Viktor Orbán, who can teach Europe a thing or two

It's time to return to Viktor Orbán.

Earlier I discussed his shifting response to the European Commission's decision to withdraw part of Hungary's cohesion funds as of January 1, 2013 if Hungary doesn't comply with the Union's strict rules on the size of its deficit. I summarized the changes that took place in the Hungarian government's attitudes during one week. From questioning the legality of the decision and embarking on soliciting support from the Economic and Financial Council (Ecofin) of the European Commission, Viktor Orbán within a week completely reversed himself and by March 2 almost seemed to welcome the decision or at least tried to make light of it. After all, a little adjustment of 0.25% takes no real effort. Hungarians can be assured that the country will not suffer any loss of the cohesion funds. By the time Ecofin gets together in Denmark on March 13 the completely reworked budget numbers will be in front of the twenty-seven finance ministers. No problem.

Before I return to an entirely new phase in the life of the mercurial Hungarian prime minister I should mention that meeting the target may not be as easy as Viktor Orbán thought last Friday. The number crunchers in Brussels took a second look at the state of the Hungarian economy and came out with new predictions. Instead of the hitherto projected 2.75% deficit they changed their estimate to 3.0%. As for 2013, it is no longer 0.25% that has to be remedied but 0.60%. I might add that the Hungarian government's estimate for 2012 was 2.5% and for 2013 2.2%. But the problem might be even greater. In February the country posted a budget deficit of 393.3 billion forints ($1.74 million), taking the deficit of the first two months to 294.8 billion, or 32.1% of the full-year deficit target, adjusted for one-off measures, the ministry said in a release.

So, while a week ago Viktor Orbán was all smiles in Brussels, looking like a team player, the very next day came the bombshell: Viktor Orbán gave an interview to the Frankfurter Allgemeine Sonntagszeitung in which, among many self-contradictory statements, he emphasized his own overwhelming support and therefore great legitimacy, adding: "But who elected the European Commission? What is its democratic legitimacy? And to whom is the European Parliament responsible? This is a very serious problem in the new European structure." A complete Hungarian translation of the interview can be found in Galamus.

One's first reaction is, or at least mine was,"Is this man out of his mind?" He is trying to get a loan from the International Monetary Fund. Negotiations about that loan cannot even begin until the European Union gives its blessing, and yet he makes a frontal attack on the very institution whose favor he is seeking. But that is not all. It was already known that the European Commission's decision about the accelerated infringement procedures would become public on March 7, Wednesday. So what was going on here? Was this some kind of inadvertent misstatement? I doubt it. I'm afraid all these attacks on the European Union are carefully planned.

A day after Budapest received the bad news from the European Commission, Orbán made a speech at a conference organized by the Hungarian Chamber of Commerce and Industry in which he launched another attack on the European Union. According to the Hungarian prime minister the EU doesn't assist member countries in overcoming the economic slump because "it punishes those who behave well and rewards those who perform poorly. With this kind of mentality one couldn't even run a village five and ten cent store (vidéki kóceráj)." As for the IMF negotiations he said: "I have been sitting at the conference table for two months but they are nowhere." Only someone who has no intention of negotiating with the IMF and consequently has no pressing need to oblige the European Commission can speak this way.

Orban, angol hulyek
"Stupid English, English stupidos!" Gábor Pápai's caricature, Népszava

Unfortunately Brussels listened. President Pál Schmitt paid a visit to Brussels a couple of days ago and, after talking to José Manuel Barroso, he admitted at a press conference that the president of the European Commission "resented" (rossz néven vette) Orbán's words on the illegitimacy of the Commission. Schmitt apparently assured Barroso that "the Hungarian government considers the Commission, the Parliament and the Council legitimate and important decision-making organs." At that time they still hadn't heard the quip about the village five and dime.

Although all important members of the Hungarian government keep repeating how keen Viktor Orbán and his team are to begin negotiations, there is increasing suspicion that this might not be the case. Viktor Orbán just lately announced that in his opinion the country will be able to finance itself from the markets for at least one or perhaps even two more years. Moreover, the market currently is assuming that negotiations with the IMF will begin soon, and therefore the forint has strengthened lately and Hungary has had no problem selling its sovereign bonds. My suspicion is that Viktor Orbán is counting on this trend to continue and praying for the economic climate to improve in the coming months. Some people suspect that in case there is a shortage of funds, the government will put its hands on the billions that remain in pension funds, money belonging to those who refused to submit to governmental pressure and didn't allow their funds to be incorporated into the common budget.

Although investors have been somewhat sanguine in the last two months, the mood might shift at any moment. One cannot count on a rapid European recovery either. Most analysts are talking about recession in Hungary instead of economic growth. So, Viktor Orbán is rolling the dice. In fact, according to some economists Orbán's economic policy is "suicidal." László Békesi, for example, thinks that the markets' trust may end next week when Ecofin decides on the fate of the 2013 cohesion funds.

Martonyi gave an interview in The Wall Street Journal in which he emphasized the Hungarian government's eagerness to begin negotiations. Tamás Fellegi, minister without portfolio in charge of the negotiatons that refuse to start, mentioned at the conference yesterday that he is visiting the headquarters of the IMF in Washington on March 16. However, Iryna Ivaschenko, IMF representative in Budapest, stressed that "at present no negotiations can be expected." Whatever Fellegi is doing in Washington, he's a little early for the Cherry Blossom Festival (that begins on March 20) and way too early for formal talks.

I don't think that Orbán will buckle under pressure from the European Union. I doubt that the Hungarian government's answers to Brussels's demands will be satisfactory from the point of vew of the Commission. I think everything will depend on the mood of the currency and bond markets. Orbán cannot outfox them forever.

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Jano
Guest

“But who elected the European Commission? What is its democratic legitimacy? And to whom is the European Parliament responsible? This is a very serious problem in the new European structure.”
Yes, OV is an idiot and again choose the worst time to open his mouth to share some philosophy, but these questions are pretty legitimate and constitute one of the most fundamental problem of the EU. You as a democrat should certainly agree that the commission is not just a beurocratic center anymore but bears considerable political influence and should be democratically elected by the citizens of the EU. In the current state how could one expect the average European citizen to feel connected to the EU and its “government”?

Paul
Guest
He thinks he can raise the money he needs on the bonds market, because bond rates, foreign exchange, etc have been steady/positive recently. And yet he doesn’t seem to understand that the reason they have been steady is that the markets expect an application to the IMF in the near future. He is effectively sawing off the branch on which he is sitting. Nothing we’ve seen from OV over the years suggests he is this stupid, so why is he so determined to avoid the IMF? It’s not going back to the IMF as such, any loss of face he might fear there has already happened – so it must be the EU requirements. But, here is the puzzle, because, considering all the things they could have picked, the three they actually came up with would hardly trouble most nascent dictators. So, what is it that OV so badly wants to avoid giving in to the EU on that he’s prepared to wreck the economy instead? It’s not the Central Bank, as he’s already made positive noises there, and I can’t see OV being that bothered about the Human Rights Ombudsman. So we’re down to the early retirement of the… Read more »
Eva S. Balogh
Guest

Jan: “Yes, OV is an idiot and again choose the worst time to open his mouth to share some philosophy, but these questions are pretty legitimate”
Sure, from a political scientist but not from a politician who needs the EU’s goodwill.

Eva S. Balogh
Guest

Paul: “this man is prepared to bankrupt the country he is supposed to care so much abut because Gyurcsány made a fool of him on TV six years ago.”
Not far from the truth. I saw it. It was a knockout.

Paul
Guest

I should really have written that he made a fool of himself, assisted by Gy.
This guy is so mentally twisted that he is burning for revenge – at all costs – against someone for something he really did himself.
In a sane system it is he who would be locked up.

Guest

London Calling!
Eva and Paul?
Is this spectacle available anywhere on the internet please?
(I suspect not as you would have posted it – but it’s worth a try!)
Regards
Charlie

Bowen
Guest

@ Charlie:



I’m looking forward to the 2014 Prime Ministerial Debate. Apparently, Orban will be discussion serious, challenging questions with a full-length mirror, having run out of other enemies to puff himself up at.

Petofi
Guest

Well, people are slowly coming around to the notion that Orban’s out to ruin the country. The only thing to keep the rank and file in line is money. Has everyone noticed who is coming to the March 15th festivities? Yes, the Poles. Isn’t that the country that underwent a unique form of “regime change”?
Ok, so I’m a conspiracy theorist but you know the one about the fellow who, though he may be paranoid, may just the same have been threatened….
By the way, there’ll be no Orban in 2014. He’ll be long gone.

Paul
Guest
Thanks for the link, Bowen, I’m surprised it’s still up! That handshake was interesting! I wonder if it was the last one? And Orbán looks even shorter than he is when face to face with Gyurcsány. Interesting to contrast the styles too. Orbán looks noticeable less at ease, even at the beginning, constantly fidgets and refers to his notes, and always talks to the camera. Apart from swaying about a bit to much, Gyurcsány looks much more reassured and focussed, never looks at his notes while he’s talking, and, oddly, hardly ever looks at the camera, nearly always addressing Orbán directly. That last point really struck me, used to UK and US politicians on TV as I am. Without exception here and in the US, they are trained to address the camera. Gyurcsány would have been severely reprimanded by his party’s PR people for not looking at the camera. And yet, in this context, it works. Gyurcsány is clearly speaking directly at Orbán and pinning him down. Orbán’s constant addressing the camera actually starts to look like he is trying to dodge Gy’s questions by looking away from him. Orbán’s suit was a mistake as well. And again this is… Read more »
Living with it in Hungary
Guest
Living with it in Hungary
From David Lubin of CitiGroup in which he asked the question, what is wrong with Hungary. For most people it is obvious that Hungary has a problem but when you drill down it’s difficult to identify precisely what Hungary’s problem is. It is precisely because of the cloudy nature of the problem that it’s difficult to formulate a plan. Risk premium is drifting closer to Argintina’s spread. But it’s not about the current account balance. Low risk and high return in that interest rate is high, good current account balance. Hungary’s business climate isn’t so business friendly, not healthy but healthier than Poland, Czech, Italy, and Greece. Problem is growth. Hungary’s investment collapse in context with comparison with the rest of the region. Hungary’s unique vulnerability to external shock. The more open the economy the more vulnerable to global shocks. Export/GDP ratio is high because of the current dependence of net exports. Take away net exports there’s not much else that is going on. The collapse of domestic spending is the result of the deleverging process which will be long lasting and very painful. Hard deleveriging. Banks are funded with intra-bank loans and the parent bank takes repayment of the… Read more »
Odin's Lost Eye
Guest
The Viktator can and will win in his quarrels with the E.U/IMF. He only needs foreign exchange to pay his country’s foreign bills. His government’s internal bills he can pay by running the printing presses. For a time he can print money especially if he does this under strict control. It will have an effect on inflation but that will only become a real problem in 3 to 5 years time. He can make the Forint only exchangeable within Hungary. This is what the ‘Red Men’ did. They established artificial exchange rates with a minimum value of their coinage which you had to buy. In addition you could not import or export their coinage/notes so effectively their internal economy was isolated. Any exports were paid for in the local currency which the buyer had to pay in foreign cash. The exchange rate would depend on the exporting government’s need for that currency. Imports were simularly controlled by the government. There were other ‘tricks’ that they played on the visitor/traveller. The Bulgarians were very good at this caper. You had to pay for 14 days in a ‘standard hotel’ even if you were ‘just passing through’. For that payment you would… Read more »
Martin Eden
Guest

“But who elected the European Commission? What is its democratic legitimacy? And to whom is the European Parliament responsible? This is a very serious problem in the new European structure.”
Members of the European Parliament are elected by the people of EU member states(including Hungarians). Eur. Commission is then nominated by member states, but approved by the very parliament. Hungarian governemtn had a word in their nomination for the commission, it is not something impose on the poor country from abroad – we may discuss level of the legitimacy and quality of the mechanism, but this set up is to great extend result of attempt to make the EU project more trasparent.

Guest

Interesting thing:
The Forint firmed again. It was 298 to the € (a real spike on wednesday) now it’s back at 292 – what are the people in the market thinking ?
@Odin’s lost eye:
That isolation of the local currency in Bulgaria (and other Eastern block states) did only work because the whole country was isolated and there were strict checks on all tourists that came in – they had to show how much money they brought with them and how much they had when they left again …
Even in Yugoslavia you could circumvent all these checks – we never went to a bank for currency exchange, always to the local restaurants which exchanged at a premium of course – one of the reasons why holidays were so cheap there …
That type of border control couldn’t work in the EU of today.

Joseph Simon
Guest

Schmitt Pál is emerging as a steadying influence in the political life of Hungary. He is visitng communities large and small, emphasizing that the government’s two-thirds majority may well be an asset but also a responsibility not to exclude minority opinions. At any rate, the problems facing the country are daunting. Orbán cannot ruin something that has already been ruined over and over again. Even Swiss banks contributed to it.

GW
Guest
Joseph Simon, if Schmitt Pál is “emerging as a steadying influence” as you say, what does that say about a a government and a country that it depends upon a man who is a liar and a theft (yes, the act of plagiarism is appropriation of the work of others, a theft of intellectual property and the lie of claiming the work as ones own when it is not), who was a major functionary of a very public institution during the Soviet block era as well as of the IOC during its most corrupt years, someone who claims to represent Hungary and promote its language but who is unable to write in the Hungarian language correctly, and someone who has show absolutely no independence from the government in carrying out the duties of an office designed to be above politics? As to your statement that “Orbán cannot ruin something that has already been ruined…”, this is an astonishingly cynical and fatalistic statement. First of all, there is always a way out of ruin, it’s called good policy. It is likely to be long and painful, but ruin is not inevitable. If the very best that a government supporter like yourself… Read more »
cheshire cat
Guest
here is an interview with Bokros Lajos last night http://atv.hu/cikk/video-20120309_bokros_lajos For English speakers, he says : 1. Hungary will not be able to finance itself from the market without the EU/IMF loan, not this year, not next year or even after 2. what the EU are asking for is rational, professional and is in the nation’s interest. Orban is playing with fire and acting against the Hungarians’ interests by the screeching, offensive rhetorics and the delay. 3. Orban is using this offensive, populist, nationalistic approach because he thinks Hungarians will believe him and will be pleased by it. With Orban these koceraj like speeches are substitutes for real professional and rational analysis. 4. “The good ones are punished, the bad ones get a sackful of money”: Greece in fact has now signed up for 3 severe austerity plans to get the “sacks of money”, whereas Hungary hasn’t been able to show even signs of wanting to comply with the Maastricht criteria for 10 years. So for Orban to suggest that Hungarians are the good guys is again only an irresponsible attack on the institutions that are trying to help. My opinion is that Orban is not competent enough to give… Read more »
Member
@Joseph Schmitt (My bad! Simon) Probably Schmitt went to Brussels because that was the only place where is not greeted by protesters. Barroso give him a 10 minutes water cooler chat and the obligatory handshake photo op and he was sent home. Steadying influence? Bahahaha … His PR people desperately trying to set up speeches in Hungarian schools like in Szombathely recently. While he was talking about hard work (gag! barf!) to the students you could hear the constant chanting of the protesters from the outside. This was the moment when the bozo said this “responsibility not to exclude minority opinions” crap. When he was here in DC a few months ago, the Johns Hopkins School of Advanced International Studies invited him, he was astonishingly stupid. The guy only brightened up when he was talking about the “children who need less internet and more sport”. That’s pretty much his knowledge. Steadying influence? When 41% wants him to resign? That’s more then the hard core FIDESZ voters today. He is a shame. This joker has to go. Now that the parliament created a law called lex Schmitt, that guarantees his money for life even if he doesn’t finish his term. If… Read more »
Member
I apologize for pulling a Joseph Simon, but I need to repost this link. The article was published in the most influential Hungarian Catholic weekly, New Man (Uj Ember). When you read the text you cannot miss the similarities between the nazi thoughts of the early Twentieth Century Germany and the ideas of the archbishop, Dr Balazs Babel. Some of his gems are: “Sometimes we must recognize those moral choices when we must choose not between two good but between two bad situations. If we would of stayed out of the European Union.” He makes it clear that Hungary only choose the European Union because it would not not have been simple to cross to our beyond the borders’ Hungarians.” {Clearly he explains why Fidesz originally voted for Union membership.) “The slave holders now want to force us now -not with the stationed army- but with the power of money to obey them.” Isn’t that sound familiar form nazi propaganda against the Jews? “Painful that many of our Hungarians step in to their service, giving bad reputation for our country. Even more painful, that there are some among them who also unconditionally supported the other Union. ” (I believe he… Read more »
An
Guest

@Some1: The more I read about the Catholic Church, the more I want to become a Buddhist.

Paul
Guest

An – why exchange one lot of superstition based mind control for another?
All religion is dangerous for the same reason – it tells us what to think, then it tells us what to do.
The Buddhist may look friendlier than the Romans, but it’s really just exchanging mogadon for heroin.

Living with it in Hungary
Guest
Living with it in Hungary

@Odin’s lost eye, if OV were to implement any currency controls that would be the straw that breaks the camels back. I’m not sure but my guess is the EU treaties might even prevent him from being able to do that. He can, however, do what the greeks can’t, print more money. But that would be inflationary and further deflate the value of the HUF.. and in light of what the analysts hav said, I’m not sure it help.
COT
@Charlie, just got back from Paolo’s Pizzeria and I’m telling you, within 50km of where you’re at there is pizza as fine as you’ll find anywhere

enuff
Guest

Vick’s mentality remains in opposition mode, his knows only to provoke and pick a fight!
The man couldn’t even take care of his own turf, he has no right to “lecture” others!

Guest

@Paul “All religion is dangerous for the same reason-it tells us what to think, then it tells us what to do.” May I suggest that it is man’s messing with these traditions that give them a bad name? A man, searching for power and authority may well latch on the tenets of his religion and use them for that purpose. My own has plenty of these dangerous idiots.

Bowen
Guest

@ Joseph Simon: “Schmitt Pál is emerging as a steadying influence in the political life of Hungary.”
I’m afraid Schmitt’s time may be up soon. However, he has one important job left to do.
He will be appointing 129 judges, already chosen to replace those who have had to resign under new laws. He’s due to do this on April 1st, after which I suspect his steadying influence in the political life of Hungary will no longer be required.
Yes, April 1st.
Ironic, isn’t it!

Kirsten
Guest
Jano: “the commission is not just a beurocratic center anymore but bears considerable political influence and should be democratically elected by the citizens of the EU.” In Europe a government is also usually “elected” by the parliament and not by the citizens directly; the citizens elect the parliamentarians. Or have you selected your minister of finance etc.? The European Commission is approved by the European Parliament and that is elected by those people who care to vote. Many people do not. Turnout in Hungary in 2009 was 36 %. The European Commission still has to include one representative from each member state. So 27 Commissioners. Certainly a more efficient structure is conceivable but given the zeal e.g. of the Hungarian government it is very likely that Hungary will not accept being represented in the Commission only if it is able to supply a candidate that will convince the voters also in other countries and hence be “directly elected”. Instead I would expect OV to insist on sending there any of his buddies and – given the likely resistence from the European Parliament (“the left liberal terrorists”) – claim that they have no right to doubt the authority of Hungary to… Read more »
cheshire cat
Guest

According to NOL’s sources, Orban is getting irritated and is now fed up with the EU.
http://nol.hu/belfold/20120310-orban_viktor_ingerult
Also according to them, the “koceraj” attack was not part of a carefully planned communicational strategy, but an emotional outburst. He thinks he does everything the EU asks him to do, but they keep thinking of new problems.

Member

I have no problem with anyone’s religious or spiritual believes. I think both are private matters, just like sexuality. Of course in those circles of society where someone’s moral value is measured by that how is he performs as a “stallion”, meaning how many children he can produce, morality gets a strange twist. I am also not sure how the priests can even talk about making a child when they supposed to be celibate. It does not failed to puzzle me that how so may of these priests can be such experts on sexuality. I guess they are experts on the same way as they are experts about democracy.

Odin's Lost Eye
Guest
@Some 1 Thanks for your pointer to the archbish, one Dr Balazs Babel. Like most of that lot (and the Curia) they are Central Control folk at heart. The present top lad Ratzinger was. before he got that job the Prefect of the Congregation for the Doctrine of the Faith. This outfit used to be called the ‘Holy Inquisition’ (the thumb screw, the Steak and the Glory of the Lord mob). As I read it ‘Archbish’ Balazs Babel thals about canonizing the Victator. I began to wonder which cannon should be used for the job. As it would be very messy I cave up and realised it was another form of Canonization. “On newly made popes and saints as you know, It is a custom in Rome a new name to bestow, So they canonised OV with the name of Twitt Oh!” -with apologies to the ‘Jackdaw of Reims’ and the ‘Ingoldsby Legends’ @An do not become a Buddhist –a follower of the middle way who seeks to gain merit- Join the church I belong to. It is one where the Hymn books have handles and contain wondrous gold or brown liquids. The lessons are read from the thirstiest verse… Read more »
Jano
Guest

“The European Commission is approved by the European Parliament and that is elected by those people who care to vote.”
That sounds nice on paper, but please don’t pretend not knowing how the commission actually gets selected by a few strong member states. The parliament voting is a formality and it’s not even a campaign topic of what kind of commission the MP’s would support

Eva S. Balogh
Guest

Jano: “That sounds nice on paper, but please don’t pretend not knowing how the commission actually gets selected by a few strong member states.”
But the members of the commission are delegated by the member states and approved by their parliaments.

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