Tag Archives: democracy

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.

“Pope of the Christians” and other gems from Viktor Orbán

Three days ago Viktor Orbán delivered another speech, this time to Arab bankers who gathered in Budapest for their yearly general meeting. The prime minister, who has been spreading fear of alien cultures from faraway places, spoke to these men as someone who is a great admirer of Islamic culture and the Arab way of life. He indicated in several ways that Christian culture as it exists in the West is inferior to the teachings of the Koran.

About a year ago one could read in the Hungarian media that “if Arabs receive permission to conduct banking activities in Hungary, businessmen suffering from a lack of capital could receive an infusion of money without paying interest.” Sharia law forbids the charging of interest on loans. The way banks owned by Muslims get around this religious rule is by directly investing in the businesses themselves. If the businesses are successful, they receive a share of the profit. I assume Viktor Orbán’s servile performance at this meeting had something to do with his desire to convince Arab bankers to conduct business in Hungary Sharia style. To this end, he exaggerated Hungary’s economic performance and the country’s openness and hospitality toward foreigners, and he praised Islam and Arabic culture to the skies. The combination bordered on the ludicrous and the embarrassing.

Orbán made several recommendations to the bankers about promising investments waiting for them in Hungary. First, he claimed that tourism has been growing by 8% to 10% a year, which is a gross exaggeration. I checked some of the figures. As far as the number of tourists is concerned, there was only one very successful year, 2014, when it grew by 14%. Otherwise, growth in the number of tourists has fluctuated in the past five years between 2% and 5%. He also suggested investing in real estate and called attention to the number of hotels in Budapest owned by Arab businessmen. He especially praised Adnan Kassar, a Lebanese businessman and politician, who has been a great friend of Hungary. Kassar was a frequent visitor to Hungary, especially during the first Orbán government (1998-2002).

In addition to real estate development, he talked about “our healthcare, which is highly developed,” a view few Hungarians share. He called attention to Hungary’s energy business, specifically investment in MOL, the Hungarian oil and gas company. Finally, he reminded the bankers that Arab investment in the Hungarian food industry has yielded excellent results in the past.

Orbán emphasized the benefits of Hungary’s having its own currency, adding that “those European countries that are not part of the eurozone are more successful than those that belong to it.” He assured them that Hungary has no intention of joining the eurozone anytime soon: “You can count on that.”

What else can Hungary offer the Arab investors/bankers? “Hungary is an open and friendly country in which friendly people live…. Hungarians look upon foreign investors as people who bring jobs to Hungary, and therefore they are our friends… Hungary is a safe country … in [Budapest] there are no ghettos, outlying areas where people can’t set foot safely. There is order and calm everywhere in Budapest.”

Over and above that, Hungarians know what “the culture of respect” is. In other parts of Europe this culture of respect is rapidly disappearing: “They respect God less and less, they don’t respect nations, and especially families.” Moreover, westerners “find all this natural, and they even found a positive word for all this. They call it progression. West of us everybody is progressive, but we don’t share this belief.” In Hungary the “culture of respect” is still thriving, and they can rest assured that “those who arrive here from the Islamic world will be welcome and respected. Hungarians think highly of the Islamic civilization … and welcome people of Islam as representatives of a high civilization.”

At this point Orbán got a bit confused. Here is the passage verbatim. “It was the head of the Catholic church, the pope, who either in 2008 or 2009, right after the financial crisis, surprised us with the following sentence. I quote him. This is what the pope of the Christians said: ‘One ought to read the Koran. If our bankers had known the rules of Sharia, we wouldn’t be where we are.'” Well, quite a quote, that’s for sure.

First of all, here is this very Christian leader of a very Christian country who talks about the pope as the pope of the Christians. This is especially funny since allegedly he is a good Calvinist (Hungarian Reformed Church) who should know that the pope is not his pope. So much for his religious education and knowledge. Second, I assume that the pope Orbán was allegedly quoting was Pope Benedict XVI, who I doubt  said anything of the sort. Let’s see what Benedict thought of the sharia laws. In 2010 he called together a special assembly of bishops to focus on the Middle East.

Often times, relations between Christians and Muslims are difficult, principally because Muslims [make] no distinction between religion and politics…. In some countries, the State is Islamic and sharia is applied in not only private life but also society, even for non-Muslims, with the consequent deprivation of human rights. Islamic States generally do not recognize religious freedom and freedom of conscience….

Political Islam includes different religious groups who wish to impose an Islamic way of life in Arab, Turkish, or Iranian society and on all those who live there, Muslims and non-Muslims alike.

Judging from the reactions of leading advocates, the document that included the above criticism was received with dismay in the Islamic world. Earlier, Benedict got into even greater trouble with his “Regensburg Lecture,” in which he quoted from a late fourteenth-century dialogue between the Byzantine emperor Manuel II Palaiologos and “a Certain Persian.” The controversial passage was: “Show me just what Muhammad brought that was new and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached.” Later Benedict explained that he didn’t share Manuel II’s views, but in the lecture he called attention to contradictory passages from the Koran, one being that “There is no compulsion in religion” and the other that it is acceptable to “spread the faith through violence.” Clearly, Benedict wasn’t taken either by the Koran or by sharia law.

Finally, Orbán reassured the Arab bankers that he will never try to preach to them about the benefits and superiority of democracy. Just because Hungarians, despite all their problems with democracy, manage to live with it doesn’t mean that they in any way want to influence the political systems of other countries. “So I can assure you that in Hungary nobody will lecture anyone on the benefits of democracy or human rights, simply because it would be disrespectful toward those who respect us with their presence.”

Reading some of the nonsense Orbán managed to put together only a few days after he was preaching against foreign cultures and multiculturalism, one can appreciate an “anti-poster” the local MSZP put up in Szombathely, close to the Austrian border. It reads: “When you come to Hungary, could you bring along a sane prime minister?”

Csaba Czeglédi / Facebook

Csaba Czeglédi / Facebook

Kim Lane Scheppele: Hungary and the State of American Democracy

Professor Kim Lane Scheppele of Princeton University doesn’t need an introduction to the readers of  Hungarian Spectrum or to anyone who is interested in Hungarian constitutional law or politics. Here is her take on the hearing held by Dana Rohrabacher, Chairman of the Subcommittee on Europe, Eurasia and Emerging Threats of the House Foreign Affairs Committee.

* * *

Usually, I write about the dismal state of Hungarian democracy.   But today, I will write about the dismal state of American democracy.

I went to Washington Tuesday to attend the hearing about Hungary before the House Foreign Affairs Committee, Subcommittee on Europe, Eurasia and Emerging Threats. You can see the hearing and read the witness statements for yourselves here.

The hearing had a much higher profile than one might have expected. Fully nine Congressmen showed up and stayed through much of the hearing, which counts as a big turnout on Capitol Hill. In the audience, there was standing room only. Once the hearing began, however, it became obvious that the Democratic and Republican sides of the committee were not evenly matched nor was the committee interested in what the witnesses had to say. The Democratic members of the committee did not really understand why they were there, but the Republican members of the committee had an agenda that they relentlessly pushed for the full three hours.

Republicans hammered home their point that the US is unfairly picking on Hungary because it has a conservative government that adheres to Christian values. Hungary has entrenched in its constitution respect for fetal life, traditional marriage and belief in God, they pointed out, suggesting that the Obama administration was criticizing Hungary because it does not share these commitments. According to committee Republicans, the US ignores worse violations of democratic principles in other countries but, with its criticism of Hungary, has singled out unfairly a country that has been a loyal friend to the US. They argued that the Obama government’s increasingly critical policy toward Hungary is nothing more than a politically motivated campaign. Nothing to worry about in Hungary, they argued — it’s just conservative.

The performance of the American Congress on display at Tuesday’s hearing was not something to be emulated by any other democracy. It started with the disrespectful tone of the hearing toward witnesses – with Republican Subcommittee Chairman Dana Rohrabacher of California leading the way – and continued with the ignorance of the members of Congress who should have known better about the subject of their own hearing. Most shocking of all was the fact that the questions from the House Republicans to critical witnesses were identical to those that have been directed in the past against other critics of the Hungarian government – including me – by representatives of the Hungarian government itself. (For evidence of that these ways of attacking critics are not new and have been the Hungarian government’s line for years, see my earlier responses to those same questions here.

Rohrabacher2

The Republicans followed the Hungarian government’s usual script precisely, which raises questions about how that script was communicated to them. Or maybe members of the subcommittee were really ignorant of the agenda they were pressing, which would be a different sort of scandal. Tuesday’s hearing made it appear that the important House Foreign Affairs Subcommittee had simply offered their space to a foreign government to put on the show it wanted.

In addition, the hearing provided yet another example of Republican congressmen undermining the foreign policy of the Obama administration. In its audacity, the performance of the House Foreign Affairs Subcommittee on Tuesday was only a step below the recent incident in which congressional Republicans wrote to the government of Iran to tell them not to negotiate with President Obama because he could not make his word stick. Tuesday’s hearing misrepresented and mocked the concerns of the State Department while Republicans on the subcommittee buried witness Deputy Assistant Secretary Hoyt Yee under a barrage of hostile and irrelevant questions that he could not possibly have anticipated because they required him to discuss other countries that were not on the hearing’s agenda. The committee Republicans seemed to be willing to allow a NATO ally – and a country where the United States has worked hard to promote democracy through multiple presidential administrations of both parties – to slide into autocracy so long as this autocratic government promoted Christian conservative values.

But two important things came out of this hearing – both more consequential over the long-term:

  1. The prepared remarks of DAS Hoyt Yee were more critical than any prior State Department statement has been to date about Hungary. After all, it is the State Department that is charged with articulating US foreign policy, not the House Foreign Affairs Committee, so Yee’s statement represents current policy. It linked Hungarian democratic weaknesses at home to its ability to be a reliable member of NATO: “Since internal weakness invites nefarious influences from the outside, NATO needs all of its members to be internally strong.” That is why the state of Hungary’s democracy will continue to be of concern to the US government.
  2. The Congressional Research Service prepared a report for the hearing, which was extremely critical of Hungary. The CRS has a reputation for being neutral, factual, and non-partisan. The report shows that the “fact assessment” arm of the US Congress has found that Hungary’s critics have truth on their side. This will have a larger influence than anything that the committee members said on Tuesday because it what everyone looking for a neutral source on Hungary’s present condition will cite.

Those are the two important takeaways from the hearing. We should not confuse the embarrassing performances of the members of the committee Tuesday for real US policy, which is moving ever more resolutely toward serious consequences for Hungary.

That said, the hearing was a dismal performance by America’s elected representatives. It appeared to be a victory for the Hungarian government, if only because the belligerent committee chair engaged in frequent monologues so only the Hungarian side of the story – which he presented – actually got out. It was the kind of victory that Hungarian Prime Minister Viktor Orbán specializes in – bullying, one-sided and mean. It was a demonstration of “gotcha” politics and depressing to see that the Hungarian government’s unfair tactics toward its opponents were transferred in every particular to Republican members of the US Congress who became the ventriloquists’ dummies for the government of Hungary.

For example, one of the witnesses was asked to recite the opening lines of the Hungarian constitution. Not surprisingly, he – being American – did not have the Hungarian constitution committed to memory. So the committee member triumphantly quoted the line: “God Bless the Hungarians.” And then he gave a lecture about how critics objected to the invocation of God, which was for him evidence of that the attacks of Hungary were politically motivated.

Actually, virtually all of the criticism of this opening line of the Hungarian constitution focuses on the fact that the constitution uses the word for “Hungarians” that covers only ethnic Hungarians and not all citizens of the country. So the constituent power invoked in the constitutional preamble fails to include Jews, Roma and members of other ethnic groups who are Hungarian citizens while it also includes ethnic Hungarians outside the territory who are not even citizens. That is why this statement raised red flags to many of us – not because it mentioned God. But the committee did not seem to have a clue about this issue.

Former Hungarian ambassador to the US, András Simonyi did a masterful job Tuesday holding his own as a witness in a show-trial-like situation. He focused on the Hungarian government’s refusal to recognize any limits on its powers and the way its non-transparent deals with Russia threatened to undermine European alliances, including the EU and NATO. Tad Stahnke from Human Rights First eventually got Chairman Rohrabacher to look a bit less sure of himself by mentioning the Hungarian government’s attacks on churches, which the congressman did not seem to know anything about (despite the fact that many of his colleagues signed a letter to the Hungarian government in 2011 protesting the cancellation of the legal status of hundreds of religious organizations and backing up the State Department concerns on this issue).

Chairman Rohrabacher got many of his facts wrong, and many dangerously so, but, since he controlled the chair, no witness could challenge them.For example, he denied all evidence of officially stoked anti-Semitism in Hungary, following the Hungarian government’s line that it is open-minded and tolerant while only the far-right Jobbik party is anti-Semitic. In response to an attempt by witness Tad Stahnke from Human Rights First to explain that the Hungarian government is rewriting Hungarian history through monuments, textbooks and museums to say that the Germans alone were responsible for the Holocaust in Hungary, Rohrabacher mocked the witness and pointed to the existence of open synagogues as the only evidence that was necessary to show that charges of anti-Semitism are baseless.

Chairman Rohrabacher was oblivious of the fact that surveys show levels of anti-Semitism in Hungary and a fear on the part of many Jews in Hungary about their futures there. He also didn’t seem to know that 30 of his Jewish colleagues in the US Congress had written a letter to Prime Minister Orbán protesting the Hungarian government’s rewriting of history again backing up the State Department’s expressed concerns. Chairman Rohrabacher’s denial that Jews in Hungary have reason to be alarmed was not a particularly good demonstration of his solicitude toward religion – or his colleagues.

The hearing made apparent that the House Foreign Affairs Subcommittee was living in a parallel universe in which they got to invent their own facts. They paid no attention to the Congressional Research Service report and its careful findings. The three Republican congressmen that stayed throughout the whole hearing (Chairman Rohrabacher and Republican members Randy Weber and Ted Poe from Texas) denied evidence about growing authoritarianism and intolerance in Hungary, which turned the representatives’ description of Hungary into something like the fact-denying opinions of some of their party colleagues on climate change, economic policy and more. Stephen Colbert used to say that “reality has a well-known liberal bias” which is what these committee members seemed to believe. And so they were having none of it.

In fact, Chairman Rohrabacher and his allies on the committee did even worse than engage in denying facts that the Congress’ own research arm established. They followed the script used by the Hungarian government to bash its critics, literally repeating the same questions, the same comparisons and the same defenses of Hungary that I have heard many times from members of the Hungarian government itself.

I was in the audience, but only the official witnesses were allowed to speak. So let me give Chairman Rohrabacher some answers to his questions, given that he did not extend the courtesy to the witnesses to do so. By now I know all about these questions, since Hungarian officials have asked me the very same questions so often.

Chairman Rohrabacher argued that the Obama Administration has singled out Hungary for criticism even though it is no different than many of the US’s allies. He asserted that the UK has no more “checks and balances” than Hungary has – so why pick on Hungary? (The UK is the Hungarian government’s favorite example, too.) But can he really know so little about the government of both places? Yes, the UK has many more checks and balances than Hungary. While the UK, like Hungary, has a parliamentary system in which the parliament elects the prime minister, it also has an upper house – unlike Hungary – as well as a fiercely independent judiciary – unlike Hungary. And it has well-functioning independent accountability offices that can call the government to heel, unlike Hungary. Plus the UK has a robust party system with real choices, a free media and a strong and independent civil society, unlike Hungary. It’s a ridiculous comparison.

Chairman Rohrabacher, backed by Congressman Weber, then argued that Bulgaria and Romania were more or less in the same league, democratically speaking, as Hungary, but they badgered DAS Yee about why the US wasn’t also picking on them. They should have known that both Bulgaria and Romania were let into the EU with asterisks. Neither country fully complied with EU criteria upon entry and both are still under the supervision of the EU Cooperation and Verification Mechanism to ensure their continued progress toward EU standards, which they have not yet met. Hungary, which sailed through without question into the EU more than 10 years ago, should not be in the same league with Bulgaria and Romania because it started off much farther ahead in its democratic performance. The congressmen were right that Hungary is no longer clearly ahead of Bulgaria and Romania, but the comparison is misleading. It’s not, unfortunately, because Bulgaria and Romania have gotten so much better. Instead it is because Hungary has gotten dramatically worse. Since when is an exit by one of its allies from the family of unproblematic democracies of no concern to the US government?

Chairman Rohrabacher also excused the current Hungarian government for gerrymandering the last election because gerrymandering happens in the US too. Yes, both countries gerrymander, but there are big differences between the gerrymanders. In Hungary, a single party gerrymandered the whole country at once, with absolutely no input from any opposition party; in the US, gerrymanders in national elections happen at the state level so there is variation in who captures the process across the country. Plus it is a violation of American election law to exclude all opposition parties from the process of districting, which is precisely what happened in Hungary. In Hungary, there is no judicial review of the district maps to check for unduly self-serving gerrymanders; in the US, court review of districting is routine. Not all gerrymanders are the same. Yes, the US is bad on this – but Hungary is far worse.

Chairman Rohrabacher seems to believe that the US and Hungary both single out politicians for unfair treatment when they are in opposition. If he thinks his party is badly treated under a Democratic administration, I wonder what he would think of being in a parliament where an opposition party would have no chance to introduce bills, make amendments, or even debate most proposals of the government – and where they cannot even see the bills far enough ahead of time to know what they contain before the governing party calls the vote to pass them. Or where any attempt to protest the exclusion of opposition legislators from participation in the legislative process comes with hefty fines against individual members who try to make their views known. I suspect he would think that that was a different world.

I could go on, but you get the picture. The performance of the House Foreign Affairs Subcommittee on Tuesday was shameful. The committee allowed itself to be used to parrot the views of the Hungarian government and in so doing, showed what dreadful shape American democratic institutions are in.

Orbán buries democracy with faint praise

After Viktor Orbán delivered his speech at the Friends of Hungary Foundation on Saturday, I received two e-mails calling my attention to it. One of them included a commentary on the speech by Zoltán Bodnár, former CEO of the Hungarian Export-Import Bank and earlier a deputy chairman of the Hungarian National Bank. Lately, Bodnár can often be seen on TV as the adviser to Gábor Fodor’s liberal party on economic matters.

Bodnár called Orbán’s speech a milestone, akin to his speech in Romania last summer about illiberal democracy. “Any of you who still have doubts about what kind of a society Orbán wants … should listen to this speech.” I searched for newspaper accounts of the event but was disappointed. I couldn’t find any earthshaking revelations in the summaries of Orbán’s speech. Bodnár must be exaggerating, I thought.

Today I know what the problem was. The summary that appeared in scores of Hungarian newspapers was prepared by MTI, the official Hungarian news agency, whose management has a keen sense of what should be left out of their reports. Anything that would create an outcry both at home and abroad must be ignored. And Bodnár was right. Those missing lines would have created an uproar if they had been widely reported.

First, I will look at the speech as it appeared on Orbán’s website. I will concentrate on those sections that were left out of the MTI summary and will also point to the prime minister’s creative use of quotation marks. Second, I will call attention to some very important sentences that were uttered during the question and answer period but were not transcribed for the prime minister’s official website.

What is it that Bodnár and others found more objectionable and more telling than Viktor Orbán’s words about “illiberal democracy”?

Democracy versus autocracy

The main theme of the speech was the necessity of breaking through political taboos that prevent us from finding the right answers to real questions. Instead of listening to our instincts, “we escape to a world of voodoo and taboo away from our own questions, the questions of our own lives.” According to the Hungarian prime minister, Europe is spending its energies on sterile debates about ideology and political systems instead of trying to find answers to such important questions as “how it is possible that while Europeans–including ourselves–value democracy over non-democratic arrangements, the latter are more successful today? Will democracy in the decades ahead–as we would like to believe–be capable of providing good political leadership?” While last summer Orbán simply talked about illiberal democracies, by now he got to the point of doubting that democracy can be a viable instrument of political leadership. While allegedly valuing democracy, he testified to the superiority and even desirability of autocracy over democracy.

Viktor Orbán in his element during the question and answer period

Viktor Orbán in his element during the question and answer period

Orbán elaborated on this theme: “The European politician is inclined to suppose that the question of political arrangement is of the utmost importance because, if it is solved, the problems of reality are automatically taken care of.” I think this sentence needs a “translation.” In my interpretation, what Orbán means here is that European politicians believe that democracy is the foundation of a healthy society and economic system, but in his opinion that is not the case. Democracy itself doesn’t solve problems, and solving problems doesn’t require a democratic system.

These were the main points that were cunningly left out of the MTI summary that circulated in the Hungarian media.

While I’m still on the main body of the speech, I’d like to point out at least one instance in which Orbán falsified his source. Orbán wanted to prove that small nations actually have an advantage over large ones in this uncertain world and that therefore “Hungary has a real chance to show new ways, new means, and methods for the benefit of the whole world.” What is the supporting evidence for this contention? Klaus Schwab, founder of the World Economic Forum, wrote an article a couple of months ago titled “Are You Ready for the Technological Revolution?” In it Schwab claims that “the defining features of [the new post-post crisis world] is the rapid pace of technological change. It is so fast that people are even referring to it as a technological revolution. This revolution is unlike any previous one in history, and it will affect us all in ways we cannot even begin to imagine…. In this new world, it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish.” The message is that countries, regardless of their size, will be successful as long as they respond quickly to technological challenges.

Orbán the technophobe took liberties both with Schwab’s text and with the very notion of citation. He attributed the following sentences to Schwab, putting them inside quotation marks: “The era has ended in which a big fish eats the small one. From here on the fast fish will rule while the slow ones will be destroyed. In this new world nothing will be taboo, we must study and re-evaluate all practices.

“No” to an intellectual direction that is considered progressive 

Finally, let me translate a passage that can be heard on a five-minute video in which the key sentences from the speech were collected. The most valuable part of the video is the one- or one-and-a-half-minute segment from the question and answer period. From Orbán’s answer it seems that someone from the audience must have said something about the “bad communication” of the government as the reason for Hungary’s unsavory reputation abroad. Orbán corrected him. Yes, communication could have been better, but this is not the only reason for the West’s dislike of his government. Here is the relevant text:

There is an intellectual debate in Europe about which way the Continent should be heading. What its mission is. In my opinion we are on the right side of this debate, but it is not a popular one. Today those are in the majority who think that Europe should move toward the fulfillment of individual rights, and that means three things. For example, it would help our individual freedom if we could get rid of our sexual identity. They think it would further the cause of freedom if we could get rid of our national identity. They think that we would be better off if we could rid ourselves of those ideas that stem from being God’s creatures. In this case we could make decisions more freely about life’s questions. But we don’t agree. It is better if we openly admit that. In our opinion, man will not be freer if he removes the barriers imposed on him by being a created entity. [Applause] In our opinion we don’t have to get rid of our sexual identity, our national identity. Here we cannot make concessions even if our reputation suffers. In these questions we can’t lie. The truth is that we don’t agree with the intellectual direction that considers itself progressive.

At least Orbán is honest here, which is something. It doesn’t happen too often. My other correspondent, who shared his reaction with me and many others, wrote: “I’m in despair. What should we do? What can we do? Our leader went mad. I feel sick!”

In the one published reaction to the video I found these words: “It rarely happens that I have to search for words, but it has happened. I looked at, I listened to the mad speech of our leader, and even without a degree in medicine I can say: we are in big trouble.”

What can I add to that? Perhaps I should correct the blogger who thinks that something is wrong with Orbán’s mental state. No, I am convinced that he is perfectly sane and that he believes every word in this speech as well as in many others. They are all variations on the same theme, except the message gets stronger with the passage of time. I wonder when the day will come that the Hungarian people as well as the European Union decide that they have had enough.

The shadow of János Kádár’s happiest barrack

In November 2009 the Pew Research Center conducted a survey in nine former communist countries. Twenty years had passed since the fall of the Berlin Wall, and researchers wanted to know how public sentiment had changed in the intervening years.

The countries selected were East Germany, Hungary, the Czech Republic, Slovakia, Poland, Lithuania, Russia, Bulgaria, and Ukraine. The results can be found on the Internet. A quick look at the interactive public opinion poll on some of the more important political questions reveals a lot about the mood of the people in these countries in 2009. The most startling finding was that Hungarians were the most dissatisfied and most disappointed people in the area. I believe that if a similar survey were conducted today, the divergence between the Hungarian figures and those of the other countries would be even greater than it was five years ago. Since then the lot of most of the neighbors has improved, while the Hungarian economic and political situation has worsened.

Here are some selected data from 2009. While in 1999 80% of Hungarians were looking forward to the coming of the market economy, by 2009 only 46% had any trust in the capitalist system. The only other country with similar results was Ukraine. Hungarian’s satisfaction with democracy was the lowest (21%), compared to Poland’s 53%, the Czech Republic’s 49%, and Slovakia’s 50%. But perhaps the most interesting finding was that it was in Hungary where most people (72%) thought they were better off during the communist period than in 2009. Compare that to 35% of the Poles, 39% of the Czechs, and 48% of the Slovaks.

Pew Research Center's Global Attitudes Project / November 2009

Pew Research Center’s Global Attitudes Project / November 2009

Political analysts have been trying to find an explanation for this discrepancy between Hungary and her closest neighbors (the Czech Republic, Poland, and Slovakia) in attitudes toward the regime change and what followed. Clearly, there were heightened expectations everywhere, but while, for example, in Poland, Slovakia, and the Czech Republic there was only a slight drop in the population’s positive attitude toward the market economy, in Hungary the drop was huge–from 80% to 46%.

What makes the Hungarian situation so different from that of the other countries? From repeated surveys we know that there is something in Hungarian culture that makes Hungarians consistently dissatisfied with their lot. That by itself, however, is not enough to account for the incredible disappointment reflected in these numbers. It is also unlikely that Hungarian politicians who were responsible for the introduction of democracy and a market economy in Hungary were totally unfit for their jobs. Or that they were significantly worse than their colleagues in the neighboring countries. All countries had their own political upheavals, and they also made bigger or smaller political mistakes. So, I don’t think that the key to the puzzle of Hungarians’ dissatisfaction with their political and economic situation can be found in either the national psyche or the political leadership.

There has to be some other fundamental difference between Hungary and the other countries that accounts for the huge divergence in attitudes and outlook. The answer, I believe, lies in the unique nature of the Hungarian version of the socialist system. Ironically, Hungary’s troubles today most likely stem from the fact that the Hungarian people had it too good under János Kádár. If they had had to live in the kind of dictatorship that existed in Czechoslovakia under Gustáv Husák or in Romania under Nicolae Ceaușescu, today they would have a much greater appreciation of democracy. If Hungarians had had to face empty shelves in the stores as the Poles did or to suffer as much economic hardship as the Romanians, they would have a much more positive view of the market economy.

But the Kádár regime, especially in its last ten years, was a benign one-party system, what Hungarians call a “soft dictatorship.” The great majority of people wouldn’t have had any reason to complain about their limited freedom since their demands were modest in the first place. Most people were satisfied with their lot because they noticed a steady growth in their living standards year after year, almost to the very end. It’s no wonder that with the exception of a very small group of “dissidents,” really a handful of people, there was no serious opposition to the regime.

The lives of Hungarians in economic terms have not changed for the better since 1990. Yes, there are people who have become very rich, but in Hungary in 2009 77% of the people believed that “the rich just get richer while the poor get poorer,” as opposed to around 50% in the neighboring countries. I’d bet that if we had a similar poll today, even more Hungarians would think that in the last five or six years the situation has deteriorated further. Today poverty is widespread. All in all, there are very good reasons for economic dissatisfaction, which cannot be counterbalanced by positive feelings about the introduction of democracy, especially since Viktor Orbán’s system is a far cry from democracy as most people understand it.

The relatively good economic situation of the population during the Kádár regime, the fact that slowly but surely people became satisfied with their lot might also be responsible for some of the failures of the new political elite. Many of the economic ills of Hungary in the last twenty-five years stemmed from a fear of moving in a direction that might lead to a severe drop in living standards, to which Hungarians, given their relative well-being under the Kádár regime, would react very negatively. Much more negatively than the populations of other post-communist countries who were accustomed to hardship and privation. Therefore, a restructuring of the economy was postponed time and again because of fear of a backlash. Over the years, governments overspent in order to satisfy economic demands only to be forced later to introduce austerity measures when the deficit spiked. No one dared to bite the bullet and make the Hungarian system a fully functioning market economy in the western sense. The irony of it all is that the economic system that more than half of Hungarians hate is not really a market economy in the classical sense. As someone rightly put it, Hungarian capitalism has all of the negative features of the market economy without any of its benefits. János Kádár’s system continues to cast a dark shadow over today’s Hungary.

János Kornai: Hungary’s U-turn

János Kornai, the renowned Hungarian economist, Professor of Economics Emeritus at Harvard University and Corvinus University of Budapest, has written a new paper about the situation in Hungary. He notes that the main direction of the changes up to 2010 was progress toward democracy, the rule of law, and a market economy based on the dominance of private ownership. Hungary is the first, and so far the only, member of the group of 15 post-socialist EU member countries to execute a sharp U-turn and set off resolutely in the opposite direction. The country has shifted from democracy to autocracy. The final version of this paper will be published in the October issue of Journal of Democracy. I’m grateful to Professor Kornai for allowing me to share this prepublication working paper with the readers of Hungarian Spectrum.

 * * *

 

 

Hungary’s U-Turn

János Kornai

 Prepublication working paper

January, 2015

Do not quote without the author’s permission

Hungary is a small country, poor in raw materials, with a population of only 10 million. No civil wars are being waged on its territory, nor is there any popular uprising or terrorism. It has not got involved in any wars, and it is not threatened by immediate bankruptcy. So why is it still worth paying attention to what is going on here? Because Hungary – a country that belongs to NATO and the European Union – is turning away from the great achievements of the 1989-1990 change of regime – democracy, rule of law, free-working civil society, pluralism in intellectual life -, and is attacking private property and the mechanisms of the free market before the eyes of the whole world; and it is doing all this in the shadow of increasing geopolitical tensions.

 

1

Let us consider the ensemble of the following countries: Albania, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Estonia, Croatia, Poland, Latvia, Lithuania, Macedonia, Hungary, Romania, Serbia, Slovakia and Slovenia. All of these now independent countries reached a crucial turning point in 1989-1990. Previously, they had functioned as independent states or as separate parts of states within the socialist system, ruled by the Communist party. Then the change of system started. The structure and pace of the transformations varied from country to country. Severe failures occurred in all of them, including Hungary; one step forward was often followed by a period of regression. However, despite the colorful variations, the main direction of the changes was common up to 2010: progress towards market economy based on the dominance of the rule of law and of private ownership.

Hungary is the first, and so far the only, member of this group of 15 countries which has performed a sharp U-turn and set off resolutely in the opposite direction. At the 2010 elections the coalition formed by Fidesz – Hungarian Civic Alliance with the Christian Democratic People’s Party (henceforth Fidesz for short), led by Viktor Orbán, won a landslide victory. That was when the turn began.[1]

  1. By 2010 the fundamental institutions of democracy had been established in Hungary – however, with the U-turn their systematic destruction started. It has already been completed to a significant degree.

In actual practice the executive and legislative branches are no longer separate, as they are both controlled by the energetic and heavy hand of the political leader who has positioned himself at the very pinnacle of power: Viktor Orbán. No worthwhile preparatory work on bills is being done either within or outside the walls of Parliament.  Parliament itself has turned into a law factory, and the production line is sometimes made to operate at unbelievable speed: between 2010 and 2014 no less than 88 bills made it from being introduced to being voted on within a week; in 13 cases it all happened on the same or the following day. Without exception, every single attempted investigation of the background of a scandal that has just broken, which would have been carried out objectively by a parliamentary committee with the effective involvement of the opposition, has been thwarted. ‘Reliable’ people close to the centre of power occupy decision-making positions even in organizations which are not under the legal control of the executive branch and which, in real democracies, should serve as a counter-balance to monitor the executive and legislative branches: in the constitutional court, the state audit office, the fiscal council, the competition authority (the office in charge of enforcing pro-competition laws), the ombudsman’s office and the central statistical office, as well as the national tax and customs office.

  1. The basic institutions of the rule of law had emerged by 2010; however, since the U-turn they have been abolished or significantly weakened. The new Hungarian constitution was drafted by a small group within Fidesz, and no wide public discussion ensued. All protests were completely ignored, and it was dragged through the defective filters of the law factory in very short order. The text abounds with shortcomings, which were pointed out immediately (and in vain) by outstanding Hungarian and foreign legal experts. It contained so many clauses which served the immediate political purposes of the people in power that the document, officially called ’Fundamental Law’, has had to be amended five times. In 2011-2013 the Fundamental Law was complemented by the passing of 32 so-called ‘cardinal laws’, which future parliaments will be able to modify only by a two thirds majority. This collection of laws almost completely covers every aspect of the country’s life.

One of the fundamental principles of the rule of law is that no-one, not even those who hold the most power, should be above the law. The law must be respected. In Hungary, the situation has changed: the holders of power are able to elevate any decision to the status of law quickly and without let or hindrance, at the push of a button. They pass retroactive laws, disregarding the prohibition of such legislation which goes back to Roman times. If they wish to arrange especially generous treatment for an individual or an organization, they pass laws using legal tricks which ensure de facto favoritism.

Moving on to the juridical branch of the state, the Prosecution Service is a centralized organization in Hungary. It is theoretically independent, not under the control of the government. In practice, however, and that is what is important, the chief prosecutor is chosen by the holder of supreme power, followed by a purely formalistic appointment by the parliament, which from then on is unable to effectively control him. The chief prosecutor executes the central will through the hierarchy that he heads. With a few insignificant exceptions, the investigation of all public scandals and cases of corruption involving individuals close to the present government party has got stuck in either the investigative or the prosecution phase of criminal proceedings. The Prosecution Service has, on the other hand, brought its full powers to bear on other economic scandals and cases of corruption in which people belonging to the current opposition are implicated. Dramatic, spectacular arrests are carried out for the benefit of the cameras, which arrive in droves. Compromising facts are often leaked while investigations are still in progress. No effort is spared to make sure that these cases come to court, though it is true that all too often charges have to be dropped in the prosecution phase, for lack of sufficient evidence; in other cases the charges are rejected by the court. And it is noticeable that the timing of a leak, of the bringing of charges or of a court hearing coincides frequently with some event on the political calendar: the mine which will destroy a rival’s reputation is detonated just before an election.

We seem to be witnessing a decided attempt by the ruling political group to take control over the courts as well. The President of the Supreme Court, who had been appointed before 2010, was dismissed early, before his mandate expired. A new institution emerged, the National Office for the Judiciary, which from the very start acquired exceptionally wide powers: not only to appoint judges, but also to decide which cases should be heard by which courts. Later, as a result of protests in Hungary and from abroad, the sphere of authority of Office was reduced, but its influence has remained significant. The retirement age fixed for judges was conspicuously different from average age limits and from the previous norms, with the result that the older generation was expelled. This affected several judges in leading positions within the judiciary system, who had been appointed before the present ruling group came to power, and although this measure was subsequently annulled by the relevant international court, so that the people involved obtained at least moral redress, most of them were not able to return to their previous leading positions.

Numerous members of the judiciary are unable to escape from the intimidating effect of the government’s measures. Some cases which come to court have political ramifications, and impartial experts in the field believe that some judgments are biased in ways that favor Fidesz policies. Nobody ventures to express an opinion about the number of cases involved. What is sure, however, (and encouraging) is that the ruling regime has not managed to subjugate the judiciary to the same extent as they have done in other spheres.

  1. By 2010 private rather than state ownership had become the dominant form of ownership. Since the U-turn, however, private property has become the target of frequent legal, economic and ideological attacks; the weight and influence of the state sector is rising again. The nationalization of private pension funds financed from the obligatory contributions of employers and employees, which was carried out using unique legal tricks, dealt a heavy blow to the principle of respect for private property. A similar form of indirect nationalization took place in the sector of saving and loan cooperatives. The state-owned sector has expanded significantly in the branches of banking, energy, public works, transportation, the media and advertising. In these areas the harsh means of disguised confiscation were not so often applied: property rights were bought instead. In many cases the previous owners were forced into a position where they felt they had no other option but to sell their property to the state, and at a price well below its market value.
  2. Up to 2010, decentralized mechanisms played an increasing role in the coordination of various activities. However, since the U-turn the tendency to centralize has become noticeably stronger.

This is primarily true of government administration. One of the major achievements of the change of regime was a significant increase in the powers of local government. The most obvious sign of regression is the fact that schools and hospitals no longer belong to local authorities, but are run from the bureaus of the central government. It is unprecedented – even on a world scale – that a misshapen bureaucratic giant has emerged, which decides over the heads of teachers, parents and local governments about staffing, curricular and financial matters in thousands of schools.

The obsession with centralization, which is intertwined in many ways with the aforementioned tendency to nationalize, affects almost all spheres of society: more and more  questions are decided at the highest level. A pyramid-like vertical hierarchy has emerged and solidified, with the supreme leader at its summit. Below him, ready to obey his every command, stand his hand-picked henchmen, who owe him unconditional loyalty.  Moving on down, we find the next level of the pyramid, and the next: for each position people are chosen for their loyalty to the regime. Commands which take obedience for granted tightly bind each subordinate to his or her superior. It is only the leader at the top who does not depend on his superior, only those at the very lowest level do not give orders to anyone. Everyone else incorporated into the levels in-between is servant and master at the same time. It is in their interests to hang on in there, to move further up in the pyramid. Their position is not decided at elections, but depends on winning the trust of their superior by services and flattery, or at least by uncritical obedience. Hundreds of thousands of public employees, including those who work in the state-run educational and health sectors, feel defenseless: few dare to speak up, to protest, because they fear for their jobs. The regime is robust, partly because it can surely count on the fear of the majority of people dependent on it, as well as on the ‘keep a low profile and obey’ mentality.

A very important decentralized mechanism is represented by civil society, a number of non-market based organizations and associations which are outside the control of state bureaucracy. In twenty years these have developed too, and have also become a means of scrutiny without which it would be impossible to expose and fight abuses of power. One manifestation of the U-turn is the methodical harassment of civil society. When parliamentary bills are being drafted trade unions and other relevant organizations are not consulted. Or if the people concerned express their point of view, in declarations or at demonstrations, their voices are disregarded. The indignant protest of the Norwegian government against the Hungarian government’s plans to interfere in their generous offer of assistance to Hungarian civil society is widely known.

While describing the processes of reversal I did not discuss the causes that induced   the U-turn. There were several important factors here: the grave mistakes made by the governments between 1990 and 2010 and the political parties functioning within and outside the parliament, the spread of corruption, the trauma caused by the appearance of mass unemployment, the increase of social inequality and the disappointment of a large proportion of the population after the high expectations brought by the change of system. It takes a long historical process for democracy to mature, and Hungary has just begun that learning process. It would be essential to complete a thorough causal analysis of the historical past; this, however, exceeds the limits of this paper. Therefore I will only deal with the new period starting with the 2010 elections.

2

When describing the coordinating mechanism of economic activities we cannot apply the metaphor of the U-turn: it would be more precise to call it a half-turn. Market mechanisms became dominant in Hungary in the first two decades after the change of system, and remained so even after 2010. Just as before, state and market continue to coexist in a symbiosis: there is no modern economy where these two social formations would not coexist and exert reciprocal effects.  The change that Viktor Orbán’s regime introduced is that now the state impinges on the economy in a much more aggressive fashion than the governments before 2010 did: it exerts more efforts to rule over it. This is done in many ways.

We are not talking about a case of ‘state capture’ carried out by a small group of oligarchs in order to establish regulations and pass measures in their own interests.  The direction of the process is the reverse. Orbán and the people who are close to him at the peak of political power decide who should become an oligarch, or who should remain an oligarch if he already is one, and how far his sphere of authority should extend.  Something similar takes place at lower levels too. The natural selection of market competition is overwritten by political considerations. “The important thing is that our man should win the public procurement tender, get permission to run a tobacconist’s or a casino, obtain tenure of that state-owned piece of land”. Tobacconists, casinos and land tenure all work on capitalist principles, but at the same time clientelism, a kind of feudal master-servant dependency, is asserted between the politician/bureaucrat and the capitalist entrepreneur.

A new term has been introduced into everyday Hungarian: ‘Fidesz-közeli cég’, meaning ‘a near-to-Fidesz company’.  Such firms do not belong to the party, but the sole or principal owner of the company is a crony of the political center. Maybe the association began a long time ago, at university or when the party was founded; or an individual’s career may have included a succession of political, bureaucratic and business activities. ‘Crony capitalism’ evolves. The intertwining of the worlds of business and politics is a global phenomenon, and provides fertile soil for corruption everywhere. What comes on top of this in Hungary is the social environment created by the aforementioned U-turn: the very organizations which should be fighting, with the authority of the state behind them, against the intertwining of business, politics and government and against corruption are not independent: they themselves are cogs in the same machinery. Just like any member of the Mafia, a corrupt politician or bureaucrat knows that the Mafia state will protect him – unlike the ‘whistleblowers’, who take personal risks to unveil corruption. The latter are not sufficiently protected, but often harassed, and even ‘character assassination’ campaigns are launched against them.

Viktor Orbán and those who implement his economic policies are swift to emphasize that if the state needs more income this will not be a burden for the people, and there will be no  ’austerities’. The new tax will be paid by companies, out of their profits. The word ‘profit’ itself has as bad an undertone as it did in the good old times when Marxist political economics was an obligatory subject for study. Above the usual forms of taxation special supertaxes have been used to pillage whole sectors, especially banking but also telecommunications, insurance, houehold energy supply, and a few other sectors. The effect of special taxes contributes to the fact that the volume of investments by private companies financed from their profits stagnates or barely increases. An unpredictable tax policy, legal uncertainty and anti-capitalist rhetoric discourage the ’animal spirit’; the propensity to private investment.[2] The extra-ordinary tax burdens ensure that the budget is balanced, which is reassuring for international organizations and credit rating agencies who are extra-sensitive to this indicator, but it does undermine an extremely important factor promoting growth and technological development. Moreover, it is not true that the extra burdens hit on the companies only, as they pass the extra costs, if possible, to the consumers.

While companies are held to ransom, the individual tax burden based on dividends has been significantly reduced. One of the first measures introduced by the Fidesz government was the abolition of progressive personal income tax, which was replaced by a flat rate of 16 percent, while at the same time value added tax was raised to an unprecedented 27 percent. It is known that in relation to the income of a given household, these tax rates impose a much greater burden on the living standards of people with low incomes than on those who earn more. Government propaganda proclaims as a great achievement the reduction of household expenditure on utilities through price-cap regulation. In reality, this price-capping policy is far more beneficial for the rich, as the bigger the flat, the more electricity, gas and water it uses, and the more rubbish it produces, the more it saves. We are all too familiar with the consequences of artificially depressing prices from the days of socialism. Companies make a loss, which in the end has to be scraped together by the community of tax-payers.

Restricting the functioning of the price mechanism is an important feature of the general phenomenon which has just been discussed: the state leans heavily on the private sector, using, among other means, administrative micro-interventions, fine-tuning of control and excessive regulation. Every economist who has studied the theory of market failure knows that appropriate regulation and well-aimed intervention can correct many problems caused by an uncontrolled market mechanism. This theory, however, at least tacitly, supposes that the state is at the service of public interests, and that regulation is carried out professionally and without bias. What happens if the levers of regulation are seized by incompetent or even corrupt people? What happens if a state whose masters use the state mechanism to preserve their own power interferes in the economy? Such interventions happen so frequently and affect the coordination process of the economy so deeply that sooner or later the half-turn can become a U-turn in this field as well.

The economic policy followed by Fidesz cannot win the approval of the conservative economist because of the upheaval that it causes to market mechanisms and the way it threatens private property. At the same time, it arouses rightful indignation in the liberal economist who is sensitive to the injustice in the distribution of income. It is not only the tax policy mentioned above, but various other measures must be disagreeable for them. The adherents of Keynesian economic policy must not let themselves be deceived by aggregate employment statistics. The revival following the depression is dragging its feet, the private sector is creating few new workplaces. The growing number of people in ’public work’ is supposed to make up for that. But they are employed for rock-bottom wages, 31-33 percent of the average salary, under degrading circumstances; they are not guided into the employment market this way, but kept permanently in their humiliating condition. Poverty and social exclusion are increasing at a dramatic rate. Enlightened societies would never tolerate the tone of voice that is used to stigmatize the poorest, or the way the homeless are chased out of cities by mayoral decree.

Any attempt to squeeze the classification of the Hungarian government’s economic policy into boxes labeled ’right wing’ or ’left wing’ is off-track. There is no question of the government intending to restore the socialist system, even though some phenomena are surprisingly reminiscent of the socialist era. The Orbán regime is not only compatible with capitalism, but each member of the power pyramid uses the opportunities offered by capitalism to their own advantage. When they launch an attack on banks or other sectors, they immediately conclude a special deal with this or that bank, sign ’strategic agreements’ with this or that large company in front of television cameras. ’Divide and rule!’ Instead of the left-right division, let us put the economy into another kind of spotlight: what best serves the survival of the existing power structure, the power of the central will, the interests of the higher levels of the power pyramid, including their financial interests? Suddenly it all falls into place and we know why this new institution or that new law emerged.

3

Hungary’s friends abroad, intellectuals, journalists, political and economic analysts, diplomats and politicians who take an interest in the happenings here, do unintentionally fall into various traps or misunderstandings. One of these is to overestimate the value of the letter of the law.  At first, the Fidesz government created a law which failed to guarantee the complete independence of the central bank. Not only the media, but also the competent international organizations exerted pressure on the Hungarian state to change the law. This finally happened. Those who had demanded the change felt they had achieved success. The propagandists in Budapest used it to illustrate how flexible and ready to compromise the Hungarian government is. In reality, what happened to the law was irrelevant. Having resigned from his position as minister of finance György Matolcsy, who the prime minister publicly dubbed “his right hand”, stepped out of the ministry, walked a few hundred yards and entered the doors of the Hungarian National Bank, as its theoretically independent governor. Without exception, every single member of the highest body of the central bank, the Monetary Council, was hand-picked by the supreme leader and his advisers; they are all loyal members of the consolidated machinery of power.

According to the letter of the law, every single selection process conforms to various seemingly neutral legal regulations. For example, for one position the current Prime Minister nominates a candidate, the competent parliamentary committee expresses an opinion, and he is appointed by the President of the Republic. For another position the parliament not only expresses an opinion about the candidate, but also makes the final choice. Does this matter? The parliamentary committee, the majority of the complete session of parliament (a two thirds’ majority, at that), and even the President of the Republic are all cog-wheels in the same machinery of power.

Another important example is how the regime leans on the press, television, radio and other means of telecommunication. This is about nothing less than the independence of the ‘fourth branch of power’, the liberty of one of the most important checks and balances which function in real democracies. The competent bodies of the European Union and the international press dwelled at length upon the question of whether the rights allocated  to the centrally appointed media authority were excessive or not. Finally, a few regulations of the law on the media were amended. The critics considered this a victory. Viktor Orbán and his colleagues, however, knew perfectly well that it was irrelevant. What really mattered was the fact that they had put their own people in charge of all television channels and radio stations owned, controlled and financed by the state, who then purged their staffs and turned all of them into the collective mouth-piece of government propaganda. The government or near-to-Fidesz entrepreneurs seized the freely distributed and very popular advertising broadsheets and other free local media products. The state media are obliged to use material provided by the news agency controlled by the government. This is not obligatory for the country’s privately owned media, but the latter are offered new state-produced material free of charge, while purchasing news from independent international agencies or trawling the foreign press is expensive. It is hardly surprising that they are reduced to using the free material. Self-censorship, a form of behavior all too familiar from the communist era, is becoming widespread.

There are newspapers, television channels and radio stations which are independent of the government, and critical of it. This is very important; it is part of the impartial description of the present Hungarian situation. However, many obstacles are raised to their functioning, for example during the distribution of broadcasting frequencies, when licenses are granted. Their main source of revenue is advertising. Not only the government’s own agencies, but also private companies which wish to maintain friendly relations with the political masters refrain from advertising with them. Discrimination manifested in the advertising market has been compounded by an advertising tax piled on top of the existing corporation tax. The relevant decrees were worded in such a way that 81 percent of the advertising tax was to be paid by one broadcaster, RTL, even though its share of the advertising market is only 15 percent. This is how one company has been punished for its dogged independence and regular criticism of Fidesz politicians.

No matter how hard the authorities try to subdue the organizations which form public opinion, the IT revolution has made their task more difficult. Stalin was able to surround his empire with almost impenetrable barriers, but nowadays this is impossible: computers, tablets and mobile phones connect the individual with the world through the internet, hundreds of thousands can express their opinions and organize themselves on social networking sites. The Fidesz government would love to find a way to prevent this too.  Not long ago it proposed the introduction of an internet tax. Each gigabyte data transfer would have been taxed to the tune of 150 forints (roughly 55 USD cents). Within a few days, mass demonstrations had been organized; images of the protesters circulated in the international press. Viktor Orbán retreated – half-way: as I write these lines it is not yet clear if the plan has been abandoned for good or merely postponed. Whatever may happen, the image of tens of thousands of demonstrators raising their mobile phones to the sky has become a symbol. The light from the tiny screens might even have illuminated the clouds of the internet – today no regime is able to raise impassable barriers to the flow of free speech.

 4

Here is another frequent intellectual fallacy: certain recently established Hungarian institutions, or new procedures that have been introduced lately, are similar or even identical to the parallel institutions of a traditional Western democracy – at first sight. Many changes have been made in the Hungarian judicial system. What is wrong with that? After all, even after these recent changes, in many ways it still resembles the systems of some European countries. The tobacco trade used to consist of small shops competing with each other. Now  only the government is allowed to issue a license for the sale of tobacco. What is wrong with that? After all, in Sweden a state monopoly with similar or even greater powers covers the trade in alcoholic beverages.

What we have is a mosaic, many pieces of which are original Hungarian products, while others have indeed been imported from democracies abroad. However, if we look at the mosaic as a whole, the outlines of Viktor Orbán’s Hungary emerge. It is actually better to move away from the static image of a mosaic to represent the relationship between ‘part’ and ’whole’. It is not a fixed state that we have to interpret, but a dynamic process. What we have to recognize is the direction that has been followed by each small component of the machinery since the starting point in 2010. From then on, at every new change, we, the observers, must notice which direction the change has taken. In the US, the mandate of the members of the Supreme Court lasts for the rest of their lifetime. There, this regulation has emerged within the framework of a stable democratic order, with many checks and balances in operation. In Hungary, on the other hand, for the first time now the vast majority of members of the Constitutional Court were chosen by the current prime minister – and in a few years all the members, without exception, will be Viktor Orbán’s nominees. If their mandate, is being extended right now, this move, along with other similar moves, will shift the legal status of the country towards irreversible power relations. Thousands (yes, the number is no exaggeration) of discrete changes, all moving together in the same direction, create a new system. Understandably, the Budapest correspondent of a foreign newspaper might write about only one outrageous measure without putting the event into the whole context of Orban’s system. An international organization or a foreign government might be justified in protesting against a specific measure taken by the Hungarian government, and in trying to exert its influence to have this measure modified or withdrawn. This article is intended to help those who form public opinion abroad and those who plan and implement measures taken in the world outside that concern Hungary to a better understanding that more is at stake than a momentary event:  this is now a strongly forged system, whose essential properties cannot be altered by partial modifications.

Another intellectual fallacy is the faulty evaluation of the legitimacy of the Orbán government. “Although I don’t like what is taking place in Hungary, it seems to be what the Hungarians want.” This opinion is further reinforced by the official propaganda, which is busy announcing that the regime won a two-thirds majority for two successive parliamentary cycles; there is no other government in Europe that enjoys such strong support.  Yet let us take a closer look at the facts.

Kornai table
At the last election only every fourth person entitled to vote expressed the wish that Viktor Orbán and his party should govern the country. The others either voted for another political faction or expressed their weariness and disappointment in politics by abstaining. By staying away perhaps some people wished to indicate that they found the regime repellent, but they did not believe that their vote would bring about any change. Political legitimacy is not a binary variable: no government is simply either legitimate or not – but measured against the continuous scale of legitimacy, support for the Hungarian government is low. The election system itself, introduced after the change of regime, has offered the opportunity for a considerable difference between actual political support and the proportions among the representatives.[3] That gap has further widened as since the 2010 elections the electoral laws have been modified seven times; while Fidesz lost more than half a million votes, and the fraction of all eligible voters who voted for Fidesz dropped from one third to a quarter, the regime used legal tricks to maintain a proportion of deputies which is higher than the critical minimum needed to pass laws requiring a two-thirds majority.[4]

There is another intellectual trap connected to the misinterpretations that I have just mentioned; those who have fallen into it may see the Hungarian state of affairs thus: “It is true that the Fidesz regime has abolished many democratic achievements. However, the present form of government must still be considered a democracy.” At this point the debate about what we call ‘democracy’ begins. There is no consensus between academic political philosophers and political scientists. The terminology used by people who are actively engaged in politics is interwoven with elements of political rhetoric. Where the term ‘democracy’ is an honor, the status of democracy is awarded or denied to the Hungarian form of government by the journalist, political analyst, politician or diplomat according to whether they hold a favorable or an unfavorable opinion of the present Hungarian system.  The terminological confusion remains even when ‘democracy’ receives a defining attributive. The expression ‘illiberal democracy’ was originally introduced to political science with pejorative connotations, while Viktor Orbán uses the term ‘illiberal state’ with self-assured pride to describe his own system.

An apt description of the present Hungarian political system / Source 168 Óra

An apt portrait of the present Hungarian political system / Source 168 Óra

Let us look at the set of previous and present historical forms of government that have characterized recent history. In one group we find democracies. Members of the European Union before its expansion, the US, Canada, Australia, New Zealand, Switzerland and Israel surely belong to this group, and as far as this article is concerned the question of which other countries might also belong can be left open for the time being. What is sure is that the essential common features do not exist only in theoretical texts, but can actually be experienced.  ‘Checks and balances’ are not merely requirements supported by arguments put forward by political philosophers – they really do exist, and their functioning can be experienced by observation. We can say the same about respect for minority rights; there are written and unwritten limits to what the majority, however large it may be, can do against the will of the minority. We could go on listing other important common features.

In the other group we have dictatorships.  For me, and for several hundred million other people, this is no abstract theoretical concept: it is a cruel, personally experienced reality.  Thirty years ago 28 countries belonged to one kind of dictatorship: totalitarian communism.

In between the two extremes, the set of all kinds of governments includes a subset; countries which belong here are neither democracies nor dictatorships, though they bear characteristic features of both. In my own work I have joined other authors in calling them autocracies.[5] This class is made up of a colorful multitude: I would place in it the pre-war regimes of the Hungarian regent Miklós Horthy and the Polish statesman Jozef Pilsudsky, or that of the Argentinean president Juan Domingo Peron in the post-war era. In our own time, besides the Russian president Vladimir Putin, the leaders of Belarus and many Central Asian post-soviet states rule over countries which belong to this subset.

I believe that under Viktor Orbán Hungary has moved from the subset of democracies  into the subset of autocracies. I am not talking in the future tense, about the danger of the country becoming an autocracy. The move has already taken place: the change has happened.

To consider Orbán a dictator would be to misunderstand the present Hungarian situation. Hungary today has a multi-party system, opposition parties function legally, newspapers opposing the government can be published. Political opponents are not imprisoned en masse; nor are they liquidated. We know all too well what real dictatorship is; we have experienced it, and what we are experiencing now is not that. However, to believe that Orbán is the leader of a democracy, and that although he breaks the rules of democracy from time to time, in the end he still behaves like a democrat, would also be a misunderstanding.  I do not even want to raise the question of whether Orbán, in the depths of his heart, is a true democrat or not. This may be an important question for his future biographer, but it is irrelevant for our analysis. We have to investigate what has actually already happened. And what has already happened is enough for us to say that Hungary now belongs to the wide subset of autocratic countries that are “neither democracies nor dictatorships”.

It would be a mistake to believe that Orbán is copying Putin. All autocracies are built on different historical traditions; they have emerged in different domestic and international environments, and the personalities and aspirations of their highest leaders differ. Orbán is not an imitator of others, he is a self-determining personality. This does not alter the fact that both the Putin and the Orbán regimes belong to the same subset of autocracies.

Hungary is the first of the post-socialist democracies that has joined the autocracies, but there is no guarantee that it will be the only one.  The balance of power might shift in other countries in such a way as to turn them into autocracies. There are foreign politicians who see Orbán as a model; there is a real danger that this contagion, leading to the loss of democracy and of the rule of law, will spread.

5

One of the sources of Viktor Orbán’s support is the fact that many see him as the staunch defender of the sovereignty of the Hungarian state, and of Hungary’s independence.  However, anyone who wishes to understand the Hungarian situation must realize that the problem cannot be shrugged off by simply labeling Orbán as a nationalist.

Worldwide, we can see two opposing tendencies. Globalization, the internet, the technical ease with which we travel, the emergence of transnational integration are all making the world more international. At the same time, national sentiments within the boundaries of a nation-state or in communities which reach beyond national frontiers but use a common language, and share common historical traditions, still persist; indeed, they are growing ever-stronger.

The change of regime not only brought about internal revival, but also coincided with the restoration of Hungarian sovereignty. “Russians go home!” was the first slogan; a happy separation from the East, an expectant turn towards the West. Western exports and imports were becoming more and more significant. Plenty of foreign capital was flowing into the country. Hungary joined NATO in 1999, and became a member of the European Union in 2004. In both cases, the intention to join was confirmed by a referendum, and in the campaigns leading up to these all the parliamentary parties, Fidesz among them, encouraged their followers to support the move. Although counter-opinions have always been present and voiced, for twenty years the direction of changes in foreign policy remained unambiguous. Hungary must be an organic part of Europe: it must unambiguously belong to the Western world; it must further strengthen the links binding it politically, economically and culturally to the West.

The year 2010 saw a peculiar U-turn in this area as well: unambiguity has been replaced by ambiguity. This emerges mostly in the rhetoric of official statements. Leading politicians grieve at public meetings about the crisis of world-wide capitalism and Western civilization. The leaders of the regime make use of the anti-EU, anti-American atmosphere; sometimes they go as far as to compare directives from Brussels with the pre-1989 dictates of Moscow. But if yesterday there was talk of the emasculation of the West and of the great things to be expected from the East, today’s discourse will be just the opposite. Orbán is proud of his Janus-face, and considers it the sign of his political shrewdness.[6] The content and tone of the words change, depending on whether they are intended for the Party faithful or spoken in Munich or Vienna at a conference for businessmen.[7] It is hardly surprising that both followers and opponents, both Hungarian and foreign observers, are mightily confused.

In the world of foreign policy and diplomacy official or semi-official statements can carry a lot of weight. Hungary is still member of NATO and the European Union; there has never been the slightest hint of any intention to leave either body.[8] The Hungarian government is happy to receive the plentiful financial support that flows from the EU; the only thing it insists on is full control over its distribution. (We have already mentioned the real motivating forces and intentions which govern state allocations.) At the same time the representatives of the ruling political regime regularly support Euroskeptic declarations.

The Hungarian diplomatic corps resolutely attempts (without much success) to establish business relations with various Asian autocracies and dictatorships, from Azerbaijan, Kazakhstan, Uzbekistan and the Arab Sheikdoms to Vietnam and China, pointing out that other countries do the same. This is purely about business; taking a stand for democracy and human rights is another issue. But they sometimes ’rise above’ this point: recently Orbán called Azerbaijan a “model state” when its dictator was on an official visit to Budapest.

Understandably, other countries take the keenest interest in Hungarian-Russian relations. As we noted earlier, the present Hungarian and Russian forms of government share several features; in this respect both regimes belong to the same subset of autocracies. But now we are not focusing on this similarity, but on the economic connections and relations in foreign affairs between tiny Hungary and huge Russia. In this relationship, how far can the sovereignty of Hungary be maintained; to what degree is it committed now and for the future to its Russian partner? The corollary is another question: how far do these present tendencies endanger Hungary’s commitment to the European Union, to NATO, to the Western world?

In order to be able to answer the question, we would need, for example, to know more of the conditions under which in January 2014 the Hungarian and Russian governments reached an agreement over the expansion of the largest Hungarian power plant, the Paks nuclear power station. I am not in a position to judge whether this large-scale expansion of Hungarian nuclear power capacity is justified, and if it is, whether the Russian proposal was the most advantageous in technical, financial and geopolitical terms of the possible alternatives.  What many people in Hungary and abroad object to, and with good reason, is the way in which the decision was brought. It was not preceded by public debate among experts; the government’s plans were pushed through the parliamentary law factory without the least publicity.  In this crucial issue, which will have a deep impact on the lives of many future generations, on European integration, on the foreign affairs of the country, on its commitments to its allies, the government confronted the public with a fait accompli.

Reflecting on the relationship between Hungary and other countries, the following question must be considered: what can Hungarians who worry about the U-turn, who fear for democracy, for the rule of law and for human rights expect from their foreign friends? A new development may be followed by cries of: “the West won’t put up with any more of this”. I am afraid many people nourish false hopes. The learning process is painfully slow; it takes years for foreign observers to realize there is anything wrong, and even longer before they put the different elements of the phenomenon into the right context.  And comprehension is only the beginning, what else is also needed if recognition is to be followed by some kind of action? This is a task that international organizations are not used to; they are at loss as to how an allied state can be forced to abide by the rules of democracy. Not many means are available. The European Union is unprepared for a situation where one of its members keeps turning against the value system and formal and informal norms of its community. And let us not forget that Hungary is only one small point on the map of the world; conflicting interests influence the motion of political forces. The special interests of countries, political groups, social classes and professions pull the main actors in many different directions. Threatening situations more important than the Hungarian one have proved impossible to solve reassuringly by peaceful agreements.

6

I have left the survey of the changes which have taken place in the ’ideological sphere’ to the end. A fundamental characteristic of communist dictatorship is the existence of an ‘official ideology’. The roots of its ideological history go back to Marx and Lenin, its terminology comes from the language of Marxist-Leninist party seminars. The communist party kept it up-to-date, and adapted it to the propaganda needs of whichever party line prevailed at the time. The citizen, especially the ‘cadre’ with a role in the system, was obliged to accept the ideology; he had to articulate it both verbally and in writing.

Following the fall of the old regime, the same main direction of change unfolded in this sphere too: the dominance of ‘official ideology’ was replaced by pluralism in the ideological world. Compared to this main tendency, we can observe a U-turn here too. The government strives to limit and discredit the principle of pluralism. It tries to force on society those theories, beliefs and norms of behavior that it considers the only acceptable dogma.

First of all, it vigorously established institutions which promote the execution of the central will. For the world of artists, pluralism and diversity are essential elements. Accordingly, in free societies many kinds of associations and unions, schools and groups coexist side by side, competing or even fighting with each other. The regime which seized power in 2010 selected a small group and invested it with powers that would be unimaginable in the West. Their main organization is the Hungarian Academy of Arts (Magyar Művészeti Akadémia). Other organizations and groups do still exist, but the name of this privileged body appears even in the constitution. It was given one of the most beautiful palaces in the capital as its headquarters, and made responsible for distributing the majority of publicly-funded cultural grants, as well as most awards and marks of recognition which come with financial rewards.

In the scientific world, the situation is similar. The Hungarian Academy of Sciences boasts a long history, and though its independence was severely curtailed by the party state under communism, its autonomy strengthened after the change of regime. It used to exercise considerable influence over decisions about which research projects should be funded by the state, through an institution which, like the American National Science Foundation, relied on expert opinion. Now, however, centralization has taken place here too. The National Innovation Office (Nemzeti Kutatási, Fejlesztési és Innovációs Hivatal), a leading state organization, was established. The Academy and other scientific organizations might try to express their opinion before final decisions are taken, but the days of a decentralized, professional and civil approach to funding allocations are over – the president of the office has sovereign decision-making powers. And who is that president? None other than the minister of education from the first Orbán government.

Turning to the sphere of education: the change of regime made the emergence of a real text-book market possible. The writers and publishers of school books could compete with each other; schools, or even individual teachers, could decide which books to use. Right now, competition is being abolished here too: a mammoth state text-book publishing house has been set up and granted what is effectively a near-monopoly.

What ideas is this increasingly centralized, nationalized, standardized machinery trying to promote? A return to the past is perceptible here too; not to the previous regime with its Marxist-Leninist ideology, but to an earlier ideological past. The official ideas of the pre-1945 Horthy period are being revived in various forms, with increasing strength. It is impossible to describe these with a handful of concise expressions such as nationalism, chauvinism, ethnic or religious prejudice or a conservative view of the family, because they appear in a variety of shades. Official politicians never make open and extreme declarations that would offend the ears of the civilized world; there are, rather, many covert hints and indirect expressions. But in that muted music, the marching tune for boots tramping out the same rhythm can be heard. To the ears of my generation the sound is familiar and frightening.

The images of cultural and academic life and of the world of ideas that I have highlighted here dovetail with the general description of the present-day Hungarian system, which was summarized in an earlier section of this article.  This sphere too bears the mark of an in-between state that is ‘neither democracy nor dictatorship’. The regime is trying to encroach in an increasingly aggressive fashion. Luckily there are large numbers of writers, poets, musicians, film-makers, artists, scientists, teachers and free-thinking intellectuals who will not allow themselves either to be intimidated or to be bought by money and rewards, and who protect their intellectual autonomy. Any visitor to Hungary can testify that intellectual life is thriving: great artistic works are born and significant scientific advances are made.

7

When I was giving lectures in the USA on a delicate and complicated situation, during the post-socialist transition, I was always asked the question: what should be done? What can we do? I admire and respect this readiness to act, but it is not my task to answer the question. My paper solely aims at revealing the situation; I wished to contribute to our American and other foreign friends’ better understanding of the Hungarian scenario.

What does the future hold for Hungary? One of the theories of democracy, linked mainly to the name of Joseph Schumpeter, deserves close attention. It does not dwell on how far a certain form of government expresses the ‘will of the people’, or at least of the majority. It considers democracy primarily as a procedure which enables the people to get rid of a government, not through the murder of a tyrant, not through conspiracy, military coup d’etat or a bloody popular uprising, but in a peaceful and civilized way, through elections which are well defined in legal terms, with many competing parties. The feasibility of dismissal is not a sufficient condition for a viable democracy, but it is a necessary one: it is the minimum condition.

It will be some time before we can say for sure whether this minimum condition is met or not. In Sweden it took forty years before the social-democratic government was dismissed at the 1976 elections. In Britain the conservative party ruled for eighteen years, from 1979 to 1997, before it was voted out of office. The historians of the future will give a final answer to the question of whether the minimum conditions of democracy are met in Hungary or not. However, many things are already clear.

Viktor Orbán and his party have ‘cemented themselves in’  – to translate an expression which has become commonplace in Hungary. The repeated modifications made to election laws were intended to favor a Fidesz victory, or rather, to make it an absolute certainty.  Should the need arise, the laws can be further modified without any hindrance. Fidesz was prepared for the unlikely but not impossible event of its failing to win a parliamentary majority at the elections. The mandates of many key positions, most importantly that of the chief prosecutor, the president of the republic, the head of the central bank, of the audit office and of the judicial office, extend beyond the current parliamentary cycle; they can all sit tight , even if the opposition wins. The Fiscal Council, a body appointed by the present government, but which would remain in office even in case of an election defeat, has not only an advisory role but also the right of veto over the budget submitted by a new government, and if that veto is used, the president of the republic may dissolve the parliament and call for new elections. In other words a few hand-picked men loyal to the present government would be able to overturn the next government.

All of this leads to the logical conclusion that it would probably be extremely difficult to effectively dismiss the government at parliamentary elections. In this sense, the situation that has emerged is nearly irreversible. Historical experience shows that an autocracy can only be brought down by an ‘earthquake’ that rocks the very foundations of the system.

Other future scenarios are also possible. The great events of history cannot be predicted on the basis of mathematical probabilities; every constellation is unique and unrepeatable. The situation could turn out a lot worse than today. The present Fidesz autocracy could react to the growing protests by hardening the repression. Or another way of events is also possible. Jobbik, the party of the extreme right, already represents a significant force; in more than one city its candidates have been elected as mayors. They speak undisturbed in parliament and in the street. What would happen if in a future election Fidesz did not manage to win a parliamentary majority? Would they be prepared to make a coalition with the extreme right? There is a historical precedent: towards the end of the Weimar republic the moderate right-wing conservative party entered into a coalition with Hitler’s party; together they constituted a parliamentary majority.

At the same time, favorable scenarios are not impossible either. What if more moderate groups within the ruling party are getting the upper hand, who are ready to stop on  the wrong track and turn back, in the direction to democracy and the rule of law? What if the opposition pulls itself together? What if new political movements emerge and win over millions? What if somehow, in spite of an electoral system which almost guarantees the defeat of future democratic forces, the tables turn?

Let us not give up hope.

—–

The printed text here contains very few footnotes. Further footnotes as well as a list of sources on the topic, in both English and Hungarian, will be available in a Web version of this article, available on the authors website: www.kornai-janos.hu.

[1] A few months after Fidesz took over the government I wrote an article entitled “Taking Stock”(“Számvetés”), which gave a summative overview of the main characteristics of the changes that had already taken place and which could be expected. Two volumes in Hungarian, edited by Bálint Magyar, were published under the title The Hungarian Polyp – The Post-Communist Mafia State.

The text here contains very few footnotes. Further footnotes as well as a list of sources on the topic, in both English and Hungarian, will be available in a later Web version of this article.

[2] The spectacular new projects inaugurated with pompous ceremonies by political leaders are mostly financed by European Union funds or are established by multinational companies.

[3] About half of the seats are divided among the parties in direct relation to the proportion of the votes. The other half are allocated in every constituency following the ‘winner takes all’ or ‘first past the post’ principle best known in the British system. That secures a large number of seats for a party which has even a small relative advantage over their rivals in several districts.

[4] Compare these figures with German data from 2013. The CDU/CSU received 29.7 per cent of the vote (41.5 per cent of those eligible actually voted). This is only slightly lower than the Fidesz results. But the actual proportions of votes are represented by parliamentary proportions in the Bundestag. Thus, Merkel did not have a majority, and a coalition with the Social Democrats is governing that country.

[5] In the related debates in Hungary, referring mostly to international sources, diverse terms have been in use, for example, ’managed democracy’, ’Führer-democracy’, or ‘elected despotism’.

[6] Viktor Orbán said the following in 2012: “There is a dance routine in international diplomacy. This dance, this peacock dance … has to be performed as if we wanted to be friendly. These are, let’s say, exercises in the art of diplomacy. … So we accept two or three out of seven proposals, those two or three that we have followed already, except they didn’t notice, and we reject the remaining two we didn’t want, saying ‘C’mon, we have accepted the other ones.’ This is a complicated game. Unless you insist, I’d rather refrain from entertaining you with the beauty of the details.”

[7] A characteristic scene of the ’peacock dance’ is the duplicity shown by Fidesz and the government towards Jews. More than once the government has emphatically  declared that it will not tolerate anti-semitism, and if necessary it will defend its Jewish citizens against any kind of attack. At the same time several government measures gravely profane the painful historical memories of Hungarian Jews. For example, it is falsely suggested in various ways that the deportation of hundreds of thousands of Hungarian Jews was forcibly imposed by Nazi Germany, while in fact Horthy’s state machinery was actively involved in it.

[8] A noteworthy exception: the Speaker of the parliament, a Fidesz member, at one point publicly referred to the possibility of ”backing out” of the EU.

Thoughts in advance of the German and Russian visits to Budapest

Yesterday the Neue Zürcher Zeitung published an article about the forthcoming visits of Angela Merkel and Vladimir Putin to Budapest titled “Orbans Tanz auf zwei Hochzeiten,” indicating that Viktor Orbán will be able to have his cake and eat it too. He will remain a member in good standing of the European Union and will be a close friend of Russia at the same time. I, on the other hand, maintain that he will not be able to pull off that extraordinary feat. There are many signs that the Hungarian prime minister is already in retreat.

Let’s start with the Merkel visit. Hungarian and foreign observers have come up with all sorts of explanations for her trip, starting with the simplest one–that she could no longer postpone it. After all, she has not visited the Hungarian capital in the last five years, ever since Viktor Orbán’s Fidesz, which professes to be a Christian Democratic party, won a stunning victory in 2010. Her last trip took place in 2009, on the twentieth anniversary of the Hungarian opening of the Austro-Hungarian border for East German refugees, when the socialist-liberal government of Gordon Bajnai was still in power. If the purpose of the trip was to have a serious discussion about the Russian-Ukrainian crisis and Hungary’s role in it, Merkel’s five-hour stay, with very little face time with Viktor Orbán, would not suffice. She is coming because she promised to and because, according to a 1992 agreement between Hungary and Germany, she has to.

There are analysts who are convinced that Angela Merkel will not even mention the erosion of Hungarian democracy under Viktor Orbán’s regime, the systematic transformation of a fledgling democracy into an autocratic regime akin to the political setup that existed in Hungary between the two world wars. She has more pressing issues on her agenda: Greece, the sanctions against Russia, and the growth of the German anti-immigration movement–PEGIDA (Patriotische Europäer gegen die Islamisierung des Abendlandes / Patriotic Europeans Against the Islamization of the West), especially popular in the former East Germany. It is unlikely that Merkel will waste any time on the woes of Hungarian democracy. Her only aim is to make sure that Viktor Orbán stands by the extension of the sanctions. This hypothesis, in part at least, is outdated: Hungary obediently voted for the extension on January 29.

Others are more optimistic. They maintain that the trouble with Angela Merkel’s visit is that it seems to put a stamp of approval on the illiberal regime of Viktor Orbán. This is certainly how the Orbán government is portraying it. If Merkel says nothing about the state of democracy in Hungary, Orbán’s regime scores a victory. There is pressure on Merkel at home, however, to do something about the Hungarian situation. She has to give the appearance that her visit is something of a warning to Viktor Orbán.

There is some truth in this interpretation. In fact, there are signs that behind the scenes some “disciplinary measures” have already taken place. The successful negotiations with the leaders of  the RTL Group indicate that Orbán got the message: there will be consequences if the Hungarian government blatantly and illegally discriminates against a media outlet just because it doesn’t like RTL’s news broadcast. Orbán caved, and I for one am certain that he didn’t get much in return. I find it interesting that the official announcement of Merkel’s visit occurred very late, on January 28, the day when according to Népszava‘s information the Hungarian government agreed to a substantial reduction in the enormous tax it had levied on RTL Klub. Was this agreement the price, or part of the price, of Merkel’s visit?

Because that’s not all. In his regular Friday morning interview Orbán announced that the exorbitant tax levies on the banking sector will most likely be gradually reduced because the Hungarian economy has greatly improved. “If possible, the interests of the country and the businessmen must be reconciled,” said the man who until now had laid all the financial burdens of his erroneous economic policies on businesses, especially foreign ones.

There might be several reasons for Orbán’s cooperation in addition to German negotiations. One is that the Americans undoubtedly know more about the Hungarian mafia state and Viktor Orbán’s role in it than they let on, but the Hungarian prime minister doesn’t know how much they know. That must be a powerful incentive to stick with the countries that provide Hungary with economic aid and military shelter. Another consideration might be the effect of the sanctions and the sinking price of oil on the Russian economy, which makes close ties with Putin’s Russia a less desirable option than, let’s say, a year ago.

And that leads us to the Putin visit on February 17. It was almost a year ago, in March of 2014, that the United States and the European Union began applying sanctions against Russia. Although Hungary agreed to support the move, in August Viktor Orbán declared that “Europe shot itself in the foot,” meaning that the sanctions actually hurt only the West and did nothing to weaken the Russian economy. Just about this time, however, oil prices began falling. The combination of sanctions and falling energy prices has made the Russian economic situation close to desperate by now.

Orbán was initially very proud of what he considered to be the crowning achievements of his Russia policy: the Southern Stream, which would have brought gas to Hungary circumventing Ukraine, and the Russian loan for the extension of the Paks Nuclear Power Plant. Since then, Russia abandoned the Southern Stream project because of lack of funds, and many people think that the much heralded Paks deal is also in trouble. Thus, the rationale for close relations with Russia has more or less evaporated, which leaves Viktor Orbán in the unenviable position of suffering the ill effects of his overly cozy relation with Putin while reaping practically no benefits.

Depiction of the Trojan Horse at the Schlilemann Museum in Akershagen, Germany

Depiction of the Trojan Horse at the Schliemann Museum in Akershagen, Germany

Under these circumstances I doubt that the initiative for the Putin visit came from Budapest. It is no longer to Orbán’s benefit to make a lavish display of friendship with Russia. And indeed, the government is trying to downplay the importance of Putin’s visit, noting that it is only a working trip and not a state visit with the usual fanfare. For Putin, by contrast, it is an important trip at a time when nobody wants to have anything to do with him. Just think of the humiliation he suffered in Brisbane, Australia. He wants to demonstrate that he has at least one good friend  in the European Union.

Putin’s second reason for the trip, I suspect along with others, is to find out how much he can rely on Viktor Orbán. Will he deliver as promised? Or it was just talk? Perhaps Orbán oversold his usefulness to Putin and is turning out to be a useless ally from the Russian point of view. Last August Jan-Werner Müller wrote an article in Foreign Affairs titled “Moscow’s Trojan Horse: In Europe’s Ideological War, Hungary Picks Putinism.” Well, the Trojan Horse may be just an empty shell and the damage it can cause within the European Union little to none.