Tag Archives: Croatia

Silence in Hungary since the mini-summit

The silence in the Hungarian media about the Leaders’ Meeting in Brussels has been deafening.  After searching for well over an hour, I managed to find two op/eds and a couple of interviews with former diplomats. Both op/ed pieces, in my opinion, misinterpret both the significance of the meeting and the role of Viktor Orbán.

If you were to ask even the most diligent follower of the Hungarian media, I’d bet he/she would be hard pressed to tell you what actually happened at the mini-summit. The only thing he/she would know is that Viktor Orbán was there only as an observer. The op/ed in Népszabadság is full of ambivalent sentences like: “Officials in Budapest talk contemptuously about the results of the meeting while part of the German press seems to discover the basis of a common migrant policy in the 17-point action package.” Keep in mind that the media hasn’t given the Hungarian public any details of what is in this package. Viktor Orbán’s role is barely touched: “Orbán nodded [to the proposals] but didn’t take part in the debate.” The headline uses even stronger language: “Orbán got out, Merkel in trouble, Tsipras attacks.” The discrepancy between Orbán’s rhetoric and his obediently signing the document is ignored. György Sebes of Népszava in an opinion piece titled ” Viktor–Victory” is convinced that the Hungarian prime minister won this latest battle as he wins them all. He managed to gain popularity at home by successfully diverting attention from the serious domestic problems to the migrant crisis. And now he has saved the country from participating in the solution to the migrant crisis.

As far as the Hungarian media is concerned, there was a meeting of eleven prime ministers and they signed something, but nothing has really changed. Indeed, the greatest news seems to be that someone discovered the youthful Viktor Orbán spinning the wheel of fortune on TV2 in 2001. The only substantive news item came this afternoon from the new pro-government Magyar Idők, which reported that the government named Tibor Lakatos, a police colonel who works in the ministry of interior, to be Hungary’s coordinator. Mind you, the paper learned about this appointment only from the website of European Commission. The government didn’t consider it necessary to inform the Hungarian public of Lakatos’s new role.

Tibor Lakatos, who until fairly recently was deputy police captain of Vas County, will be an odd addition to the list of coordinators who, by and large, currently occupy high positions in their governments. All seem to have diplomatic experience. The European Commission is represented by the diplomatic adviser to Juncker’s cabinet. Albania is sending the prime minister’s adviser on security matters. There are a number of undersecretaries and several so-called sherpas or personal representatives of a government whose job is to prepare international summits. It is hard to tell whether Lakatos’s appointment is supposed to be a snub to Juncker and the Commission or just an example of the Hungarian’s government ineptitude when it comes to diplomacy. I just hope that this police colonel can speak English.

At the mini-summit, in the words of the European Commission, “the leaders … committed … to increasing the capacity to provide temporary shelter, rest, food, health, water and sanitation to all in need, triggering the EU Civil Protection Mechanism where necessary.” Yesterday Croatia activated the protection mechanism, which means financial support from the European Union. (For more information about the EU Civil Protection Mechanism there’s a detailed description of it on the European Commission’s website.) In the past, 55% of the cost of the necessary steps was covered by the European Union, but as of yesterday the decision was made to raise the level of support to 85%. In addition to Croatia, Serbia and Slovenia have also activated the mechanism for material support for such items as tents, blankets, sanitary equipment, and other essentials to help refugees this winter. Yesterday the Commission also awarded €5.9 million in emergency assistance to Greece from the Asylum, Migration and Integration Fund. None of the above was reported by the Hungarian media.

In vain was I searching for any statement by Viktor Orbán, but Foreign Minister Péter Szijjártó had a busy day. He gave interviews to Kossuth Rádió as well as to MTV’s M1 news channel. In the latter interview he complained about certain prime ministers in the European Union who are not paying the slightest attention to the rules and regulations of the Union. Their governments aren’t registering the refugees and aren’t providing for them but are simply moving them across the border to the neighboring country as soon as possible. Szijjártó seems to have forgotten about the tens of thousands of asylum seekers who were moved from the Croatian border straight to Hegyeshalom on the Austro-Hungarian border.

borders of greece

These are the borders Viktor Orbán wants to defend

According to him, the European Union has an easy task: “they should adopt the Hungarian model with lightning speed in Greece; in plain language they must defend the external borders of Greece.” On Kossuth Rádió he revealed that today he will travel to Lebanon and during the week he will be talking with his Cypriot and Greek colleagues about “the possibility of Greece accepting the assistance of the 28 Union countries in the defense of Greece’s borders.” So, Hungary is now trying on its own to negotiate with Greece concerning the country’s border defense. We will see what comes of this meeting–if, that is, the Hungarian media finds out anything about it. I don’t predict a roaring Hungarian success in Athens.

Viktor Orbán in Brussels: Success or failure?

There is huge confusion in the Hungarian media over Viktor Orbán’s success or lack thereof at the EU summit yesterday.

The Hungarian prime minister arrived in Brussels with a plan which, in his opinion, could have solved the unchecked influx of refugees coming mainly from Turkey and entering the European Union via Greece. He made sure that the world knew about the details of his plan, which he revealed while visiting Bavaria’s ultra-conservative prime minister, Horst Seehofer, ahead of the summit.

Orbán tried to portray the summit as a gathering of the leaders of the EU member states to discuss his proposals. After the marathon meeting ended, he triumphantly announced that, with the exception of his idea of a pan-European defense of Greece’s borders, all his proposals had received a favorable reception.

Yes, the idea of a common defense of Greece’s borders was vetoed, but that was not the only one that received a less than sympathetic reception. Orbán’s suggestion to set up “hot spots” outside of the EU borders also fell on deaf ears: there will be hot spots in Greece and Italy.

We heard nothing about the reaction to Orbán’s suggestion for “special partnership arrangements” with Turkey and Russia. I’m not sure what kind of a special partnership Orbán had in mind, but at the moment Turkey is alarmed over the Russian military buildup in Syria and I doubt that the European Union would want to get involved in that quagmire.

Orbán also demanded an official EU list of “safe” countries since the question of whether Serbia is a safe country in terms of being able to handle the registration and maintenance of large numbers of refugees is not immaterial from the Hungarian point of view. It is, of course, possible that such a list is in the works, but for the time being no decision has been made. As things stand, Serbia, as far as the EU is concerned, is not a safe country.

Finally, Orbán demanded worldwide quotas, which was also discarded by the representatives of the member states. For a man who furiously rejects quotas for his own country to suggest quotas for extra-EU countries is quite something. In fact, no quotas are necessary because countries are already offering to take in refugees. The United States has said it will take 25,000 Syrians. Canada has a commitment to resettle 10,000 Syrians by September 2016. This is in addition to 23,000 Iraqis. Australia will take 12,000 Syrians and Brazil 5,000. One could go on. I’m also certain that the United States will provide financial assistance to the United Nations for the aid of refugees staying in camps in the countries neighboring Syria.

A determined Viktor Orbán in Brussels / MTI / EPA Photo: Stephanie Lecocq

A determined Viktor Orbán in Brussels / MTI / EPA Photo: Stephanie Lecocq

In any case, despite his declaration of victory in Brussels, after the summit ended Orbán seemed by turns downtrodden and defiant. Because of the EU’s reluctance to defend Greece’s borders, Hungary has only two choices, he said. Either it continues to build the fence to keep refugees out of Hungary or it simply lets the refugees go to Austria. Although recent news from Hungary indicates that the fence building is continuing, not just along the Schengen border between Croatia and Hungary but also along the Slovenian-Hungarian border, I would be reluctant to predict the final move in this “fencing game” between Hungary and the EU. Tomorrow Viktor Orbán is paying a visit to his arch-enemy, Werner Faymann, chancellor of Austria, who is the greatest opponent of fences and who said that he is ready to take any number of refugees from Hungary.

If Orbán goes ahead with his current plans and orders the construction of a fence between Slovenia and Hungary, his rationale for building the fence in the first place evaporates. Until now he has piously claimed that the erection of the fence is for the sole purpose of defending the borders of Europe. Surely, a fence between Slovenia and Hungary serves only one purpose: to save Hungary from the immigrants. If Orbán decides to extend his fence northward between two Schengen countries he will be revealing his true intentions. I’m not sure he is ready to go that far.

On the other hand, János Lázár just announced that the Hungarian government is contemplating joining Slovakia in mounting a legal challenge to the refugee quotas agreed upon at the meeting of the ministers of interior despite the protestation of the Czech Republic, Hungary, Slovakia, and Romania. So, it seems that Viktor Orbán returned from Brussels with a renewed determination to fight any attempt to develop a common EU policy.

Meanwhile he is playing with fire just south of Hungary. It wasn’t so long ago that the Serbs and Croats were at war with one another, and now under the pressure created by Orbán’s fence the two countries are at loggerheads. Border controls have been introduced between the two countries, and they are engaged in a full-fledged trade war. Some people with Serbian passports were turned back at the border by Croat officials. It would be advisable for Orbán to stop his war of independence because it could have serious repercussions not just within the European Union but also in the Balkans, the powder keg of Europe.

Viktor Orbán seems to be endangering the stability of the region and sowing discord among the member states of the European Union for one reason only: to bolster the popularity of his party and ensure his desire for a perpetual premiership. At the moment he is ready to pay any price for that political victory at home. Unless someone stops him.

Demographic realities and Viktor Orbán’s ideas on immigration

Over the past thirty years Hungary has been sliding toward a demographic disaster. And the slide has only accelerated of late. In 2010 the population fell below 10 million. In the first five months of 2011 10% fewer babies were born and 2.7% more people died than during the same period a year earlier. The second Orbán government was keenly aware of the problem and tried, in its own way, to remedy the situation with all sorts of financial incentives, which didn’t work. In 2012 Fidesz MPs delivered optimistic speeches about the beginnings of a baby boom, only to have the Központi Statistisztikai Hivatal (Central Statistical Office) announce in May that 3.6% fewer babies had been born between January and May of 2012 than between January and May of 2011. Between 2010 and 2014 the country’s population decreased by 158,000. And that doesn’t count the 350,000-800,000, take your pick, mostly young people who are working abroad.

Despite the government’s program to entice young couples to get married early and produce at least two or three children, recent studies show that, in fact, both men and women are waiting longer before having their first child. And even if some miracle happened overnight and suddenly all the hospitals were filled with babies, it would be only a quarter of a century later that there would be any beneficial impact. A recent study by the Népességtudományi Intézet (Demographic Institute) predicts that, if current trends continue, by 2060 Hungary’s population will be under 8 million.

Of course, Hungary is not the only country in Europe with very a low birthrate, but according to Péter Mihályi, a professor of economics at Corvinus University, if we ignore the former Soviet republics, it is only Bulgaria that is in worse shape than Hungary in this respect. From government propaganda one gets the distinct impression that Viktor Orbán’s concerns stem from nationalistic considerations. A fear that can often be heard in right-wing circles is that Hungarian speakers will one day be virtually nonexistent and the language will disappear. Mihályi, by contrast, looks at the situation from the point of view of an economist and recommends systematic and well-directed immigration policies as a solution.

In 2001 Viktor Orbán himself realized that the steady decrease in the population and its concomitant aging could be effectively remedied only by inviting immigrants. In 2001 he delivered a speech before the Amerikai Kereskedelmi Kamara (AmCham) in which he outlined a plan according to which in the next five years Hungary could welcome several million immigrants. Otherwise, he said, the country could not maintain its rate of economic growth. He claimed at that point that “Hungary could easily provide livelihoods for 14 million people.” What kinds of people did Viktor Orbán have in mind? Since in connection with immigration he also talked about the forthcoming admission of Hungary to the European Union, he was perhaps thinking of western businessmen settling in Hungary in search of economic opportunities. He also pointed out that every year several thousand ethnic Hungarians from the neighboring countries settle in Hungary. He certainly didn’t have in mind Muslims from the Middle East or refugees from Africa.

Lately, one often hears about the hospitality offered to Croats and Serbs escaping the ravages of civil war in Yugoslavia. In 1991 about 50,000 people arrived from the northern Slavonian region of Crotia, adjacent to the Hungarian border. They were well looked after. A couple of years later, however, 16,000 Muslim Bosnian refugees reached Hungary, who apparently received a less hearty welcome. In a village along the Serbian border Péter Boross, who later became prime minister, announced in 1992, as minister of the interior, that “Hungary is full.” Why were the Bosniaks less welcome? The difference was the refugees’ religion and culture, as a 1994 study pointed out. The author lists all the difficulties Hungarian authorities encountered with the Muslim refugees. Perhaps it was not a coincidence that a year after the arrival of the Bosniaks, the Antall government amended the law on foreigners’ settling in Hungary to make it more stringent.

Refugees from Bosnia. These are the kinds of immigrants Hungary doesn't want

Refugees from Bosnia. These are the kinds of immigrants Hungary doesn’t want

A few years later Viktor Orbán made it quite clear that, although in theory he is in favor of immigration, that immigration should not come from non-Christian countries. The occasion was the refugee problem of Muslim Albanians expelled from Kosovo. Western politicians came to the rescue by offering to fly a certain number of these refugees to their own countries. At this point Orbán declared that “there will be no numerus clausus in Hungary.” All refugees who ask for admission to the country will be welcome. How they would get to Hungary he neglected to say. That’s why a commentator called this “generous” offer “perhaps the most cynical statement of the prime minister’s ten-month tenure.”

So, it is not really true, as most commentators suggest, that in fifteen years Orbán completely changed his opinion on immigration. No, he hasn’t changed a bit: he does not want to have Muslim riffraff in his Christian  country. He especially doesn’t want blacks from Africa in a pristine, white Hungary.

Apparently, despite all the propaganda to the contrary, the government is fully aware of the long-term effects of the current demographic trend. Attached to the 2016 budget is the latest government prediction that by 2034 the number of people living in Hungary will be less than 9 million. That is, if the balance between immigration and emigration is zero, something which, given the recent population movement, is unlikely.

This demographic trend will have serious consequences. First, there is the problem of a rapidly aging society. Fewer and fewer people must support a larger and larger number of pensioners. The number of children is rapidly decreasing. In 1990 there were 2.1 million children under the age of 14. By 2014 there are only 1.4 million. At the same time, the number of people over the age of 65 is growing. That will put an ever increasing pressure on the pension system, especially if the proposed referendum passes, which would allow men, just like women, to retire after 40 years of employment. Those who have only eight grades of education could theoretically retire with full benefits at the age of 54-56.

A decreasing and aging population also means a smaller domestic market, which puts a brake on economic growth. And, according to Mihályi, it limits job opportunities, especially for less educated people. Infrastructure, houses, apartments, tourist facilities, museums, football stadiums, restaurants and pubs will be underutilized. If the facilities and their offerings have fewer takers, prices must be raised. But there is a limit to raising prices. Enterprises can end up being unprofitable, and in this situation fewer people will start new businesses. These are some of the economic consequences of unfavorable demographics that people who keep talking about Hungary’s inability to take up immigrants don’t consider. They think the fewer the better. As Mihályi says, only children think that it is better to have fewer guests at a birthday party because then each of them will have a larger slice of the cake.

Given the huge differences in living standards between the east and west of the European Union, Orbán’s old dream of filling the country with West Europeans cannot materialize for a very long time, if ever. The prospect of ethnic Hungarians coming in great numbers is also unlikely. Romanian living standards are on the rise, and the Hungarians in Slovakia are quite satisfied. The Serbian situation is different. I just read that Serbian men and women in the city of Szabadka/Subotica, where the majority of the population is Hungarian-speaking, are madly learning Hungarian. They want to apply for Hungarian citizenship. Of course, not to settle there. One of the men who figures in the story is already in Berlin. So, Orbán cannot be that choosy.

Hungarian spies are everywhere

As the minister of the prime minister’s office responsible for, among other things, Hungarian intelligence, János Lázár has very little sense of what should remain secret. I found the minutes of his speech at the meeting of the parliamentary committee on national security on June 23 shocking. He outlined several ongoing Hungarian intelligence projects, endangering not only the work of the Hungarian intelligence community but also the anonymity of its members.

So, what did we learn about Hungarian intelligence from Lázár? A lot. He began with Ukraine, a country that is in the cross hairs of the Hungarian government. It is here that the Orbán government is trying to stir up trouble. Lázár praised the work of the Hungarian military and civilian intelligence in Kiev both during and “after” the Russian-Ukrainian conflict. Hungarian intelligence has also been busy in the Hungarian-inhabited parts of the Subcarpathian region of Ukraine. Reading this portion of Lázár’s speech, I gained the distinct impression that in this border region secret agents are busy feeding the Hungarian minority’s dissatisfaction. The Orbán government expects, perhaps even hopes for, a conflict between Ukrainians and Hungarians, which might give Hungary an opportunity to demand a “solution” to the problem. Only yesterday Magyar Közlöny (Official Gazette) reported that this year the Hungarian government has provided 116 million forints “for the training of civilian guards,” who are supposed to defend Hungarians against Ukrainian aggression. Lázár in his speech admitted that the Ukrainian government strenuously objects to the Hungarian government’s meddling in the country’s affairs. Indeed, the Orbán government treats Ukraine like a state from whose collapse Hungary might profit.

Hungarian intelligence is equally busy, according to Lázár, in Romania. What agents are trying to determine is the exact relationship between Romania and the United States because “we know that the U.S. is very much involved in Romanian domestic politics” but “we don’t yet quite understand the nature of this relationship.” I assume there are two aspects of U.S.-Romanian relations that worry the Orbán government: (1) the two countries’ coordinated anti-Russian policies and (2) a possible anti-Hungarian understanding between the two countries.

The third neighbor, Croatia, is also a country that is antagonistic toward Hungary. There the authorities try to discredit the country through attacks on Hungarian businessmen. What Lázár has in mind is the charge of bribery against Zsolt Hernádi, CEO of MOL, in connection with Ivo Sanader’s case, which ended in an eight-year prison sentence for the former prime minister. Since Croatia’s constitutional court only today overruled the verdict, Hernádi’s troubles are postponed, at least for a while.

As Lázár put it, “of the successor states of the former kingdom” present-day Hungary has unruffled relations only with Serbia and Slovakia. If we take this comment literally, then something must also be amiss in Austrian-Hungarian and Slovenian-Hungarian relations as well.

Lázár spent quite a bit of time on Hungary’s relations with the United States. “American-Hungarian relations, which have deteriorated significantly in the past few years and which at the moment cannot be said to be good,” make the work of the Hungarian intelligence community very difficult due to its former reliance on U.S. intelligence sources. Because the friction between the United States and Hungary developed as a result of Washington’s assessment of the domestic situation in Hungary, “the Information Office [the official name of the secret service] has to pay attention to accusations which through the western media are designed to discredit Hungary.”

spies

In plain English, Hungarian intelligence officers are following the activities of those people who in one way or the other pass information on to media outlets critical of the Orbán government. Lázár proudly announced that “several campaigns have taken place in the past few years against Hungary, which have been identified.” These foreign critics “unfortunately had their domestic allies, but the intelligence community could easily detect the channels through which incorrect and false information was transmitted.” Mind you, elsewhere in the speech Lázár called attention to the law that forbids intelligence officers from conducting any business at home.

The Hungarian intelligence service plays not only defense but offense as well. Lázár finished his coverage of the antagonistic media with this sentence: “It is no secret that the Information Office must take part in the work that will change the image of Hungary in the western world.” So, intelligence officers are being used to spread pro-Orbán propaganda abroad. The first fruits of this effort was athe German DGSAP report titled “Hungary in the Media, 2010-2014: Critical Reflections on Coverage in the Press and Media,” compiled with the active help of Klaus von Dohnanyi, the former socialist mayor of Berlin.

The European Union is also a target of Hungarian intelligence. In fact, Lázár instructed the Information Office to find out as much as possible about those groups who turn to Brussels for redress of the allegedly discriminatory practices of the Hungarian government. Lázár is very proud that they managed to learn who was responsible for some of the infringement procedures against Hungary. Thanks to Lázár, we now know that there are currently 65 infringement procedures in the works. Lázár finds the lobbying activities that take place in Brussels “shocking” because “they are conducted against Hungary and the work of the Hungarian legislature.” Unfortunately, the intelligence community has to take up this burden because, until recently, Hungary was unable to successfully represent its own interests in Brussels, unlike Slovakia, Romania or Poland.

The reason for Hungary’s poor performance in Brussels was the less than satisfactory work of Hungary’s Permanent Representation to the European Union, whose “most important task is to present and assert Hungarian interests and sectoral policies in the European Union.” Not long ago responsibility for this permanent mission in Brussels was moved from the foreign ministry to the office of the prime minister, under the supervision of János Lázár himself. Lázár commented on the move. “I will just mention, but I won’t give any details, that it was not by chance that the permanent representation and the information office are both under the same structural unit, the prime minister’s office.” Does this mean that the Hungarian permanent representation is filled with spies, or at least that there is cozy relation between the two bodies?

Two of the neighbors reacted sharply to Lázár’s revelations about Hungarian intelligence activities in their countries. The Hungarian ambassador to Ukraine was called into the Ukrainian foreign ministry where deputy foreign minister Natalia Halibarenko expressed her country’s worries about Hungary’s intentions. She said that conducting intelligence activities in her country without first informing the Ukrainian intelligence service was unacceptable. Nikolai Sungurovskii, the director of an important Ukrainian think tank, the Razumkov Center, expressed his opinion that Hungarian policies toward Ukraine pose a danger and that they may lead to a massive Hungarian separatist movement with possible Hungarian involvement. In fact, according to reports, the Hungarian government is prepared for a large Hungarian exodus from Ukraine.

Romanian-Hungarian relations have been rocky for a long time, but the presence of the former Romanian member of parliament, Attila Markó, in Hungary has exacerbated the situation. He is one of the many Romanian politicians who are being accused of corruption. I can’t pass judgment on his guilt or innocence, but I can say that Romanians have been taking corruption seriously lately and the number of arrests is very high. Markó escaped to Hungary, which irritates Bucharest to no end, especially since there is a European arrest warrant against him. The Romanian foreign minister asked Péter Szijjártó “to observe the European legislation in this field so that the procedure may be completed.” Hungary refused, and Romanian public opinion is up in arms. A Romanian politician who is not exactly a friend of Hungarians in the first place wrote an article on his blog in which he expressed his total amazement that Orbán has the temerity, after the Markó affair, to visit Romania this weekend. Indeed, Orbán is already in Transylvania. He posted the following picture of himself and his youngest daughter with this caption: “In Transylvania, at home.” I wonder what the Romanian reaction to this purposefully ambiguous caption will be.

Orban es Flora

Orbán’s Hungary under attack by its enemies, and they are many

While Viktor Orbán is battling the European Union and defending the country against the invading conquerors from Africa and the Middle East, the rest of the gang is not idle either.

János Lázár and enemies all around

Once upon a time, naturally before Viktor Orbán began work on the “renewal” of Hungary, there was a cabinet post to oversee the Hungarian intelligence network. Usually, the occupant of that post was a minister without portfolio. Now, however, like so many other matters, it is supervised by János Lázár, the all-powerful minister of the prime minister’s office. Orbán’s “chancellery,” as the prime minister’s office is often called, is a huge organization. The number of people employed in this particular office is close to 1,400. Of this number almost 650 people work for intelligence and information (i.e., propaganda).

On June 23 the parliamentary committee on national security, chaired by Zsolt Molnár (MSZP), asked Lázár to report on the current situation. It began as a routine affair, most likely prompted by the arrival of thousands of refugees at Hungary’s southern border. But as time went by, the hearing turned into something that I can only describe as an accusatory tirade against Hungary’s neighbors and indirectly against the United States. Naturally, the “internal enemy,” the opposition, is also charged with actively ruining their own country’s future.

The countries who were accused of anti-Hungarian policies are Ukraine, Romania, and Croatia. The Ukrainian government is guilty of impeding the Hungarian government’s efforts to assist the Hungarian minorities living in Ukraine. Lázár indicated that this attitude of the Ukrainian authorities keeps the Hungarian intelligence service busy. He also admitted that, as a result, diplomatic relations between the two countries are somewhat rocky.

enemies

In Romania, the government conducts an outright anti-Hungarian policy “under the guise of transparency and justice.” For some background, you might want to read my post on recent Hungarian-Romanian relations and the active Romanian Anticorruption Directorate (Direcţia Naţională Anticorupţie/DNA). Only recently Prime Minister Victor Ponta himself was accused of corruption by the DNA. In fact, Ponta just announced that for reasons of ill health he will retire for a couple of months and his deputy will take over the reins of government. Hundreds if not thousands of cases are pending, so the couple of Hungarian politicians accused of corruption cannot be interpreted as a deliberate attack on ethnic Hungarians or an unfriendly gesture toward Hungary.

But Lázár didn’t stop there. He, in fact, practically accused the United States of being behind the Romanians’ anti-Hungarian policies when he said that “at the moment we cannot ascertain whether these actions have anything to do with the close cooperation between the United States and the Romanian government.” I guess the hundreds of intelligence officers attached to the prime minister’s office are now madly trying to find out whether it is Washington that is encouraging the Romanians “to destabilize the financial foundations of the Hungarian historic churches [in Romania] and to limit the freedom of religion there.” The evil United States was also mentioned as being behind the bad German press.

Croatia is no friend either. Its government is bent on “discrediting the whole Hungarian business elite” through the MOL-INA affair. This is a long story about which I wrote at least twice, once in 2012 and again in 2013. Zsolt Hernádi, CEO of MOL, is being accused of bribery in connection with MOL’s purchase and management of the Croatian oil refinery, INA. Through a clever legal maneuver Hernádi has so far successfully avoided appearing before the Croatian authorities. But he cannot leave the territory of Hungary because he is still on Interpol’s wanted list.

Lázár further claimed that they have “unambiguous information” that certain business groups “intentionally boycott the completion of the pipelines coming from Romania and Croatia.”

All in all, incredible charges against Hungary’s neighbors from the second most powerful politician in Budapest.

György Matolcsy found an enemy in The Economist

It is not only governments that want to discredit and ruin Hungary. For example, the editors of The Economist decided to bury the economic achievements of the Hungarian government, as Matolcsy complained in a letter-to-the-editor. Here we learn that Matolcsy, who is a regular reader of the magazine, found the weekly tables presenting macroeconomic and financial market developments in certain countries and regions extremely helpful. He was, however, surprised to see that, “contrary to your former practice, since your 25 April issue the macroeconomic indicators related to Hungary have been omitted.”

After devoting a long paragraph to the spectacular achievements of his unorthodox economic policies Matolcsy comes to the point:

The omission of the data is detrimental to perceptions about the Hungarian economy. Moreover, its timing gives the impression as if The Economist was keen on presenting those data to its readers that confirmed the problems of the Hungarian economy, which indeed did exist in the past, while it would rather hide the data demonstrating the successes achieved in recent years. The deletion of information related to Hungary hinders readers with a general interest in economic developments from making an educated assessment, while it reduces the opportunity of investors with a presence in Hungary or considering future investments in the country to monitor the most important developments in the Hungarian economy in one of the world’s most widely read economic weeklies.

In brief, Matolcsy is certain that even the editors of The Economist are conspiring against Hungary by refusing to share the good economic news coming from the country. Surely, it is madness but, I’m afraid, quite typical. Otherwise, I just learned from György Bolgár’s column in 168 Óra, which functions as a kind of Hungarian “fact check,” that Hungary was replaced by the Philippines on the list of 42 countries, but only in the print edition. Online, Hungary is still there. Bolgár noted that Portugal, whose territory is practically the same as that of Hungary, is not listed either, although its economy is larger than Hungary’s. But, Bolgár added ironically, “they don’t have a Matolcsy who would indignantly complain.”

Freedom House is also an enemy of Hungary

Complaining at every instance about perceived unfair criticism is part of the central directive coming straight from Viktor Orbán, who repeatedly instructs Hungarian ambassadors to raise their voices every time Hungary is “unfairly” criticized. And the fact is that, as far Hungary’s current political regime is concerned, all criticism is unfair. For example, the latest Freedom House report, which degraded Hungary to a “semi-consolidated democracy” from “consolidated democracy.” What does that mean? Where does that put Hungary among the former socialist countries? Poland, the Czech Republic, Slovakia, and the Baltic states are consolidated democracies. As of 2014 Hungary joined Romania, Bulgaria, and Serbia as a semi-consolidated democracy.

A day after the report became public, the ministry of justice published an announcement titled “Freedom House paints a false picture of Hungarian democracy.” The arguments that are supposed to show that Freedom House’s criticisms are unfounded are weak. For example, on the electoral system’s failings, the ministry of justice can say only that “last year’s elections prove that our electoral system works well and reflects voters’ will.” What they neglect to say is that with less than 50% of the votes Fidesz managed to have a two-thirds majority in parliament. The only answer to the criticism of the justice system is that Freedom House should take a look at the European Union’s Justice Scoreboard, which “showcases the quality, independence and efficiency of the justice system.”

Freedom House is also wrong when it accuses the Hungarian government of not supporting disadvantaged social groups when in fact the government’s “main tools of these efforts are triggering economic growth, stopping inflation, creating jobs and public catering for children.” Clearly, this is no answer to the absolute neglect of the poorest segment of society. Otherwise, “the Government of Hungary is ready and open to all discussions concerning democracy and human rights, and accordingly to contribute to the development of a true picture of the country.”

One must admit that the present leaders of the country are unbeatable when it comes to misleading unsuspecting and trusting foreigners. Luckily, their numbers are diminishing.

International pressure on Viktor Orbán: Russia, Putin, and Gazprom

There is real concern among former Hungarian diplomats and foreign policy experts that Hungary’s isolation is practically complete and that she may remain the only “strategic ally,” to use Viktor Orbán’s favorite term even in connection with China, of Vladimir Putin’s Russia. And if the Orbán government does not try to extricate itself from this situation, the consequences can be serious. Although Fidesz supporters are convinced that the United States has embarked on the destabilization of the country with the goal of removing Viktor Orbán from power, this cannot be Washington’s intent. After all, the opposition is in disarray and replacing Orbán with another Fidesz politician would not accomplish anything. A new prime minister would be merely a figurehead; the real power would remain in the hands of Viktor Orbán.

Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States and the massive demonstrations against the internet tax that soon enough became a protest movement against the whole regime. But the latter wasn’t the U.S.’s doing. It was the folly of the Hungarian government that seems to commit more and more mistakes lately. Did Viktor Orbán lose his magic touch, or has he navigated himself into an impossible situation in which the “peacock dance” is no longer possible? He is increasingly being faced with a stark choice: either total commitment to the side of Russia or capitulation and acceptance of the rules of the game within NATO and the European Union.

Orbán might be a good politician–if we define a good politician as someone who can play one person against another, who can fool his allies, who disregards the law, and who within a few years manages to institute a one-party system, because that is what we have in Hungary. But his track record shows that he cannot govern, that he cannot run a country successfully. We who watched his first four years between 1998 and 2002 with growing concern knew that already, but it seems that in the eight years that followed his disastrous rule the Hungarian people forgot why they went out in record numbers to make sure that this man and his regime don’t come back.

The situation today is ten times worse than it was during his first administration. He has transformed the country into an illiberal democracy, and his pro-Russian policies have alienated Hungary’s allies. Viktor Orbán is considered to be a pariah and someone who is toxic because of his potential influence on some of the other countries in the region. Western politicians look upon him as a fellow traveler of Vladimir Putin. And, indeed, they seem to borrow each other’s ideas. Orbán copies Putin’s attacks on NGOs, while, it seems, Putin was inspired by Orbán’s nationalization of the textbook industry, reported just yesterday in the western press.

During his first administration Orbán was fiercely anti-Russian, and it seems that he didn’t change his mind on that score until lately. In December 2009 a Hungarian foreign policy expert and obvious admirer of Orbán described the forthcoming Fidesz victory as “Moscow’s nightmare.” Early in his second administration he worked furiously on a quasi-alliance system from the Baltic to the Adriatic in which Hungary would have a leading position. But his fellow prime ministers in the region wanted nothing to do with Orbán’s grandiose plan. He made every effort to dislodge Surgut, a Russian company that had a 21.2% stake in MOL, the Hungarian oil and gas company. By May 2011, after lengthy negotiations, the Hungarian government bought out Surgut, paying a very high price. At that time Hungary was no friend of Russia. Not yet. However, according to Fidesz sources, Orbán decided to radically change course sometime in early 2013.  He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant. According to the same sources, his decision was based on his belief that the Czech Republic and Germany would need cheap energy which Hungary would be able to provide.

Since then, with the outbreak of the Russian-Ukrainian conflict, the political climate in Europe has changed dramatically. Orbán’s flirtation with Russia is looked upon with more than suspicion. The West considers Viktor Orbán and Hungary a liability. Soon enough, I believe, he will have to show his true colors. No more peacock dance. But it seems that Orbán by now is embroiled in all sorts of machinations with Russia in general and Gazprom in particular. The current setting for Hungarian machinations with Gazprom is Croatia.

Just a few words by way of background. In 2008-2009 MOL acquired a 47.47% stake in INA, the Croatian oil and gas company. In 2011 a Croatian newspaper reported that Zsolt Hernádi, CEO of MOL, had been accused by the Croatian prosecutor’s office of bribery. Naturally, the Hungarian prosecutor’s office found nothing wrong, but the Croats eventually went so far as to hand the case over to Interpol. As a result, Hernádi couldn’t leave the country; otherwise he would have been subject to immediate arrest. More details can be found in a post I wrote on the subject in October 2013. The decision was eventually made to get rid of MOL’s share in INA, but the Croatian government does not have the kind of money needed to buy MOL’s stake. Lately, there has been talk in the Hungarian press that MOL will sell its shares to a Russian buyer, most likely Gazprom itself. So, Gazprom will not only store gas in Hungary but might even control almost half of INA in Croatia.

INA: Managed by MOL

INA: Managed by MOL

And now let’s return to American-Hungarian relations. According to some observers, “the highly unusual step of blacklisting six people with ties to the government in Hungary, a NATO ally and European Union member,” also has something to do with the “growing closeness between Hungary and the Kremlin over energy that could undermine Western attempts to isolate Russian leader Vladimir Putin over his intervention in Ukraine.” So far there is not much new in that assertion, published in an article by Reuters. We have known all along that, in addition to Orbán’s domestic policies, his relations with Russia were a serious concern to the United States and the European Union. What is new in this revelation is that Washington is apparently keeping an eye on the possible MOL-INA deal with Gazprom. According to the article, Chris Murphy, U.S. senator from Connecticut, was dispatched to Zagreb “to lobby the government … on the issue.” Another interesting piece of information gleaned from the article is that State Department official Amos J. Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs, met Hungarian Foreign Minister Péter Szijjártó and had a “productive meeting during Szijjártó’s recent visit to Washington about MOL’s stake, the South Stream, and Hungarian gas deliveries to Ukraine.”

All in all, it seems to me that Viktor Orbán is in over his head, especially with a foreign minister with no diplomatic experience. Szijjártó was an excellent spokesman for Viktor Orbán as the head of the “parrot commando,” but he is not qualified to be foreign minister, especially at such a delicate juncture.

It is hard to tell what Orbán’s next step will be. Fidesz media attacks on the United States are fiercer than ever, and its admiration of Russia is frightening. But more about that tomorrow.

Russia and the European Union on a collision course over the South Stream pipeline

It was a week ago that the European commission told Russia that the “South Stream” pipeline, already under construction, and the contracts between Gazprom and six members of the European Union, including Hungary, violate European Union law. Klaus-Dieter Borchardt, director for energy markets at the European Commission, told the European Parliament on December 4 that the “intergovernmental agreements are not in compliance with EU laws.” The EU countries that signed agreements with Gazprom were told that “they have to ask for re-negotiations with Russia, to bring the intergovernmental agreements in line with EU laws.” The countries in question are Bulgaria, Hungary, Greece, Slovenia, Croatia, and Austria, as well as Serbia, which is a member of the Energy Community, an EU-backed international agreement covering former communist countries in Eastern Europe.

Deli Aramlat

The European Commission identified three major problems with the South Stream. First, Gazprom is in violation of the so-called ownership “unbundling” rules, according to which a company cannot be both a producer and a supplier of gas. It cannot own production facilities and transmission networks. Clearly, Gazprom does. Second, according to EU law, non-discriminatory access of third parties to the pipeline must be ensured. In other words, Gazprom cannot have the exclusive right to supply gas through the pipeline. Finally, the Commission found problems with the tariff structure.

If these treaties must be renegotiated, there will be a delay of not months but, according to Borchardt, at least two years. Bulgaria has already protested. Bulgarian foreign minister Kristian Vigenin, who used to be a member of the European Parliament, made it clear that his country is not happy with Brussels’ decision. “It is not a nice move to slow the construction, because the parties to the track area are already in readiness to kick off.” He emphasized that “this is a very important project” for Bulgaria and expressed his hope that the European Union will not “stop the South Stream project.” Bulgaria already began construction of the South Stream at the end of October.

Brussels, however, seems to mean business. Borchardt said “in all openness and frankness that the South Stream pipeline will not operate on the territory of the EU if it is not in compliance with our energy law.” The Russians seem to be as resolute as the European officials are. A representative of Gazprom who was present at Borchardt’s announcement stressed that “nothing can prevent the construction of South Stream.” Russia’s position is similar to that of Viktor Orbán: EU law cannot prevail in EU-Russian relations, which are governed only by international law.

The Hungarian media covered the news coming out of Brussels, but the Hungarian government offered no response to the rather harsh verdict of the European Commission on the bilateral treaties that had been negotiated with Russia. Although here and there one could read about visits of Gazprom officials, nothing was known about the actual state of the negotiations and their particulars. Only yesterday Világgazdaság, a normally well informed paper dealing with economics and finance, reported that perhaps in the next week or so Orbán and Vladimir Putin will talk about the EU objections. Apparently Mrs. László Németh, the minister in charge of national development, was charged with preparing the prime minister’s visit to Moscow. I’m not sure, however, whether this meeting will actually take place. Because, as we just found out today, an agreement has already been signed.

As usual, details of Hungary’s negotiations with foreign powers came from the other side. The Hungarian public learned today that Aleksei Miller, president of Gazprom, paid a visit to Budapest yesterday and signed an agreement concerning the construction of the South Stream pipeline. Journalists immediately bombarded the head of Orbán’s press department for details. They were told that the prime minister and the head of Gazprom didn’t sign any agreement. He added that negotiations between Mrs. László Németh and Gazprom will proceed according to plans.

So we had two versions of the story. Someone was not telling the truth. At least this was the conclusion journalists of opposition papers came to. Stop, an online site, asked its readers whom they believed, the Hungarian government or the head of Gazprom. A relatively new online paper whose political views seem to me to be close to the Demokratikus Koalíció talked about the “selective memory” of the officials of the Orbán government.

It turned out that the spokesman for Viktor Orbán didn’t lie outright. It is true that Orbán himself didn’t sign anything. But something was signed all right: an agreement between Gazprom and MVM (Magyar Villamos Művek/Hungarian Electricity Ltd.), a state-owned company. As I understand it, MVM and Gazprom established a joint company called Déli Áramlat Zrt (South Stream Corporation), each with a 50% ownership. It is a large, expensive project that might pose serious financial risks to MVM, especially if the EU stands fast.

Experts figure that the Hungarian part of the project will cost around 300 billion forints, for which MVM will be responsible. Today’s Népszabadság points out, however, that MVM will be able to borrow such a large amount of money only if the project has the European Union’s blessing and financiers feel safe lending so much money to the Hungarian company.

I have the feeling that this is just the beginning of an extended imbroglio. Viktor Orbán is ready for his next battle with the EU, Hungary’s enemy.