On February 23 I wrote a post about the immediate reactions of the Hungarian government to the European Commission’s recommendation that part of the cohesion funds be withheld if Hungary doesn’t satisfy the requirement of having a budget deficit under 3% of GDP in 2012. And one-off measures to close the gap won’t count.
The reaction was an outcry that got more and more violent. At first, the Commission’s proposal was described as “unfounded and unfair,” but later the language got stronger. Viktor Orbán himself found the decision “illegal.” His office issued a statement that maintained that the Commission’s recommendation “contradicts the spirit of the Treaties since it imposes sanctions in response to a presupposed future event.” The statement ended on the standard stab at being conciliatory: “nevertheless the [Hungarian] government remains ready for continued consultations.”
There was still hope in Budapest that the Orbán government could garner enough support from the finance ministers of the member states, whose approval is necessary for the recommendation to be implemented. Orbán visited Germany while János Lázár was dispatched to France. Orbán in his speech on the occasion of the twentieth anniversary of Deutscher Wirtschaftsclub tried to show his best side. He set out to convince the politicians and businessmen present that investing in Hungary was a wise business decision. However, he couldn’t resist adding the following: “The Hungarian way of thinking makes a distinction between colonizers and allies. Those who are only interested in our markets according to our way of thinking are colonizers. Those who need our labor as well are our allies. Our relations with German businessmen are exceptionally good because they were the ones who understood most rapidly and most thoroughly this Hungarian way of thinking.”
The speech otherwise was full of criticism of the European Union’s “old-fashioned and obsolete ideas” that stand in the way of economic recovery. He also indicated that he was ready to speak before the finance ministers on March 13. Or, as he put it: “I’m ready to enter the lion’s den and enjoy myself there.” This was not just a turn of phrase. Orbán seriously thought that he could repeat his performance at the European Parliament where he showed his sensible and cooperative side. He was seriously planning to attend the meeting of the Council of Europe prior to the Ecofin meeting. There were many optimistic statements to the effect that Hungary will be able to convince enough finance ministers to support the Hungarian position.
The lion’s den: meeting of the Ecofin
Ildikó Csuhaj, the well informed journalist of Népszabadság, learned from reliable sources that Orbán was already working on his speech which he hoped would change the minds of Europe’s finance ministers. The Hungarian government was apparently hoping to win over the Austrians and perhaps the British in addition to some of the so-called Visegrád countries (the Czech Republic, Slovakia, and Poland). Orbán himself wanted to travel to Germany before the Ecofin meeting, but such a trip couldn’t be arranged and I’m almost certain that it was not Hungary’s choice. János Lázár also repeated the government’s position. They will not change course and “the battle is not yet over,” he said on February 27.
On March 1, Orbán was once again in Brussels to attend the summit of the European People’s Party. Here he made a rather puzzling statement about the dispute over the cohesion funds. “The whole thing is straightforward. It’s is a technical question that follows its own path and will be solved.” On the same day János Lázár reported from Paris that he had a meeting with Jean Léonetti, the minister in charge of EU affairs, who apparently assured Lázár that he doesn’t believe the charges of the media and the Hungarian opposition that democracy is endangered in Hungary. That’s all very nice, but it does not translate into French support of Hungary on March 13.
It became clear only on Friday, March 2, that Orbán’s efforts had failed. In his regular Friday morning radio conversation Orbán admitted that the Union’s finance ministers will most likely endorse the recommendation of the Commission. He assured his listeners that Hungary within six months will remedy the situation and therefore the country will not suffer a penny’s loss.
By the time Orbán returned to Brussels to sign the eurozone treaty later in the day he was enthusiastic about the Union’s economic and financial prospects. He even welcomed the strict rules imposed on the member states and admitted that strict budgetary policy will benefit Hungary in the long run. He no longer claimed that his government has pursued a successful economic policy but said instead that “the direction is correct and there are some signs of success already.” He promised that by the time the finance ministers gather in Denmark they will have in front of them the Hungarian proposals on adjusting the figures for the 2012 budget.
He added that Hungary had abandoned the idea of trying to get allies in Ecofin because he doesn’t want to make a political issue out of an economic question. A complete turnabout, and then Orbán wonders why his colleagues in the EU don’t trust him.