Another “mad” speech by Viktor Orbán

Just this morning Péter Róna, an economist who spent most of his life in the United States and Great Britain, said in an interview that he had given up trying to make sense of the Orbán government’s so-called economic policy. A few days earlier Ádám Gere, an American-trained economist and a follower of Friedrich Hayek’s economic philosophy, refused even to consider “whatever this gang is doing in economic policy.” When the reporter inquired whether Gere meant the government when he was talking about this bunch [társaság], Gere answered that it doesn’t deserve to be called a government and expressed his opinion that the “whole bunch” is actually a collection of communists. What he meant was that the leading Fidesz party members in their thinking are still followers of the state socialism in which they grew up.

Gere is not a diplomatic man. He doesn’t pussyfoot around. He calls it as he sees it. And twenty-four hours after this interview Viktor Orbán offered a perfect demonstration of what Gere had in mind.

The prime minister, claiming that his batteries needed recharging, spent two weeks relaxing. There was a faint hope that perhaps he would return a little wiser. Well, that’s not the case. He made another speech lasting an hour and a half containing announcements that were described by Privátbankár, an Internet financial paper, as “shocking.”

The speech was delivered in the inner courtyard of the Jurisics fortress in Kőszeg, very close to the Austrian border. The occasion was a festival called Tranzit–Festival on the Border. According to reports, an audience of 1,000 filled the whole courtyard. Among the shocking announcements let me mention first that Orbán finds “the direction of current economic policy the only possible one.” Moreover, this policy is so successful that “its revision is unnecessary.” What is needed is “more perseverance.” The policy will also include a further reduction of the income and corporate taxes.

The heat is not the only problem

When asked about the “economic war of independence,” Orbán explained that this strategy became necessary because of the high sovereign debt load and that “this war must continue.” Victory, as far as Orbán is concerned, is guaranteed against the European Union because Fidesz-KDNP has a two-thirds majority in parliament and “that two-thirds stands steady [áll mint a cövek], and even if there were some kind of problem the fifty percent is guaranteed.”

The two-thirds majority was also used to repurchase important companies. “We bought MOL shares from the Russians, some of the water companies from the French, Rába from the Malaysians, Ferencváros [football club] from the English, and momentarily we will buy E.ON from the Germans.” He quickly added that naturally Hungary doesn’t have only conflicts but also has allies.

As for higher education, Viktor Orbán seems to be convinced that his reforms will make Hungarian higher education the most competitive in Europe. He repeated the incredible idea that the entire cost of the country’s higher education must be borne solely by the students. They would be able to receive student loans that could be paid back over a period as long as thirty years at an interest rate of 1 or 2%.

He repeated his resolve to introduce pre-registration before actual voting. “The system must be changed … There are counterarguments and there will be an uproar [balhé], we will be attacked … We must stand and defend our point of view.”

I don’t think I have to spend much time on the claim that the government’s economic policy needs no revision. This time it was András Schiffer (LMP) who announced that the extreme heat must have affected the prime minister’s senses. While most analysts view the Orbán government’s introduction of the flat tax as its original economic sin, Orbán plans to compound that sin, further lowering taxes for both individuals and business. It sounds crazy.

One also wonders what Orbán had in mind when he announced that victory against the European Union is assured by his government’s two-thirds majority in parliament. On the face of it, the two have nothing to do with each other.

As for the government purchase of the MOL shares from the Russians, if I were in his place I would keep my mouth shut on the subject. If I recall properly, the Hungarian government bought the stock at 23,500 forints; it is currently trading at 16,15o. For a 21.2% stake the Hungarian government paid 1.88 billion euros or about 500 billion forints; if they were to try to unload their stake today, they would have lost about a third of their investment. The Russians, by contrast, who bought the stake in 2009, had a 40% return on their investment.

As for the repurchase of the E.ON gas and electricity company, the Financial Times Deutschland called the idea “madness” and added that it seems that “gulyás communism” is returning to Hungary. The high price of energy will not be solved by nationalizing the utility companies. They can offer cheaper prices only by receiving state aid paid by the same taxpayers who are getting cheaper gas and electricity. That is economic madness, said the paper. Moreover, with yet another nationalization Orbán is playing a dangerous game because foreign investors are already leery about Orbán’s Hungary. Just lately, the Coca Cola Company decided in the last minute not to open a new factory in Hungary. Instead they will be investing in Romania.

And boasting about buying Ferencváros, a football club, is truly ridiculous. It has been a losing proposition for years. Never mind, the government just decided to spend 20 billion forints building the club a new stadium.

What Orbán practically single-handedly is doing to Hungarian higher education is a crime. The brightest and most enterprising students are leaving the country to study in western European countries where they will most likely pay less for a better education than they could receive at home. Some talented students will never even get to college because of the extremely high tuition fees. Orbán, who received a free education and most likely even got a stipend, suddenly thinks that scholarships are unnecessary.

As for voter registration, we will hear endlessly that after all this is how it is in the United States. But in the United States there is no ready-made election list as there is in Hungary. Registration in Hungary’s case serves only one purpose: to limit the number of voters and filter out those who are not likely to vote for Fidesz.

And finally a few more gems from the speech. When talking about voter registration he announced that Hungary had become a “world nation” (világnemzet). “The socialists [szocik] are behind. They are still in Hungary squeezed between borders. Hungary has expanded like tripe beyond the pot.”  The reaction to this kind of nonsense was predictable. Nándor Gúr (MSZP) said that Hungary hasn’t expanded anywhere, especially not from a pot. Hungary is not a dynamic country, but rather is lagging behind. András Schiffer (LMP) couldn’t make heads nor tails of some of the prime minister’s announcements. He couldn’t figure out what the pot and the tripe had to do with voter registration. Neither can I, but then I doubt that even Viktor Orbán knows anymore what he is talking about.

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Guest
August 27, 2012 4:07 pm

He’s looking a bit porky too. I can’t imagine him running too far on a football pitch in that condition.

Guest
Minusio
August 27, 2012 4:08 pm

Basically, Orbán confirmed what we knew all along: Hungary is his, he cannot be unseated and he can do as he pleases.

Guest
August 27, 2012 4:14 pm

What? madder!
When I saw this on my facebook feed a min. ago, I thought you re-post the earlier article.

Should I read it before going to sleep and get all worked up?

Guest
August 27, 2012 4:40 pm

A little OT, but not really, as it might help explain how the Fidesz supporters hear what Orbán says. My brother-in-law, once a ‘young democrat’, supporting the exciting new party that was going to change Hungary for the better, has ‘grown up’ with Fidesz. He is now a prosperous member of the middle class – two cars, dacha in Balaton, building himself a mansion – and he’s now firmly on the nationalistic right with OV. Not only does he lap up the nonsense OV comes out with, he spouts much the same thing himself. To him, the main issue, perhaps the only issue, has become how Hungarian someone is. He constantly make the most bizarre comments about nationalist issues, and his pro-Hungary/anti-everyone else stance is becoming increasingly disconnected from any form of reality. And for anyone who thinks I’m exaggerating, a recent rant against foreigners, ended with the English in particular getting it in the neck and climaxed with him blaming us for the unexploded WWII bomb that has recently caused so much disruption to train services between Debrecen and Budapest! “What have the English ever done?” He asked, in mid rant, “they’ve done nothing but cause damage and misery… Read more »

Guest
Kirsten
August 27, 2012 4:55 pm

Minusio :
Basically, Orbán confirmed what we knew all along: Hungary is his, he cannot be unseated and he can do as he pleases.

I know that we differ on that one. He has already complained that unfortunately (because of the EU) he cannot abandon “democracy” completely. So there are some obstacles – apparent even to OV – to his personal rule. Change currently will not be the result of the opposition’s efforts. But I guess that this lunatic will face increasing opposition from people within Fidesz. OV is simply not fit for his job in this shape, he appears to have gone berserk. Whether his successors from Fidesz’ ranks will really improve matters politically, I am not sure but it is difficult to imagine that these ridiculous measures can be sustained for long.

Guest
Minusio
August 27, 2012 5:08 pm

One or the other of my Hungarian friends (mostly expats) also think that opposition to Orbán might/will arise from within the ranks of Fidész. I highly doubt it. Fidész is built around Orbán. Everybody owes him some, and he made sure that he has no real rivals in his party.

If he goes or is run over by a truck, we might see some wars of the diadochi. But I doubt even that. We will have to wait for the masses in the streets, from all over the country to demand his resignation. But everyone seems to agree that this is far from being likely within the next decade.

Guest
tappanch
August 27, 2012 5:13 pm

Correction
The Orban government paid 22,400 HUF/share for Mol’s 21.1%, not 23,500.
See http://www.nepszava.hu/articles/article.php?id=448085

Member
Some1
August 27, 2012 5:22 pm

Paul, WHat does your brother-in-law thinks about your daughter, his niece?

I have some visitors in Budapest from the USA at this time. A young couple with a small child were touring Europe, and this is the last leg of their trip. After spending a few days in the city, they told my parents that they are very surprised about the lack of youngsters in the city. Apparently they haven’t seen so few kids all around Europe as in Budapest. Something for Orban to pounder maybe.

Guest
Not buying it
August 27, 2012 5:32 pm

“The socialists [szocik] are behind. They are still in Hungary squeezed between borders. Hungary has expanded like tripe beyond the pot.” It’s quite clear that what he means is that his moves to allow ethnic Hungarians from outside Hungary to vote in the election, even though their votes will have little or no impact on their finances, while impacting more heavily on those of us who live here. In his mind, Hungary now has a substantial number of citizens all over the world, so it has become a “world nation”. This is an interesting claim, since I’ve known many Hungarian nationals who have lived in virtually every continent on the globe, as well as those who were descended from Hungarian nationals. How giving more of them the vote suddenly makes Hungary a “world nation” is beyond me. I imagine that the vast majority of the new non-resident citizens live within 500 kilometers of the Hungarian border, so the most he should be able to boast about is that his policy makes Hungary a “Eastern European nation”. This thinking is about the same as his assertion that nationalizing pensions suddenly made Hungary much less indebted. That is only true in an… Read more »

Guest
August 27, 2012 5:45 pm

London Calling!

(Not so) O/T

Well Orban is committed to free and fair elections (?????).

Hungary is sending ‘observers’ to the Ukraine (honest!).

To keep an eye on Viktor Yanukovych!

Perhaps he will be collecting ‘techniques’ on ‘democracy’ and ‘civil liberties’!!

Oh – and in passing he liked the ‘high-level’ of the European Football Championships.

…..birds of a feather…flock……..

http://en.for-ua.com/news/2012/08/27/151527.html

Regards

Charlie

Guest
GW
August 27, 2012 5:51 pm

What is the worst possible way for a prospective share buyer to position him or herself before buying shares? Advertise the fact that you want to buy them. Who has just done this for E.ON shares? Either OV is incredibly incompetent and doesn’t understand how markets work or he does understand how markets work and, for some unfathomable reason, is determined to do his country the greatest possible damage.

Guest
Bowen
August 27, 2012 5:52 pm

Paul :A little OT, but not really, as it might help explain how the Fidesz supporters hear what Orbán says.
And for anyone who thinks I’m exaggerating, a recent rant against foreigners, ended with the English in particular getting it in the neck and climaxed with him blaming us for the unexploded WWII bomb that has recently caused so much disruption to train services between Debrecen and Budapest!

Sorry, Paul, but your brother-in-law doesn’t sound like someone who’s particularly at-ease and self-assured in life.

Guest
petofi
August 27, 2012 6:12 pm

GW :
What is the worst possible way for a prospective share buyer to position him or herself before buying shares? Advertise the fact that you want to buy them. Who has just done this for E.ON shares? Either OV is incredibly incompetent and doesn’t understand how markets work or he does understand how markets work and, for some unfathomable reason, is determined to do his country the greatest possible damage.

“..greatest possible damage..”–I’ve said this all along.
Still a mystery remains as to WHY?
An angry Felcsutian getting back at the ‘whites’?
A Russian puppet being used to withdraw Hungary
from the EU and thereby help fragment that organization?

Stuff to ponder…

Guest
August 27, 2012 6:15 pm

London Calling!

GW: I think you’ll find that he is exercising an option – already defined in contract – which runs out soon.

Regards

Charlie

Guest
August 27, 2012 6:20 pm

…and I forgot to mention:

The EU is forcing EON to sell….

Guest
tappanch
August 27, 2012 6:58 pm

Eva S. Balogh :

tappanch :
Correction
The Orban government paid 22,400 HUF/share for Mol’s 21.1%, not 23,500.
See http://www.nepszava.hu/articles/article.php?id=448085

Obviously, I remembered wrong. But the loss is still considerable especially since it was paid with borrowed money.

Here is a more precise report about the purchase price:
22 467 HUF/share * 22 179 488 shares = 498,306,556,896 HUF

On May 24, 2011 EUR/HUF was between 268.75 and 271.12, closing at 269.46,
but the report calculates with 265 EUR/HUF, resulting in a 1,880,402,101 euro expense.

Source dated April 6, 2012:
http://www.napi.hu/tozsdek-piacok/ennyit_fizetett_az_allam_a_molert.515732.html

Current (08-27-2012) value of Orban’s gambling on the stock market is
16,150* 22,179,488 = 358,198,731,200, i.e. the unrealized loss is about
140 billion HUF.

The whole thing is tragicomic, since Orban’s main argument to nationalize the private retirement funds had been that the funds were partially invested in the stock market, which Orban called gambling.

This maddening contradiction is not unique: Orban blamed the previous government to allow people to run up mortgage debt in Hungary. Now he forces students to take out student loans by eliminating tuition-free education at universities, and he praises himself for creating this indebtedness!

Guest
LwiiH
August 27, 2012 7:23 pm

Paul :
He’s looking a bit porky too. I can’t imagine him running too far on a football pitch in that condition.

I ran into OV a few years ago. He was standing on the front stairs of an office building waiting for his car to come round and I was heading in for other reasons. I must say he looked a lot better then.. and much more relaxed… Looks like being PM taken a toll on OV!

Guest
An
August 27, 2012 7:48 pm

Wonderful. Orban is evolving. Just wonder, how crazy he should get before people realize he has serious issues? Right now, his craziness seem to be contagious in his fan base (people like Paul’s brother-in-law)… it’s like an epidemic.

Guest
Madison
August 27, 2012 7:54 pm

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Hungary set to buy out E.ON’s gas distribution business

Tim Gosling in Prague
August 27, 2012

http://www.bne.eu/storyf3938/Hungary_set_to_buy_out_EONs_gas_distribution_business

Guest
Minusio
August 27, 2012 8:15 pm

Madison, this contribution looks to me like a lot of clutter and white noise.

Anyway, why is everybody going off on a tangent again? This post was not mainly about taking over E.on’s share (who still would have to agree).

Guest
An
August 27, 2012 8:06 pm

GW :
What is the worst possible way for a prospective share buyer to position him or herself before buying shares? Advertise the fact that you want to buy them. Who has just done this for E.ON shares? Either OV is incredibly incompetent and doesn’t understand how markets work or he does understand how markets work and, for some unfathomable reason, is determined to do his country the greatest possible damage.

Don’t forget, that we are talking about the government here… which means that OV can change regulations and laws and make E.ON’s life hell in Hungary, and force them to sell.

Guest
contra-hunga
August 27, 2012 8:52 pm

is this the worst period in human history?
can millions of idiots populate a small spot in the universe?
can a few maniacs oppress millions of idiots?
who can explain it?

Member
August 27, 2012 9:55 pm

The idea of behind the purchase of the E.On is to transform public utilities into non-profit businesses. Which will be a nightmare of course … Because no sane investor would want to invest into non-profit businesses. Without capital the state will have to provide the funds for infrastructure development, but from where?

Tripe in the pot, he? Bad pot trip instead.

Guest
petofi
August 28, 2012 12:27 am

contra-hunga :
is this the worst period in human history?
can millions of idiots populate a small spot in the universe?
can a few maniacs oppress millions of idiots?
who can explain it?

Well, we’re definitely in the ‘dip’ of the cycle: new music is horrendous; my wife and I haven’t found a decent movie to
go to in months; a ruined painting in Spain is the object of
veneration…garda, jobbik, matolcsy, giro…yes, I’d say
the idiots are running amok.

Guest
LwiiH
August 28, 2012 1:27 am

Paul :
A little OT, but not really, as it might help explain how the Fidesz supporters hear what Orbán says.
At one point he even invoked Széchenyi as one of the great Hungarian anti-English heroes!
Orbán can talk what rubbish he likes to his supporters and they’ll believe it.

Széchenyi is one of my hero’s. He did a lot to improve the country by engaging public works that lifted the population. Hungary is still benefiting from some of the things that Széchenyi was able to get done before the ruling class drove him to suicide! I don’t see anyone doing any of this these days.

Guest
Turkmenbasi
August 28, 2012 2:47 am

This case about E.On again proves that Orbán has become a mere spokesman for Simicska. The fact is that Simicska would like to control the whole economy. In this nasty show Orbán’s task has become to discourage foreign investors to stay in Hungary so that Simicska can purchase everything at knock-down prices. From the point of view of an organised criminal, this is all very much rational.

All the rest can go to hell.

Guest

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petofi
August 28, 2012 7:41 am

Eva S. Balogh :
Tappanch: “Orban blamed the previous government to allow people to run up mortgage debt in Hungary. Now he forces students to take out student loans by eliminating tuition-free education at universities, and he praises himself for creating this indebtedness!”
I also wonder how much this student-loan idea will cost the taxpayer. One or two percent interest rate on loans? To be paid back in twenty or thirty years? How is that possible?

And of course when all this comes tumbling, Orban will reassure the minions that it was
the damn, foreign bankers (read “jews”) who’ve done it to Hungary AGAIN!

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