how come the men look such a mess – and who told him a Father Christmas beard suited him?!), but LeGarde’s body language says loud and clear “I do not even want to be in the same room as this ridiculous buffoon”.
Snow White and the one (mental) dwarf.
And another picture for you – http://szarvas.tumblr.com/post/13919653833/ezt-meg-az-elejen-csinaltam-amikor-elkezdtem-ezt

Living with it in Hungary
Guest
Living with it in Hungary

I hope Fellegi enjoyed the tea ‘cos that’s all the IMF was planning on serving up according to everything they and the EC have said. Maybe in Brussels they’ll serve him a nice beer ‘cos that’s about all he’s going to get there.

GDF
Guest

Eva:”And finally, I would like to share a picture of Tamás Fellegi with Christine Lagarde. I checked on the Internet and couldn’t find another picture of him where he is smiling. But look at this picture, taken before the meeting with Lagarde.”
Lagarde’s crossed arms signify rejection (ask any body language expert).

Paul
Guest

It’s not just the crossed arms – she actually leaning away from him!

cheshire cat
Guest

GDF: How true. That’s exactly what I thought – the crossed arms, her body leaning away from Fellegi and her facial expression all suggest rejection.

Paul
Guest

I wonder what arms by your side, belly stuck out, jacket buttoned up, eyes closed and moronic grin say about you?
Imagine if he got on the bus and the only spare seat was next to you!

GDF
Guest

Paul:”I wonder what arms by your side, belly stuck out, jacket buttoned up, eyes closed and moronic grin say about you?”
Many possibilities:
– he is a moron
– he is not used to wearing a suit
– the suit he was wearing doesn’t fit him (maybe he gained weight) but he didn’t try it on before his trip
– he knows you are supposed to smile during a photoop, but maybe his teeth are missing
– maybe he forgot to use his deodorant that morning, that’s why Lagarde is leaning away (in which case the bus scenario is scary)

Paul
Guest

Try my link at 4:42 – you’ll never be able to look at a photo of Fellegi again without smiling!

I love Hungary
Guest

@Eva, if I were you I would tone down the rhetoric with regards to “rats leaving the sinking ship”.
A split within FIDESZ would be ideal right now.
Focus on the goal. Not vengeance.
Hungary really needs to do that, someday.

Member

@Paul You know what is the thing, right? My kids loved it …


Odin's Lost Eye
Guest
It will be interesting to see how the FIDESZ spin Doctors write this one up for the ‘Natives’! Professor you also write ** “As far as the position of the ombudsman for data protection is concerned, according to Orbán it is “only a speck of dust in the machinery.” The government wanted to reorganize the whole ombudsman system. The current holder of the office objected to it and didn’t want to remain if the office was reorganized. So, they simply named a new ombudsman. That’s all. They will explain the whole thing to the Commission” ** How? How will they laugh that one off? A little of topic, except that it reflects the current economic woes in Hungary. The local supermarkets are currently ‘Culling’ their product line ranges. They seem to be removing any product where the ‘stock turn over’ is greater than 3 weeks. They are also reducing their stock holdings to 7 to 10 days stock. Normally a supermarket will hold an average stock of 10 to 14 days demand. They are doing this to reduce their total inventory value and the capital invested in stock. It will also improve their cash flow situation. What do they know?… Read more »
whoever
Guest

Hi OLE, I’m not sure that the facts correspond with this – supermarkets are always trying to reduce total inventory – and could never achieve 7 to 10 days on most lines. There’s no evidence that chains are responding to the uncertainty, beyond checking contingency plans behind the scenes.

nwo
Guest

Jarai jumping off the sinking ship is very telling. His political instincts have been good (even as his economics are pretty poor). He has also been very loyal to Orban in the past, and i had assumed was standing by to replace Simor when Orban finally removed him. My guess is that Martonyi will be the next to jump. No one (even someone adept as Martonyi) can keep so many irreconcilable ideas in his/her head at the same time!

Paul
Guest

Mutt – it’s one of my favourite Hungarian cartoon (although a little disturbing!).
The crow(?) who likes chocolate has become a household favourite. Whenever there’s chocolate, everyone goes round saying “csokoládé, csokoládé, csokoládé” in crow voices!
Unfortunately, I happened to be looking at HS on my phone when I followed your link, so the kids now know that my phone plays YouTube videos – something I was trying to keep from them!

Paul
Guest

nwo – Martonyi resigning would be a hell of a shock to the Orbán camp. Difficult to believe it’s likely though, especially when he is currently popping up all over the place as the ‘respectable face’ of Fidesz.
If he really was having serious doubts, would he have agreed to do all this desperate PR stuff?

Eva S. Balogh
Guest

nwo: “Jarai jumping off the sinking ship is very telling. His political instincts have been good (even as his economics are pretty poor). He has also been very loyal to Orban in the past, and i had assumed was standing by to replace Simor when Orban finally removed him.”
That was exactly my feeling when I saw his rather diplomatic announcement. But by yesterday he wasn’t diplomatic at all. He was close to demanding Orbán’s resignation.
As for his economics, again I agree with you. He was a lousy and politically motivated bank governor.

Member

Viktor’s International Media Liason Officer has just had a piece on the BBC’s World Service:
http://www.bbc.co.uk/programmes/p00msxgf#synopsis
Interesting to hear that a Fidesz insider told him as far back as last year, “this is not the time for checks and balances”. I suspect it never will be that particular time on “Planet Orban”.

Eva S. Balogh
Guest

Here is a CNN video. Interview with Zoltán Kovács, man in charge of foreign communication.
I bet he was surprised at the tone of the interview. He is not accustomed to such hard questions. It was nice to see him in this position because usually he comes out on top in interview situations.
http://edition.cnn.com/video/?hpt=ibu_t3#/video/world/2012/01/12/qmb-intv-hungarys-bailout-quest.cnn

Guest

Richard Quest is a precise pile driver! Kovacs consistently saying ‘we know what we are doing’. Do they never wonder why no one else ‘sees’ what they are doing the way they see it?

enuff
Guest

Richard was great here, even Kovacs couldn’t resist and smiled!
Best part from Richard :
why pass the law in the first place, secondly why not change it?
You know you’re gonna have to change it, the sooner the better..
You have to agree surely it is slightly embarrassing for a gov. to say 2 or 3 months ago , 2 fingers up to the IMF, we don’t need them and then the next thing we’re on a plane to Washington!!

Eva S. Balogh
Guest

Breaking news: András Schiffer, head of the LMP parliamentary delegation, resigned his post because the majority of the party leaders don’t agree with his “go alone” policies instead of working together with other democratic parties.

Member

@ I Love Hungary, Maybe Eva wasn’t politically correct how she said what she said, bust she just expressed what most of us think. If you look back the last month’s post also, this move from Fidesz’ career politicians have been predicted. I call career politicians those tags who blow with the wind for better pay cheques or for better positions. You will always find them on the predicted “winner’s” side. Schmitt is a great example too.

I love Hungary
Guest

Some1, the main problem with Hungarian politics right now is that the anger (perhaps justifiable) of the innocent, alongside the long term, guilt charged, animosity/ hatred of the evil on right and left combine to continually swing the pendulum of power into the hands of either tyrants or the corrupt.
Just as FIDESZ (nevermind Jobbik) will be fatally flawed for as long as they deny the fact that communism replaced facisim in Hungary (and not any semblance of democracy)— the liberals in Hungary will also be in fatal denial so long as they don’t face up to the reality that it was the blatant corruption of the Gyurcsany mob that drove an alienated voter base so far into Orban’s hug of death.
In fact, facsism arising from a popular uprising against corruption is prototypical.
No matter how justifiable- the good liberal/conservative democrats of Hungary MUST, at some point, put aside their anger, in order to finally lead Hungary into a rational, democratic, liberal vs conservative debate.
So long as the good remain angry, the hate-mongers or the corrupt will remain in power.
This has nothing to do with being “PC”. It is all about a fatal, structural flaw in the electorate.

Paul
Guest

Interesting news, Éva. Now we’ll see if LMP was just a Fidesz style one-man party or the real thing.
Could be the end of LMP, or it’s beginning as a real alternative party with, hopefully, greater appeal. And the end for Schiffer – or the beginning of an Orbán-like career?

Member
Eva: Schiffer resignation is an interesting twist. Will he orm his own party as Gyurcsany did, I wonder. @ I love Hungary, I do understand where you coming from, and I do respect your more open position. I think what provides the frustration to Eva is similar what provides my frustration (and I am not speaking for Eva here, I am just making assumptions that her view on this is similar to mine).There are a group of people in Fidesz who did not forgive, and for the contrary, they rubbed it in where others came form, what their motivations were. Just like Orban who came from humble communist party beginning, just like Kover and Deutsch who had no problem to serve the regime prior to 1989, when it became their turn to hold the power, one of the way they tried to keep out others from any advancement is running a PR campaign against their own past comrades. At many-many occasions on this forum it was brought up that there are not to many people who did not serve the Kadar regime one way or another. There was nothing malicious about trying to get into university or trying to advance… Read more »
Kingfisher
Guest

I’m intrigued why you suggest there is even a finite possibility of Schiffer enjoying a political career, let alone an Orbán-like one. He will be never heard of again. He was an uninspiring individual, a poor speaker, and totally out of his depth when it came to economics. And with Hungary drifting towards a one-party state, and the only practical solution being a coalition of anyone with vaguely normal values, his ambitions for the LMP as an independent force was frankly ridiculous (in my view, of course!) The LMP is a kind of “green party” but in truth, was voted for by those who previously looked to the SZDSZ as the only party with a West European outlook. I think Schiffer failed to appreciate this and I doubt the LMP will exist after the next election. It’s sad because many of their MPs are decent and intelligent people, qualities that are in short supply in the Hungarian parliament.

An
Guest

Eva, great news.. hopefully, it will be possible for the opposition parties and groups to work together.
They could start with drawing up some document, a “charta” if you will, outlining the principles they all can agree on and what are the common goals: getting rid of the autocratic OV government, re-establishing/strengthening democratic institutions and checks and balances,etc. And one more important thing I think they should agree on: increasing transparency, fighting corruption and cronyism in Hungarian politics. This is what made voters loose faith in democratic political parties and it is imperative that democratic parties regain credibility in the voters’ eyes.
I believe expressing commitment to democracy and transparency will still leave room for each party to offer their individial platform (green, new-left, traditional social democrat, liberal, liberal-conservative, you name it).

Kirsten
Guest

I love Hungary: “It is all about a fatal, structural flaw in the electorate.”
If this is so, how come you are so confident this can be changed? How? It is this electorate that voted for Gyurcsany in 2006, and the same electorate that then was driven “into Orban’s hug of death”. I am afraid that this is what we have to start from. Both decisions were not made accidentally; they say something about political life in Hungary. Perhaps you should try to convince your friends in Fidesz, who are – as you said – true democrats to stop hiding. Otherwise it is easier to believe that the ‘past’ (Horthy, communism, MSzP years, Fidesz years, MSzP years again, Fidesz years again) cannot be just ‘shaken off’.

Guest

Maybe I know the wrong type of people here around Hévíz – No one that I talk to is on Fidesz’ side here, so I just don’t get it:
All these crazies who want back “Greater Hungary”, out of the EU etc – where are they (from) ? I haven’t seen or talked to anybody like this, although I have to confess that I just saw a few cars with their “H” signs and some had Greater Hungary as a background …
What are they thinking – if they think at all ???
Hungary leaving the EU – well some countries would be happy maybe – in the short run Romania and Croatia might profit, but in the long run having ans island in the middle of the EU, that’s not funny …
For many people it would mean an economic return to “socialist times” – unimaginable.
So what’s the idea of Fidesz – do they believe in a crazy way that the EU and the IMF will cave in/eat humble pie … ???
PS: Those are translations for the German expression “klein beigeben”
Hungary needs the EU/EEC/NATO/IMF etc – but these institutions could surely continue without small, insignificant Hungary …

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