Tag Archives: environment

Gábor Szabó: The Media in Hungary – The Example of Environmental Journalism

As always, Hungarian Spectrum welcomes democratic voices from and about Hungary. Today Gábor Szabó, a well-known Hungarian environmental journalist, summarizes the experiences he gathered during his 37 years of work in this field. While the article describes the changes in the situation of environmental journalism, it reflects very well the tragic deterioration of the conditions for free media in all fields in Hungary. Gábor Szabó wrote this article at the request of the Hungarian NGO Clean Air Action Group (Levegő Munkacsoport).

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Under the old (Socialist) regime, between 1948 and 1990, the official standpoint was that the development of the economy and raising of living standards comes first, and “when we can afford” (in Communism?) we will protect the environment (in spite of the fact that environmental pollution had a detrimental effect on the quality of life). Facts about environmental pollution had to be hidden from the public. Hence environmental journalism was the least desired by the authorities, and articles about health damaging pollution cases practically did not exist until the 1980s.

Then, as the Socialist era began to collapse, it turned out that there were too many skeletons in the closet. As the limits for press got looser, more and more hidden facts came to daylight. Still, revealing a pollution case was automatically an anti-government action, not because the author was a revolutionary or an anti-communist but because it was the officials who let state-owned enterprises compromise people’s health. What else could show more evidently the inhumanity of the system? (In which it was declared that the most important value was the health of the working class.)

So it was quite natural that those practicing environmental journalism – beginning to flourish by the end of the 1980s – closely cooperated with civil society organisations (which until 1990 were informal groups, as they could not be registered officially). The latter gradually gained ground by the end of the Socialist era. Bad ambient air quality in the inner districts of Budapest brought thousands to demonstrate, the planned joint Hungarian-Czechoslovakian giga-investment of regulating the natural flow of the Danube river by an enormous dam led tens of thousands to the streets. Rising environmental awareness gave ammunition for the opposition. In other words: environmental issues were in focus when the old era collapsed.

After the collapse of the one-party system new environmental bodies were set up, new programs started and the NGOs gained numerous legal opportunities to have a say in legislation and control in their closer and often even their wider environment. Journalists had relatively good opportunities to report on environmental issues. Even so it took 5 years, till a new Environmental Law (Act 53 of 1995) was adopted by the Parliament. Meanwhile a relatively powerful ministry of environment was set up; powerful, among others, thanks to the competent environmental inspectorates. In contrast to the situation in the old times, now it was already possible to obtain relevant data, and quite often with the active assistance of the environmental authorities! Instead of “fighting” against them, a spirit of cooperation prevailed. It was a golden age for environmental journalism.

Just one example of the openness of those times: with the help of the Central Environmental Inspectorate in 1995, I was able to publish data about the ten companies emitting the largest quantity of air pollutants, the ten companies emitting the largest quantity of water pollutants, as well as the ten biggest hazardous waste producers, i.e. an unprecedented list of polluters.

Shortly after this action the head of the Inspectorate reaped the reward for his openness (not only to my request) – he had to leave his office. This was a clear sign, that almost immediately after the genie was let out of the bottle, a creeping regression started. The above-mentioned Law on Environment originally set practically no limits to the citizens’ right to know environmental facts. Moreover, the group of stakeholders was defined broad enough to let local residents, NGOs to take an active part in the process of granting environmental permits. No doubt, huge investments could be delayed this way even by a tiny group of grassroots environmentalists, but on the other side no polluting activity could easily be rammed down the throat of a local community.

The regression came, when the text of the Law was changed. Originally it said (§ 12): “Everyone has the right to know environmental facts and data, in particular the state of the environment, the degree of environmental pollution, the environmental protection activities and the effects of the state of environment on human health.” After 2005 it said the following (same para): “Everyone has the right to know the environmental information specified in separate legislation as public interest data.” (My translation. G. Sz.) Short sentence, but with two restrictions on open access to environmental data:

1) The “separate legislation” at present is Act 112 of 2011 (earlier it was Act 63 of 1992). This law gave rise to highly bureaucratic processes, and so obtaining the desired data can take months. (The questioner has to submit a form to the Information Authority, unlike in the original 1992 version, where the petition went directly to the environmental – or health – authorities.)

2) Since 2011 the questioner has to pay for the data and the authorities often use this possibility as a weapon against citizens and NGOs, grossly overcharging them. Some court cases started to clear the way for gaining back the citizens’ right to know public information, but the battle is far from being over.

Furthermore, according government decree 305/2005 certain types of information are to be published on official websites, including for example the decisions of environmental inspectorates, and the Central Inspectorate (which is the second instance as well). Government decree 311/2005 makes it compulsory to publish various environmental data. But practically no essential information is published, or, if any, it is not possible to search in the database, let alone to search archive files.

The above mentioned changes made it year after year harder and harder for journalists to obtain hard facts on environmental issues. The toughest period came after 2010, when the right-conservative government introduced the so called Regime of National Cooperation. As almost all government declarations, this formulation means the opposite in everyday practice: new laws and institutional systems are suddenly introduced, and “sold” to the public as a general wish, without consulting the interested and affected parties. The first radical change came in 2010, when the ruling parties changed the system of ministries and the Ministry of Environment deceased. Its tasks were taken over by the Ministry for Rural Affairs, wherein a State Secretariat for Environmental Affairs was set up, with limited power.

The second big change occurred in 2015, when even the environmental inspectorates disappeared. The ten – till 2012 twelve – watershed-based inspectorates merged into the 19 county offices of the government, becoming a department of them each. The consequence for journalists is that inquiries are to be submitted to the county office, and all direct contacts with the environmental authorities had been cut. It is hard to get rid of the feeling, that an essential reason for this organisational change was just that: the farther the press is from the sources of information, the better. When I tried to make a strictly background interview with my old contact person working now in a county office, she said: “Do me the favour, please, erase my handy number from your list and never again call me on this phone. Ask rather the press officer or my boss.” That I did for a while, but no press officer at any government body gave ever a usable answer. Concerning the bosses, they have also lost their right to direct contact with journalists. (An apparent sign of this is the everyday routine formula of the press: “till our deadline we couldn’t get the answer from the responsible persons”.)

Another method of depriving the power of environmental regulations was invented 11 years after the Law on Environment was adopted, and the related new law, symbolically enough, had the same numbering. Act 53 of 2006 made it possible to introduce thousands of exceptions to the general rules. The so-called priority investments (“investments of outstanding importance for the national economy”) get the needed permits from the authorities more smoothly, quickly, no niggling is allowed. To pave the way for these “absolutely important” investments, permits at the first instance are to be granted in extra short time, the competent authority is assigned by the government, and the right of stakeholders is limited. A bright example of this practice is the permit for cutting out 286 trees around the Parliament in 2012. There was no way to appeal against it, the fourth day of the permit saw the execution of the ruling. Four months later the ombudsman declared his serious concerns about granting the permit. This had no legal consequence, and today the square at the Parliament is a stone desert, one of the hottest climate-islands of Budapest as a conspicuous example of environmental legislation in practice.

At present practically any investment can be declared priority investment: a kosher plastic greenhouse, a meat factory, enlargement of a police station, a test track for cars, the investments to commemorate a famous Hungarian poet in the municipality of Nagykőrös, several processing plants, various sport centres, development of a horse breeding farm, development of various industrial zones, building a new campus of the Sports University, building a new high school, refurbishment of the State Opera, building a new wing at the Buda Castle, upgrading several stadiums, building of new stadiums, erecting a fence at the Hungarian-Serbian borderline (thus killing out almost all of the highly endangered endemic mole-rat, Spalax sp.), setting up a Museum at an unused railway station, permitting new devices to combat hail at rural districts, a real estate development in South Buda at the Danube bank (the area belongs to a friend of the Prime Minister) – to mention just a few of the 2 cases in 2006, 1 in 2007, 5 in 2008, 4 in 2009, 4 in 2010, 8 in 2011, 13 in 2012, 30 in 2013, 32 in 2014, 44 in 2015, 50 in 2016, and 25 in 2017 (till May 2). Thus, granting the status of priority investment is already not an exception, rather the rule itself.

It is also not rare that a law on a priority investment annuls important provisions of other laws. For example, the government (actually, rather the Prime Minister) decided to relocate several museums to the City Park (Városliget), a popular green area of Budapest, destroying a large part of this popular green area of Budapest. (The relocation became “necessary” because the Prime Minister wants to move his office to the Castle Hill, 70 meters above the Parliament.) To pave the way for eating up the green area, the Parliament adopted a law which says: concerning this priority investment the regulations on spatial planning in Budapest are void.

As a result of declaring so many investments “priority investment”, the environmental and other authorities generally decline to answer in essence to the questions and comments of journalists, stating that it is the law which requires them to implement the investment at all and in the way prescribed.

To pave the way for investors, other rules have been significantly eased by other methods as well. In contrast to the earlier regulations, today getting a permit for erecting a building is in most cases just the applicant’s and the respective authority’s business, neighbours in most cases have lost their right to be handled as clients according to the Government decree 482/2016 (replacing decree 155/2016). One usually even doesn’t need a permit, there is just an obligation to officially report the planned construction activity in advance.

Protection of the built national heritage disappeared since the annihilation of the Heritage Protection Authority in 2012. Its tasks were partly taken over by an office, but this office also deceased in 2016. There is no existing heritage protection authority. Concerning natural heritage the situation is similar. National Parks have no administrative rights in this respect, and the county offices lack professional knowledge. These changes serve nothing else than creating a favorable legal environment for various investments considered useful by the government or by those, who stand close to the government. This also makes it practically impossible for a journalist to get any information from state sources on the investment concerned.

As a consequence of all these changes, not much space was left for environmental journalists. The harder it was to get information on environmental issues, the less transparent the environmental administration was, the more diminished the group of environmental journalists. The Society of Environmental Journalists, established in 1997, ceased to exist. Press organs changed their policies as well: environmental issues have appeared more and more rarely in the mainstream media. As a logical consequence, at present there are not more than half a dozen of journalists who still possess the professional skills of environmental journalism.

July 3, 2017

 

The plight of a Budapest city park

In the last few days the Hungarian media has been full of stories about clashes among three groups in Budapest’s famed park Városliget (City Grove): the so-called “grove defenders” (ligetvédők), members of a private security firm recruited from skinheads hanging around football stadiums to protect the demolition/construction crew, and the Hungarian police.

Városliget is one of the oldest city parks in the world, dating to around 1810, although work on it continued through most of the nineteenth century. By now Városliget definitely needs a face-lift to restore it to its former beauty. But what’s going on right now, in the opinion of the grove defenders, is the destruction of the park as a public space for recreation as well as a source of respite from all the stone and brick that makes up Budapest, especially its Pest half. It is being turned into a “museum quarters.”

Viktor Orbán, most likely at the suggestion of the director of the Museum of Fine Arts, László Baán, decided on the creation of a museum quarters. But the idea of clustering museums was in reality just attractive packaging of what amounted to an eviction notice. Several galleries currently housed in the former royal palace must move because Viktor Orbán wants to put the core of his government where in his opinion it belongs, the ancient seat of the Kingdom of Hungary.

And so the Castle District will become the prime minister’s domain and the city park will be turned into the site of some hideous architectural reproductions. Miklós Gáspár Tamás (TGM) put it this way: “Everybody knows what is happening in Városliget. An uneducated, nouveau riche, parvenu political right wants to pay tribute to the sanctified memory of the House of Habsburg, but they must be satisfied with a third-rate fake of the days of Horthy.”

Indeed, billions of forints will be spent and thousands of trees will have to be cut down to create this absolutely unnecessary project to which, on top of everything else, the people of Budapest strongly object. In February Ipsos, a Hungarian polling company, posed several questions, all concerning the future of the Castle District and the fate of Városliget. The overwhelming majority opted for the renovation of the park and against erecting new buildings within the park. In fact, 85% of those surveyed wanted to have more parks in Pest and thought that another park could be fashioned out of the region lying behind the Western Station. A proposal to hold a referendum on the question was turned down by the Kúria, Hungary’s highest court. By now it should be clear to everyone that a referendum can be held in Hungary only if it is in the interest of the government. And surely, given public sentiment in Budapest, the results would have put an end to Viktor Orbán’s dreams.

Who are the “grove defenders”? As far as I can ascertain, we are talking about a group of 40 or 50 people who decided on March 17 to occupy a part of the park where one of the existing buildings is to be razed and a modern building, House of Hungarian Music, designed by the Japanese architect Suo Fujimoto, is to be erected. Ever since mid-March there has always been a small group of people on site to make sure that no demolition work can begin. They are a varied lot. There are environmentalists who chain themselves to trees. There are urban planners and architects who have grave reservations about the kind of “restoration” the Orbán government has in mind, at least in the case of two of the buildings: the Hungarian Museum of Engineering and Transportation and the Városliget Színház.

The Városliget Színház, built in 1874, was razed in 1952. Looking at an old photo of it, I see no particular reason to rebuild it, which is not in accordance with acceptable restoration practices in the first place.

The Városligeti Szinház

The Városligeti Szinház

The Museum of Transportation, which was heavily damaged during World War II, was restored in a truncated form sometime in the 1950s. The government plans to raze the building and rebuild the horrendous original.

The original Museum of Transportation

The original Museum of Transportation

It will not be any better

It will not look any better

Although the majority of Budapesters object to the whole project, very few have been ready to keep vigil at the park to keep the demolishing crew of Bont-Tör Zrt. (Wrecking and Breaking Co.) away from the old museum building. But those who did were not ready to move, and it was almost inevitable that sooner or later there would be a showdown with the company’s private security contingent. In the end even the police decided to enter the fray.

The grove defenders maintain that the private security forces and the police work together. Eventually some of the demonstrators managed to get to the building and chained themselves to the iron bars on the windows, from where the police eventually moved them one by one. About thirty people were removed in this fashion. In the scuffle some of the demonstrators were injured. For example, Imre Mécs (82), a hero of the 1956 Revolution, was knocked over.

The most spectacular event of Wednesday was the ascent of Gergely Komáromy, the leader of a reggae band and one of the grove defenders, to the very top of the chimney of the building. After spending a few hours there, he eventually came down on his own. The police immediately handcuffed him, forced him into a car, and took him to a rehab center. The story from here on is murky. The police’s story doesn’t jibe with his own.

Gergely Komáromy on the top of the chimney

Gergely Komáromy on top of the chimney

Meanwhile, the skinhead security guards had lost patience with the demonstration. When Komáromy again climbed to the top of the roof yesterday, he was followed by three or four guards, one of whom hit him in the pit of his stomach. He collapsed. This time he was taken to the hospital by ambulance. The security guards denied any wrongdoing, but since then a video taken by a smartphone emerged on which one can clearly see the blow. Judging from the short video, I’m not surprised that, as Komáromy told reporters after his release from the hospital, he felt in mortal danger atop that building surrounded by muscle-bound skinheads. As one of the reporters of Index wrote tonight, just watching the video is a harrowing experience, and what is especially upsetting is that the police officers who were present didn’t move a finger. The work must go on because Viktor Orbán is intent on moving to the Castle.

July 1, 2016

The war between the Hungarian government and the NGOs continues

I’m sure that most readers of Hungarian Spectrum are familiar with the tug-of-war between the Norwegian and the Hungarian governments over the disbursement of the Norwegian Civic Funds. These funds are specifically designed to support non-governmental organizations that are involved with issues like democracy and human rights, gender and equal opportunity, youth and children’s issues, the environment, basic services to vulnerable groups, and the empowerment of minority groups, including the Roma. These issues are not exactly high on the priority list of authoritarian governments like the present one in Hungary. Hence the Hungarian government’s harassment of NGOs.

It was about a year ago, right after the election, that attacks on the Hungarian distributors of these funds began. Since that time I wrote three or four posts on the ups-and-downs of the negotiations between János Lázár, the minister in charge of the prime minister’s office, and Vidar Helgesen, the minister in charge of European affairs in the Norwegian government. The Norwegians, unlike officials of the European Union, have refused to cave in to Hungarian demands.

Why did I decide to return to the topic of the Norwegian Civic Funds? Because in the last three months two different independent firms looked over the Hungarian NGOs that are in charge of disbursement and found everything in order. The first firm the Norwegian government hired, Creda Consultinggave high marks to the consortium that handled the disbursement of the funds. It was praised for its “most innovative elements among the 15 NGO programs assessed across Europe.” I’m sure that Creda’s praise for “Ökotárs,” the fund operator, didn’t impress the Hungarian government, which over the last year came up with charges against it–“one for every season,” as Veronika Móra, director of Ökortárs, put it in a recent op/ed article in HVG.

In January the Norwegian government asked the accounting firm PKF Littlejohn to take a look at Ökotárs’s books because, among other things, the Hungarian government accused it of embezzlement. PKF Littlejohn found no evidence of any wrongdoing. Moreover, the accountants didn’t just look at the fund operator’s financial dealings; they also checked on the activities of several recipients of the funds. They didn’t run into any major problems.

After receiving the final results, the Norwegian foreign ministry announced that “Norway stands ready for a dialogue.” The question is whether the Hungarian government is willing to engage in such a conversation. One would think that after two independent expert assessments, the Hungarian government would give up and not risk losing the substantial amount of money the Hungarian government itself receives from the Norway Funds. But I’m not at all sure that the government in Budapest will retreat any time soon. I assume that Norway is satisfied with the way their funds are being dispersed to the NGOs and that a dialogue with János Lázár on this topic would not be a bargaining session. For Lázár to accept the current arrangement would mean defeat for the Hungarian government.

Veronika Móra in her op/ed piece rightly pointed out that the attack on Ökotárs and the Norway Civic Fund is only part of a general assault against NGOs in general. They are the victims of “a deliberate political strategy” aimed at their elimination. Viktor Orbán in his infamous speech that included a reference to “illiberal democracy” called NGOs “paid political activists.” Of course, there are “good NGOs,” those that are involved only in charitable activities. By definition, the Norwegian Civic Fund belongs to the “bad NGO” category. All of the targeted areas defined by the managers of the fund involve public policy. Lázár at one point accused the Norwegian government of deliberately trying to topple the Hungarian government. A few months later Orbán in an interview with Bloomberg talked about registering NGOs that receive funds from abroad. Just the kind of procedure Vladimir Putin introduced.

Normally, after a while, the Hungarian government retires from direct fights of this sort. For example, lately neither Lázár nor his assistant undersecretary, Nándor Csepreghy, speaks about the NGO issue. They assigned the job to the leaders of their own creation CÖF (Civil Összefogás Fórum/Civic Collaboration Forum), the group that organized the pro-government marches every time Viktor Orbán felt that he needed a show of force for his political survival. Although the leaders of CÖF hotly deny it, the organization is most likely financed by the Hungarian government.

CÖF’s “legal adviser,” Zoltán Lomniczi, Jr., who calls himself a “constitutional expert,” is now the designated spokesman for the government strategy. He is being touted as “one of the most eminent experts” on the subject. According to him, four-fifths of Hungarian NGOs are financed in whole or in part by George Soros. As for the causes these NGOs are involved in–the Roma, drug prevention, and the disabled, according to Lomniczi these are not the most burning issues in today’s Hungary. “The defense of mental hygiene” as a result of the negative influence of the media or the “disfranchisement of Hungarians” in Slovakia or in Serbia are causes that deserve attention. The “eminent expert” accused the Hungarian equivalent of the American Civil Liberties Union, TASZ, of not raising its voice at the time of the police attack on “innocent demonstrators” in 2006 October. In fact, it was TASZ who took up the defense of those who were the victims of unnecessary force.

Zoltán Lomniczi, Jr. listening to Veronika Móra at ATV's program, Csatt

Zoltán Lomniczi, Jr. listening to Veronika Móra on ATV’s program “Csatt”

Lomniczi’s recent preoccupation with NGOs prompted Egon Rónai of ATV to invite him and three other NGO leaders for a conversation on a program called “Csatt.” Veronika Móra represented Ökotárs and Miklós Ligeti, Transparency International. András Székely, an economist and teacher of religion, spoke on behalf of the “Három Királyfi és Három Királylány Mozgalom” (three princes and three princesses movement). The movement’s aim is to promote a higher birthrate to produce large families. I highly recommend taking a look at the program. Most educational.

Meanwhile, we can wait to see what the Hungarian government’s next move will be to “remedy” the situation with those pesky NGOs.

Viktor Orbán looked into Vladimir Putin’s eyes and was reassured

Yesterday, given the very crowded news day, I had  neither time nor space to discuss an article by Ildikó Csuhaj of Népszabadság about some of the details of the negotiations between Russia and Hungary over the Paks nuclear plant. What you have to know about Csuhaj is that she seems to have fantastic connections to important Fidesz and government officials and usually comes up with impressive “scoops.”

As we discussed in the comments, information coming from these circles cannot always be trusted and, in fact, one suspects that some of the leaks that reach Csuhaj might be purposely planted in the leading left-of-center paper. In any case, Csuhaj received lots of information about the Paks deal from her unnamed sources. Some of the information sounds entirely plausible. For example, that the plan to have the Russians build the extension to the power plant was first discussed in January 2013 during Viktor Orbán’s visit to Moscow.

I don’t know whether any of you remember, but the opposition belittled the significance of the meeting last January and pointed to the extremely short duration of the visit. The left media drew the conclusion that Viktor Orbán offered himself to Vladimir Putin but the president of Russia wasn’t interested. In brief, the meeting was no more than a courtesy visit. Today we know that during that visit Orbán got an offer of Russian collaboration on the Paks project. Apparently he pondered the issue for a few months and by the summer made the decision to go ahead. In mid-summer serious negotiations began, which continued all the way to the last days of December.

According to Ildikó Csuhaj’s source, what inspired the Orbán government to add two extra reactors to the existing plant was its desire to achieve sustainable economic growth. Building such a large project, especially if the story is true that 40% of the work will be done by Hungarian companies, will be a stimulus to employment and will give impetus to faster growth.

So far the story sounds plausible, but what comes after that must be taken with a grain of salt. According to the Fidesz story, Viktor Orbán began making inquiries at large German industrial concerns. Apparently, negotiations were conducted with RWE AG, the second largest utility company in Germany, and Deutsche Telekom. On the basis of these conversations, according to the Fidesz source, Orbán came to the conclusion that what German industry will need in the future is cheap energy. But those nasty German environmentalists are against building reactors on German soil. Given the Russian offer, Orbán apparently hatched the idea of building a large nuclear power plant that will be more than enough for Hungary’s energy needs. The rest of the capacity could be sold to Germany’s energy-hungry industrial complex.

The project couldn’t be financed from private sources as the Finnish nuclear power plant will be. Moreover, Orbán apparently made it clear that the plant must remain in state hands. Thus, a bilateral financial agreement signed by Russia and Hungary was needed which is a first within the European Union.

Csuhaj’s Fidesz source claimed that Viktor Orbán received the European Union’s blessing for the bilateral agreement. Allegedly, János Lázár talked to Günther Oettinger, EU commissioner for energy. The EU Commission even sanctioned closing the deal without a tender.

Apparently, the Edmond de Rothschild Group, a private Swiss banking concern which among other things offers investment advisory services, was especially helpful to the Hungarians in handling all these sticky negotiations with EU officials. The Rothschild Group advised the Hungarian government to get in touch with the law firm Hengeler Mueller, which has offices in Berlin, Düsseldorf, Munich, Brussels, and London. It is a large firm with 90 partners and 160 associates. They give “high-end legal advice to companies in complex business transactions.” It was allegedly this law firm that managed “to convince” the European Commission about the legality of the transaction.

Well, it seems that the European Commission has not yet blessed the deal. Eszter Zalán, the Brussels correspondent for Népszabadság, asked Sabine Berger, the spokeswoman of Günther Oettinger, who informed her that Oettinger’s office will examine the agreement and decide whether it conforms to European laws. This legal scrutiny may take weeks to complete. It also became clear that details of the agreement reached Brussels only in December. The announcement yesterday, however, didn’t come as a surprise to the European Commission.

Domestically, there is an outcry over the agreement, signed secretly with no consultation with the opposition, experts, or the general public. Fidesz politicians responded to this criticism by claiming that it was during Bajnai ‘s tenure that parliament authorized the government to conduct negotiations about doubling the capacity of the Paks nuclear power plant. They called members of the opposition, including Bajnai, liars for denying their authorization of the negotiations.

Well, this is not a correct description of what happened in 2009 when the topic of the enlargement of the power plant came up in parliament. Csaba Molnár, then minister in charge of transportation, communication, and energy, was the man who turned in the resolution to which Fidesz is now referring. In it there is not one word about permission to start negotiations with anyone concerning building two more reactors. It simply talks about authorization to begin a study of its feasibility, its environmental impact, future requirements of the population, etc. However, all Fidesz politicians keep referring to this resolution as authorization for making a deal with the Russians.

Finally, let me tell you a funny story that I read in today’s Magyar Nemzet. The article quotes Viktor Orbán as saying, “It was three years ago at one of the meetings of the Valdai Club that Vladimir Putin turned a bit to the right and winked; his eyes told me that everything will be all right. He talked about energy cooperation, about Paks, and about many other matters. He made it clear that Hungary can only win from all his plans. I looked into his eyes and saw that he means it, and Hungary will be a winner of all this.”

Putin turned a bit to the right and squinted

Putin turned a bit to the right and winked

I assume many of you remember another quotation, this time from George W. Bush, about Putin’s eyes. It was uttered in 2001: “I looked the man in the eye. I found him to be very straightforward and trustworthy. We had a very good dialogue. I was able to get a sense of his soul; a man deeply committed to his country and the best interests of his country.” So, I wouldn’t rely on Putin’s eyes if I were Viktor Orbán. And while we are at Putin’s eyes, John McCain said in 2007 : “I looked into Mr. Putin’s eyes and I saw three things — a K and a G and a B.” Viktor Orbán should keep that in mind when he gazes into eyes of Vladimir Putin, whom he apparently admires greatly.

Hungary’s “national tobacco shops.” Who are the happy recipients of the concessions?

In February 2012 I wrote a post on “Fidesz, the tobacco monopoly, and the tobacco industry’s lobby.” That was when the Hungarian parliament voted to make tobacco a state monopoly. Since then there have been several amendments to the bill, which originally stipulated that the newly established National Tobacco Shops could sell only tobacco products. The changes were necessary because it soon became evident that, since the profit margin on tobacco products is thin, the people who successfully bid to open such a store couldn’t make a living solely from selling cigarettes. Bit by bit other products were added to the list: alcoholic and non-alcoholic beverages, energy drinks, lottery tickets, and newspapers. But even with the added product lines there were not too many takers, especially in smaller villages.

According to the law one tobacco shop is supposed to serve 2,000 inhabitants. Currently around 40,000 stores sell cigarettes, but because of the above restriction there will only be about 7,000 stores where people can buy tobacco products. Last February I wrote that when I first heard about this scheme “I envisaged 7,000 pro-Fidesz Hungarians as the lucky recipients of these concessions.” Well, not quite. Second-tier party members and their families will be able to establish a number of stores in areas where the financial benefits of the concessions are more or less guaranteed. Meanwhile, in 1,400 smaller communities there were no applicants. Come July, there might not be a single tobacco shop in places like Herend (pop. 520).

by ur1336 / Flickr

by ur1336 / Flickr

The original justification for the establishment of these tobacco shops was that they would assist large families, would give young mothers just returning from maternity leave some extra income, and would provide a living for some of the otherwise unemployed. The final list of recipients tells a very different story.

Doctors who are supposed to tell people about the deadly results of smoking are eagerly participating in this new business opportunity. On paper one person can have only five stores, but there are many cases in which members of the same family applied for and won concessions. In Esztergom, out of the possible sixteen tobacco shops, ten went to one family, judging from the family name that is not exactly common, Sóron. Ádám Sóron received four, Tibor Sóron one, Mrs. Tibor György Sóron five! For the time being we don’t know what the connection is between Fidesz and the Sórons, but I think it is only a question of time before all will be clear.

Another alleged reason for establishing these tobacco shops was the government’s desire to decrease the number of smokers in Hungary. The bill that was passed last year stipulates that no tobacco product can be sold to a customer as long as there is an underage (18 years) child  in the shop. (Let’s not go into how stupid that idea is!) But then, what do I read? The nineteen-year-old Bence Hídvégi, son of the Fidesz mayor of Fonyód, received permission to operate three tobacco shops, two in Fonyód and one in Balatonfegyves. One day his presence in a tobacco shop would have brought business to a screeching halt; the next day he can run the show.

And while we are on the topic of teenage smoking and the number of retailers, it seems that there is no direct correlation between the two. Austria is a prime example. The highest number of teenage smokers in all of Europe can be found there, and the owners of Austria’s 8,000 tobacco shops are the leading lobbyists against any kind of anti-smoking legislation. Moreover, Austria’s overall standing in Europe as far as tobacco consumption is concerned doesn’t support the notion that fewer tobacco shops will result in lower figures. In Hungary the percentage of smokers in the population as a whole is 38%;  in Austria, 34%. Not a huge difference. Moreover, in both countries the numbers are growing.

The real reason for making tobacco a state monopoly was to help domestic tobacco companies. János Lázár, who came up with the idea of national tobacco shops, relied heavily on the “advice” of Continental Zrt. Continental has only about a 10-15% share of the very large tobacco market. The legislation was most likely written with a view to giving an advantage to Continental and discriminating against foreign companies like Philip Morris, British American Tobacco, and Imperial Tobacco. With tobacco as a state monopoly the Hungarian state could decide which products it would stock, and presumably the price of these products, in the tobacco shops.

The Orbán government used Austria as its model, but the Austrian model was flawed–not only in terms of public policy but also with respect to the state monopoly issue. Austria had its own troubles when European Union requirements changed in 1998 and Austria was forced to partially privatize Austria Tabak, the state monopoly that had dominated the Austrian tobacco industry until then. Something quite similar could befall Hungary.

And what has happened to the owners of Hungary’s private tobacco specialty shops? I read about a place, “Ági trafik” in Budakalász, whose owner has had his shop since 1972. His grandfather’s tobacco shop was nationalized in 1950, but twenty-two years later he began anew. He has a sister who is paralyzed. Now he is ruined. He put in an application but didn’t receive a concession. According to some estimates, practically all of the private tobacco shop owners were dispossessed. One owner was approached by two different men who asked him to rent his shop to them. You can imagine how he feels.

Fidesz managed to kill two birds with one stone. They are helping the Hungarian-owned Continental Zrt. carve out a larger share of a lucrative market and, by setting up tobacco shops as state concessions, they are spreading government largess among their followers. Multinational companies and Hungarian private enterprise will once again suffer; Orbán will further extend his economic reach.