Politics and finances: Orbán’s Hungary today

Judging from the comments, most readers of Hungarian Spectrum consider Sándor Csányi’s spectacular exit from the ranks of shareholders of OTP an event that overshadows all other news, including whatever the current opposition is doing. Perhaps in the long run the panic that took hold of Budapest yesterday following the precipitous fall in the stock price of Hungary’s largest bank might prove to be more significant than any purely political event. However, what happened at OTP cannot be separated from politics.

By now we know that even before Csányi, the CEO of OTP, decided to sell his OTP stock worth about 26 million euros, some other high-level officials of the bank had already gotten rid of theirs. I assume they sold because of the probability that the government will “take care of the Forex loans one way or the other.” The exact way is still not entirely clear, but it is likely that the banks will again be the ones that will have to bear the financial burden of the “government assistance.” This rumor began to circulate about a week ago.

And then came Viktor Orbán’s interview with Margit Fehér of The Wall Street Journal. In this interview Orbán made it clear that the bank levies are here to stay. He has reneged on his initial promise that the very high extra taxes on banks would be needed for only a couple of years. Now the official position is that the bank levies will remain until the national debt is under 50% of GDP–perhaps in ten years “if the euro zone could do better.”

Another political decision that most likely had an impact on the misfortunes of OTP was the government’s abrupt announcement of the “nationalization” of 104 credit unions privately owned but functioning under the umbrella of TakarékBank Zrt. TakarékBank and its credit unions are really the banks of the countryside. They are present in 1,000 smaller towns and villages, which means that they cover about a third of all Hungarian communities. One can learn more about TakarékBank here. One thing is important to know. TakarékBank was run by and with the consent of the individual owners and board members. Clearly, the state wants to take over the whole organization and most likely run it as a state bank. What is happening here is no less than highway robbery. As some people said, the last time something like this happened in Hungary was during the Rákosi period. Sándor Demján, chairman of TakarékBank’s board, swears that they will keep fighting all the way to Strasbourg to prove that what the Hungarian government is doing amounts to nationalization without any monetary compensation.

If Orbán succeeds in the nationalization of TakarékBank, it might pose a serious threat to OTP. All in all, it’s no wonder that OTP officials didn’t think that their investment was safe. The alarm bell might sound in foreign banks as well (don’t forget that Orbán’s plans include a banking sector that is at least 50% Hungarian owned), and if that happens the whole banking sector might collapse. But I guess that would fit in with Orbán’s goal of tearing down all the carry-overs from the past and replacing them with his own original creations.

Let’s return now to the interview Orbán gave to The Wall Street Journal. Some of his statements are just a regurgitation of what he said in his rambling speech to the foreign ministry officials about a week ago but this time in even stronger language. For example: “The future of Europe is Central Europe” and by “now we are once again part of [this] powerhouse.” He also repeated some of his often used lines about the nonexistent strides Hungary has made since he took over: the national debt is falling, foreign trade is rocketing, Hungary no longer needs “other people’s money,” unemployment is falling, and finally that when he took office only 1.8 million people paid taxes but now that number is “close to 4 million.” No one has any idea where Orbán got his figures about the number of taxpayers, but they bear no resemblance to reality.

The interview is a rare self-portrait that could be the topic of another post, but here I would like to bring up two points.

This is the first time, at least to my knowledge, that Orbán openly declared that he really doesn’t want to join the eurozone. This despite the fact that Hungary is obligated to adopt the euro as the country’s currency since it was part of the conditions for membership in the European Union. But today Orbán thinks that Hungary “should exploit the advantages of not being in the eurozone.” I was already suspicious when he insisted that the Constitution should include a sentence stipulating that Hungary’s currency is the forint, but in the interview he was quite explicit on the subject: to change the constitution’s declaration that Hungary’s currency is the forint “will require a two-third vote of Parliament. So, to join the euro will require a strong, unified majority. This guarantees that it will not be a divisive issue. Whether Hungary joins will depend a lot on how well the new, integrated eurozone functions.”

www.lorettahelson.com

www.lorettahelson.com

And finally a point that might interest amateur psychologists. Orbán said: “When you have to save your country, to renew your country–that is when a job like this is appealing to someone like me. This is a real challenge, not just like reorganizing a bureaucracy. People like me, we like to do something significant, something extraordinary. History has provided me that chance. Actually, it provided it three times. I’ve always gotten historical challenges as a leader. When things are going well, I seem to lose the elections, because the people don’t need me anymore.” There is a Hungarian saying “A próféta szólna belőled!” meaning I hope your prophecy comes true. But all joking aside, it seems that Orbán is not confident about winning the next elections. He is afraid that all his extraordinary accomplishments will only make an opposition victory more likely. I guess the winning campaign slogan, contrary to everything we know about electorates, would be: “If you’re better off than you were four years ago, throw the bum out!”

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Ron
Guest

Eva: and finally that when he took office only 1.8 million people paid taxes but now that number is “close to 4 million.” No one has any idea where Orbán got his figures about the number of taxpayers, but they bear no resemblance to reality.

Absolutely, the number of tax payers in 2009 was about 3.65 million. And the number is decreasing since as is the population.

http://books.google.hu/books?id=MWpiGrpgE0IC&pg=PP9&lpg=PP9&dq=taxpayers+hungary+2009&source=bl&ots=RU0s5yCOxU&sig=uZ2KE6MirbvMqWP7-WfX-LLg3R4&hl=en&sa=X&ei=JQ7rUaDhNcXj4QSdu4HwAg&ved=0CGQQ6AEwCTgK

http://secularhungary.wordpress.com/2013/01/20/government-90-of-taxpayers-are-church-members/

Ron
Guest

Eva: But all joking aside, it seems that Orbán is not confident about winning the next elections. He is afraid that all his extraordinary accomplishments will only make an opposition victory more likely.

I am not always in agreement with VO, but in this case I am. Unfortunately, the opposition will have a majority, but not enough to make the necessary changes. The country will go down the drain, and VO by losing the election will actually win, as he and his henchmen constantly will try to sabotage any change.

Minusio
Guest
Calling from Budapest. The taxi driver who brought us from Ferihegy to the Swob hegy all across town complained bitterly about the rising costs and dropping income. He said soon all taxis who want to keep their licence (many are private but operate through some dispatcher, for example at the airport) will have to be painted yellow. This costs about 1100 dollars. I saw petrol prices at 490 forint. In 1993 it was about 160 forint and until 2010 it hovered mostly aroung 250 forint. I’ll report more as I observe more. As one can easily see, OTP is mostly in foreign hands, although some of the foreigners live in Hungary. Csányi’s and other board members’ stakes were minimal. Although Orbán has a tortured relationship with reality and is rather uneducated he is not mentally ill. He probably just over-compensated his inferiority complex to the degree of megalomania. And he is, as the French would say “mythomane”, i.e. a compulsive liar. I fail to see, though, why Orbán should be afraid of not winning the next election (if there is any). The majority dislikes him, but they still see no alternative (so they’ll stay home), and the vast majority does… Read more »
Minusio
Guest

Another interesting thing about OTP: Its shares took quite a dip towards the end of June. But miraculously it went up to one of the highest points in recent history – and that was when Csány sold.

cheshire cat
Guest

“When things are going well, I seem to lose the elections, because the people don’t need me anymore.”

Great. Does Orban realize that it’s sentences like this that prove how little he knows / cares about democracy?

I lose elections, I, not the party or something…, and in a real democracy, party leaders don’t lose electionS. They lose one, and then they stop being the party leader.

Let’s not even think about the absurdity of what he means here – if I was a Hungarian, living and voting in Hungary, I would be offended. Like Hungarians are so stupid they go: “Oh, he is so wonderful, he has saved the country again, let’s vote for someone real bad who can mess us up again”. 😀

Member

“When things are going well, I seem to lose the elections, because the people don’t need me anymore.”

Right. This is why people get rid of dictators …

Herr Hitler! We loved what you did with Europe! Now “raus” …
Comrade Stalin! Those awesome gulag camps! Loveee … Now please die!
Ave Nero! We loved the fireworks and the fiddling … but please commit suicide!
Mr Ceausescu! We loved the stadiums … now “say hello to my little friend” (Pacino).

Mr Orban! …

Member

There is a very interesting article on NOL about the Orban family’s finances around Felcsut.
It is around the soccer stadium Orban is building. Orban, his wife and his father have been purchasing and leasing large agricultural areas that will likely be turned into parking areas, as well as other real estates. THe shopping spree started long before the official project itself. THe head of the Dunaszovetkezet credit union (the only credit union in the country that will not be nationalized) have been provided large financing to the project since at least 2007.
http://nol.hu/belfold/20130720-csaladi_focibiznisz

J Grant
Guest

Minusio :
Although Orbán has a tortured relationship with reality and is rather uneducated he is not mentally ill. He probably just over-compensated his inferiority complex to the degree of megalomania. And he is, as the French would say “mythomane”, i.e. a compulsive liar.

I am amazed that you think that a megalomaniac is not mentally ill. But apart from your or my definition of mental illness, if somebody who said in interview the same garbage as Orban did in The Wall Street Journal is sane then God save us! As an amateur psychologist I agree with Prof. Balogh’s suggestion that he is afraid of losing the next election. Moreover, I believe that his increasingly insane pronouncements are also connected to his increased stress over the next 6-8 months. That should give us hope!

petofi
Guest

Hungary is a blueprint for destabilization, and is a means of kicking out a block from the wall of EU…

JonB
Guest

How about a conspiracy theory. This run on OTP could have been planned so that the government can step in and save it.

Luigi14
Guest
Ron: you completely misunderstand it. Orbán is managing expectations within his ranks. He mentioned it countless times already -of course always in a half-joking manner (at least many people thought he was joking and he was, in a way) – that they might not win again, that we have to prepare for a loss etc. So if he loses, he is on record, he can point to his repeated warnings to. But in reality top politicians at the moment are very confident that they will win and a loss would be a huge disappointment for them. It’s not like with MSZP which knew it positively that they will lose and lose very badly. There is no such feeling at all at Fidesz at present. Although, and he would be right, Orbán can sell it as a good thing: let the lefty coalition self destruct, and so Fidesz comes back in two years and they will control everything anyway given their entrenched pals at the media, courts, prosecution, media authority, national bank etc. At least they can have a couple of months of holiday.But Orbán will remain at Fidesz until he lives. For Orbán it’s a win-win.
Luigi14
Guest
Orbán had a strong point in one of his recent interviews (perhaps in the WSJ) along the lines that under MSZP people did not feel that they were protected, cared about. It’s the left’s problem, they are too aloof and too intellectual, removed from ordinary people. Orbán works always for the people as against banks/EU etc,. That is his strong image. He knows instinctively that votes come only from people and not from banks or Viviane Reading. And his image has been that he takes aways from big bad corporations, goes against the EU to “protect the rights of hungarians”, etc. Try to understand that voters don’t get long term consequences, ie. that eventually they have to pay for this sectoral special taxes, that investment decreases and that is bad, and other sophisticated ideas. They understand only what is now: is it better now that natural gas is cheaper? They feel that the leader (Orbán) is working for them and does not care about intellectual issues like the constitutions (as the majority cannot even define the term). All politicians are corrupt, but do I want a politician who repeatedly proved that he only cares about the people (goes against strong… Read more »
Minusio
Guest

Éva, cheshire cat, Mutt: “When things are going well, I seem to lose the elections, because the people don’t need me anymore.”

It is true, most people have forgotten how the first Orbán government ended. It was in shame, among scandals, corruption, empty state coffers, illegal contracts signed after the lost elections in 2002 – and higher debt.

What best shows that Fidesz is really a party in Orbán’s possession is the fact that he was not sent packing after he had also lost the second election in 2006. (Actually he lost three elections. The first time was in 1994, when he was still a liberal…)

B. Weidung
Guest
Tarlós is a goner. There is absolutely no way Fidesz/Tarlós are reelected at the municipality level in Budapest — of course provided there will be a mayor position at all for Budapest who is elected directly (because Fidesz is thinking about elimintaing the position and leave only some gerrymenderaed local municipalities within Budapest who may elect the mayor or a similar, but formal position indirectly). Tarlós’s achievements so far: (A) cutting the trees at Római Fürdő (his home constituency, where he promised to his construction business pals that he will arrange for the building of barriers against the Danube, even though the houses were built illegally or at least against the zoning rules), (B) introducig the yellow cabs (and raising the prices very substantially), (C) nationalizing Margit sziget from district XIII., the only remaining MSZP-lead district (where he intends to build a lot of stuff, which is always the old story: build, even if unnecessary, but you can steal only from big projects). Not a very long list. He is hated uniformly in Budapest. But again, whatever happens in Budapest has no relevance whatsoever nationally, as the national elections are geared/gerrymendeared towards the rural, outside of Budapest disctricts, many of… Read more »
Marcel Dé (@MarcelD10)
Guest

@Luigi14

For somebody who “does not care about intellectual issues like the constitutions” (your words), he certainly spent a lot of time changing it, didn’t he?

Member
I do not think that many can drivers would vote for Fidesz again (that was their popular choice for the previous election. I am not sure if Fidesz will be able to win back most of the teachers (but then again if you recall the footage about the Rozsa Hoffman affair at the Education Conference where some of our “teachers” behaved like bullies….. http://index.hu/video/2013/01/18/educatio/ ) Many teachers outside of Budapest are favour the Jobbik by now Questionable who won over the farmers, and the small enterprise/venture holders (trafikmutyi) I think nurses and doctors would not vote for Fidesz either. What I try to say that although I do believe that Fidesz shed from its fan club, I am not sure if it is the gain for the Jobbik or for the united left. SLightly OT: Mate Kocsis the infamous major of the Eight District became unhinged. Mate found himself in media frenzy, when his communication team (or himself) picked up the gloves on Facebook for some comments, and replied kind of Fidesz style, known from the pages of Magyar Hirlap. Now, his Facebook page makes an interesting read, as what you will find that his (paid?) supporters are few, and… Read more »
Member

B. Weidung :
Tarlós is a goner. There is absolutely no way Fidesz/Tarlós are reelected at the municipality level in Budapest — of course provided there will be a mayor position at all for Budapest who is elected directly (because Fidesz is thinking about elimintaing the position and leave only some gerrymenderaed local municipalities within Budapest who may elect the mayor or a similar, but formal position indirectly).

Can you expend on that? I have not heard about this yet.

Luigi15
Guest
Marcel: And the people, as we see from polls, are exteremly, terribly concerned about it, right? (I was at the demonstrations about the 4th amendments, with about 5-6k people, and these were the first real demonstrations about the constitutionat all). Orbán, a lawyer and power-obsessed person was obviously doing first things first: entrenching himself (as well as, like a good lawyer, having fun with toying with a legal instrument). But he chose wisely: people don’t give a damn about it. They care about electricty prices, fighting with banks (your monthly payments get smaller), fighting with “enemies hell-bent on destroying Hungary” etc. Like it was mentioned here, people cannot even tell what a constitution is, how is it different from a normal law (statute), what is its importance etc. The polls clearly show one thing: that in the last six months there was one single issue which had any measurable effect on party popularity. Only one. It was the rezsi-csökkentés (the idea of utility rate dcerease). Real or not, the masses loved it , got them excited and rewarded Fidesz for it. No other scandal, news, development (not even the trafik-mutyi, which by the way did not get to millions of… Read more »
tappanch
Guest

Breaking news from Orban’s mouthpiece, M. Nemzet:

Banker Csanyi is about to retire!

http://mno.hu/belfold/csanyi-sandor-visszavonul-1173911

Luigi15
Guest

Tappanch: I am not sure Csányi would break this news via MN.

And he may be diplomatic enough not to comment, especially as this might be a political message for him to actually retire if he did not plan on it until today.

In any case, if true, it’s a good justiifcation at least PR-wise.against the insider dealing/profiteering media charges.

But I guess, the end of the story has not been written yet.

Garbovits
Guest

Uj Péter (editor in chief of 444.hu, formerly of Index)’s view of the Magyar Nemzet news piece about Csányi’s health issues and retirement:

“Mondjuk azon se lepődnék meg, ha holnap azt hoznák, hogy Fekete-tenger melletti dácsájában menekülés közben önként tarkón lőtte magát”.

“I would not be surprized if Magyar Namzet wrote that Csányi shot the back of his own neck while fleeing from his dacha at the Black Sea”.

Member
Eva S. Balogh : Since they don’t listen to anyone and just go on their merry way they might actually lose the elections. I wish you were correct. However, I cannot agree. I think Fidesz will not only win the 2014 elections, but keep their 2/3 majority. First reason: 10 months is an eternity in politics. Orban and his gang of simlis will be able to enact plenty more populist moves, such as further utility-price cuts. They will relentlessly attack Bajnai, trotting out everything from the Goose Thief libel to lies about azelmultnyolcev. Bajnai and the MSZP have already proven themselves inept at handling such attacks. Second reason: No kampanycsend. Fidesz’s grassroots organization is full of cash and energy; the MSZP’s grassroots support is dwindling, and E14/DK has no nationwide organization. Fidesz will run a US-style get-out-the-vote campaign, while the Democratic Opposition sits around twiddling their thumbs and complaining about how unfair everything is. Third reason: The realities of the new voting system. In order to unseat Fidesz, the Democratic Opposition will have to win a large number of individual constituencies. At present, they are not strong enough to accomplish this feat. The Democratic Opposition can probably win three seats… Read more »
Marcel Dé (@MarcelD10)
Guest

Luigi15 :
Marcel: And the people, as we see from polls, are exteremly, terribly concerned about it, right?

Of course not. Yet at some point every incumbent running for reelection has to face his own record. If the reduced energy bills is the only thing to show for four years in power, good luck with that.

Kiiiiiur
Guest

Seal Driver:

while many of your points are indeed relevant, the situation is somewhat better.

For a start, most Budapest constituencies can be flipped compared to 2010, if the left gets united. (although it is really the very minimal start).

Many constituencies are impossible to flip, such as Hódmezóvásárhely, Balatonfüred, many in Zala county etc. But the situation is not lost at all outside those areas.

The number of voters can increase until 2014 and most of the undecided (or those not reavealing their preferences) are opposition leaning and can decide the majority. Its not that Fidesz popularity will decrease, but with increasing the opposition leaning voters, their percentage will decrease and can get below 50%, even perhaps as low as 40%.

That said, without 2/3s a new government cannot govern and remain stable — but that is very unlikely, because of the garrymandeared die-hard, extremely consistently right wing rural constituencies.

petofi
Guest

HOW LONG ORBAN WILL STAY

Orban will stay until the country is bankrupt and then he will decamp immediately, probably to southern France or a suburb of London.

XM
Guest
Orbán’s interviews and performances abroad address only the home constituency. Magyar Nemzet and similar venues [government troll Ferenc Kumin: “It’s a fascinating interview” — better would be if Orbán had said “I gave a fascinating interview”] can find the right quotes and the public can be reassured that the PM puts any foreign meddlers into their place. The interview contains also some interesting views on democracy and God and Asians [at least not “Orientals”]: “Ideologically speaking, democracy as we know it is based on two cultural foundations: the first is that God created us in his own likeness and the second is that to destroy it is therefore a sin. Asians don’t have that but they have a different kind of foundation. ” (It is a good question what the “it” refers to in that shouldn’t be sinfully destroyed: God, democracy, or our likeness of God.) Same sort of crap ideas are shared by the Parliament, see the preamble of the constitution or this quote from the law that introduced the Day of National Togetherness, remembering Trianon: “We [the MPs] who believe that God is the Master of history and those who strive to understand the course of history from… Read more »
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