Tag Archives: George Friedman

The Hungarian National Bank’s foundations and their beneficiaries

Last night, after a legal battle, the lists of all the grants the six Hungarian National Bank foundations approved in the last two years were finally released. It will take some time for analysts to sort through these lists to figure out who got how much for what from the foundations. Not only are the lists long, but it can happen that the same person or company received grants from several foundations.

The six foundations of the Hungarian National Bank have complicated names starting with Pallas Athena, the Greek goddess of wisdom, courage, inspiration, and many other virtues. By now only acronyms are used, like PADA, PADOC, and PADS. In any case, György Matolcsy sank 265.65 billion forints or 855.7 million euros of public money into his foundations. He had no intention of ever revealing where all that money would eventually end up. But the Kúria, Hungary’s highest court, decided otherwise. Hence the release of the lists of foundation grants.

These foundations, in addition to serving as sources of grants to the regime’s favorites, also provide job opportunities and extra income for close associates or friends of the management of MNB. The yearly salaries of the six foundation directors amount to 320 million forints. In addition, 30 individuals serve as paid members of their boards. Some people have multiple jobs at different foundations.

It will take some time to determine the greatest beneficiaries of György Matolcsy’s largesse. But so far we can say that they all seem to be politically close to the present government. I would place many of them on the far right of the Hungarian political spectrum.

The building of the Hungarian National Bank

The building of the Hungarian National Bank

One major beneficiary was New Wave Media Kft., whose managing director is István Száraz. It recently acquired two internet news sites: vs.hu and Origo. It also owns two English-language sites: welovebudapest.com and welovebalaton.hu. They seem to be useful sites for potential tourists. One can learn very little about the corporate structure of New Wave from its website, but Hungarian newspapers seem to know that György Matolcsy’s cousin, Tamás Szemerey, is one of the owners.

According to a quick estimate, New Wave received grants from all six foundations, amounting to more than 500 million forints. Over and above this amount 70 million forints was given directly to the ailing vs.hu website. In addition, New Wave received 14 million forints for the translation of three books by George Friedman, a geopolitical forecaster of Hungarian origin who seems to be an admirer of Viktor Orbán.

The foundations poured quite a bit of money into publishing ventures–translations as well as original works. One book found worthy of translating–this time into Polish, Romanian, Czech, and Ukrainian–was Chess and Poker: Chronicle of the Victorious Battles of the Hungarian Economic War of Independence, written by Matolcsy’s secretary, Helga Wiedermann. The book created quite a stir in Hungary when it appeared. Wiedermann recounted that on November 17, 2011, when the Hungarian government officially announced that it had decided to turn to the IMF for a loan, Matolcsy had lunch with three representatives of Goldman Sachs. He told them about the decision four hours before the official announcement. According to Wiedermann, one of three visitors immediately excused himself to go to the rest room, presumably to inform, directly or indirectly, Goldman’s forex trading desk. The EUR/HUF chart from that day shows immediate buying pressure after Matolcsy’s indiscretion. I wrote about this incident shortly after the book appeared in March 2014. So now this book will be available to a larger reading public. The cost of translation, printing, and advertising was 68.5 million forints plus VAT.

Kairosz Publishing House, the favorite of the Hungarian right, received 39 million forints for the publication of a six-volume series on Hungarian history by Dr. Miklós Kásler. And no, his doctorate is not in history. He is the director of the National Institute of Oncology. For a number of years he has appeared on state television with his own version of Hungarian history. The members of the board found the publication of this multi-volume work important because “it can serve as a counterbalance to the strongly globalized historical view arriving from the West.” It is supposed “to form the world view of new generations and to strengthen the patriotic sentiment against the globalist views.” The six volumes cover Hungarian history from the arrival of the Magyars in the Carpathian basin to, I assume, the glorious governance of Viktor Orbán.

A new book–“Unorthodox Eccentrics” (Unortodox különcök)–by István Lovas, the Jewish anti-Semite with a questionable past, was also found worthy of financial assistance. It too was published by Kairosz. The book is supposed to be a comparison of the Hungarian, Icelandic, and Malaysian handling of the recent economic crisis. According to the review I read, it is mostly about Viktor Orbán the brave and “everybody else.”

Among the grant recipients is another “favorite” of mine, Tamás Fricz. He calls himself a political scientist and for a while was actually an associate of the Political Science Institute of the Hungarian Academy of Sciences. A few years ago the new director of the Institute had the courage to throw him out since Fricz is a Fidesz propagandist, pure and simple. More about his anti-German and anti-Israeli propaganda can be found in one of my earlier posts. Fricz’s subsidized book is a collection of 80 articles written between January 2013 and October 2014. The publisher received 1.2 million forints to help defray costs.

Finally, a 1.5 million grant was given to the Szabad Piac Alapítvány for the publication of the Hungarian translation of Tom G. Palmer’s edited volume After the Welfare State: Politicians Stole Your Future, You Can Get It Back. The book is available online. Palmer’s introduction begins: “Young people today are being robbed. Of their rights. Of their freedom. Of their dignity. Of their futures. The culprits? My generation and our predecessors, who either created or failed to stop the world-straddling engine of theft, degradation, manipulation, and social control we call the welfare state.”

So far I have spent very little time perusing the lists, but I think that even these few examples give us an idea of the mission of the Hungarian National Bank’s foundations. Not financial literacy, not economic research, but the promulgation of Orbán’s ideology and the dissemination in Hungarian of the limited, questionable support it finds in the West. And, of course, assistance for the government’s friends and family.

April 23, 2016

Miklós Horthy and Viktor Orbán are kindred souls, at least according to George Friedman

I hope I made it eminently clear what I think of George Friedman’s brief description of the role of Miklós Horthy who, he claims, heroically tried to balance between two great powers. Friedman’s knowledge of the period is woefully inadequate. He couldn’t even keep his facts straight, never mind the validity of his conclusions.

On the basis of this inadequate description of what transpired in Hungary between, let’s say, 1933 and 1944, he portrays Horthy as a politician of vision who brilliantly managed to keep Germans and the far right at bay as long as possible. Thereby, he managed to save thousands of lives.

In Friedman’s eyes Prime Minister Viktor Orbán resembles Horthy: he is also trying to steer the ship of a weak and poor country though dangerous waters. Admittedly, he says, times are different, but “circumstances still bear similarities to Horthy’s time.” What, however, we never get any answer to is why Germany is a dangerous enemy of Hungary today. Because Viktor Orbán’s foreign policy is described as a balancing act between a  hostile Germany and a hostile Russia.

Friedman, it seems, envisages a Russia that sooner or later will run down all of Ukraine and thus will become a direct neighbor of Hungary. In the case of Germany, Friedman focuses on the nature of the EU and economics. First, “Hungary is already facing Germany’s policy toward liberal integration within the European Union, which fundamentally contradicts Hungary’s concept of an independent state economy. Hungary is already facing Germany’s policies that undermine Hungary’s economic and social well-being. Orban’s strategy is to create an economy with maximum distance from Europe without breaking with it, and one in which the state exerts its power. This is not what the Germans want to see.” And second, “There is little support from Hungary’s west, other than mostly hollow warnings. He knows that the Germans will not risk their prosperity to help stabilize the Hungarian economy or its strategic position.” Of course, the European Union does try to stabilize the Hungarian economy by pouring billions of euros into it, without which it would have gone under a long time ago.

Be afraid of the future because the past will return / Source: nikotex.blogspot.com

Be afraid of the future because the past will return / Source: nikotex.blogspot.com

And, according to Friedman, there is another similarity between the situations of Horthy and Orbán. Both leaders were faced with a far-right threat. Just to set the historical record straight, Horthy’s success with the extreme right was less than successful, not that he tried very hard. Horthy’s National Army from its birth was a gathering place of extremists. Although he boasted that he could get rid of them at any time, in fact both his administration and the army were full of anti-Semitic extremists who were great admirers of Hitler’s Germany. His friendships with far-right military and political actors in the 1930s dated to 1919-1920 when he was the hope of the extreme right. In the 1920s, Prime Minister István Bethlen managed to keep Horthy away from both his old extremist friends and politics. Once Bethlen was gone, there was no one to keep Horthy in line. He was on his own, with the well documented results.

Friedman sees Orbán just as he imagined Horthy to be: the guarantor of right-of-center politics. The real enemy is Jobbik and, if we didn’t have Orbán, Jobbik today would be the leading political force in Hungary. At least this is what the following muddled sentence indicates: Orbán “constructed a regime that appalled the left, which thought that without Orbán, it would all return to the way it was before, rather than realizing that it might open the door to the further right.” Friedman either doesn’t know or doesn’t want to know the real facts: Orbán has fulfilled several demands of Jobbik in the hope of siphoning off some of its support.

Orbán’s strategy as far as the extreme right is concerned has so far been quite similar to that of the governments between the two world wars. The problem is that the strategy didn’t work then and it doesn’t work now. Jobbik has not lost its appeal. On the contrary, the extreme right has gained ground during the last four years. In 2010 855,436 people voted for Jobbik (16.67%) while this year the number was 1,020.476 (20.22%). It seems to me that Orbán is no guarantee of anything. In fact, with his constant courting of the far right, he only added legitimacy and political heft to Jobbik.

As for the sorry state of Hungarian democracy, Friedman whitewashes Orbán’s domestic policies. “Internally he is increasing his power constantly, and that gives him freedom to act internationally.” Or, “Orbán is trying to do what Horthy did: strengthen his power over the state and the state’s power over society. He is attacked from the left for violating the principles of liberal democracy and Europe.” But, as Friedman explains, all this is necessary because of the external and internal threats Hungary faces.

In many ways George Friedman and Viktor Orbán see the world similarly. Both consider the European Union a massive failure. Moreover, in Friedman’s view, Orbán doesn’t want “to continue playing the German game in the European Union because he can’t. As in many European countries, the social fabric of Hungary is under great tension.”  So, the general portrait of Orbán that circulates at home and abroad as a man who wants to reap the benefits of the European Union but refuses to abide by its rules is all wrong. If we were to believe Friedman, Orbán is doing all this for the higher purpose of saving his country from the Russian bear and the German imperial eagle. He is the hero of the nation, and we are all too short-sighted to realize his true aim.

This particular construct, I’m afraid, is the work of Friedman’s imagination. Orbán’s policies are largely guided by his insatiable desire for power. He whips up nationalist and anti-European sentiments in order to bolster his popularity with Fidesz and Jobbik voters. At the last election, although more than half of the population wanted to see Orbán go, with help from clever mathematicians who managed to construct an electoral system that could produce a two-thirds majority from 44.87% of the votes cast for Fidesz, he managed to stay in power for another four years. After that, apparently he has another plan. Just like his friend Vladimir Putin, he is planning to move on to the presidency. Admittedly, right now the Hungarian president doesn’t have much power, but Orbán with his two-thirds parliamentary majority can easily change the Hungarian constitution to transform Hungary’s parliamentary system into a presidential one. If this happens, Orbán will be a major political figure in Hungary until at least 2022!

The real moving force of Orbán is his personal power and his inability to cope with any authority above himself. The rest is just talk.

I could wrap up my critique here, but I feel I should give a few more examples of the author’s wanton disregard for facts and the unsupported “grand theses” in this article. Here are a few examples. “The great depression in Mediterranean Europe, contrasted with German prosperity, is simply the repeat of an old game.” What old game? Or, Hungary allegedly lies between Russia and “the European Peninsula.” European Peninsula? Or, “the Ukrainian crisis can only be understood in terms of the failure of the European Union.”‘ In what way?

If this article had been published by a run-of-the-mill journalist I would be less appalled. But it was written by a former academic who is supposed to be an expert on international affairs and geopolitical strategy. Based on this piece, I think we can safely exclude from his areas of expertise Hungarian history and politics.

A critique of a political analysis on Hungary by Stratfor’s George Friedman

In the last few months I have been getting a daily newsletter from Stratfor, a private intelligence and forecasting company. No, I’m not a subscriber, and I doubt that Stratfor has many individual subscribers. Its clients are mostly institutions that feel the need for economic, military, or political analyses and forecasting.

Stratfor’s daily newsletter offers one free analysis chosen by the company. Most of the topics lie outside my field of interest, but today’s “special” aroused my curiosity: “Borderlands: Hungary Maneuvers.” The article was written by George Friedman, founder and chairman of Stratfor. Friedman received his B.A. from the City College of New York and his Ph.D. from Cornell University. For almost twenty years he was a professor of political science at Dickinson College in Pennsylvania. Then in 1996 he decided to quit academe and become a strategic analyst.

Friedman was born in Budapest to Holocaust survivors, but his parents left the country when he was a small child. What he learned from his parents sitting around the kitchen table was that “except for the Germans, the vastness of evil could not have existed.” In his parents’ lessons Miklós Horthy, the Hungarian regent between 1920 and 1944, pretty much got a pass. Friedman continues to believe the history his parents taught him. To his mind, Horthy was a wily geopolitical strategist who maneuvered between Germany and the Soviet Union for quite a while. Only brute German force, blackmail, and threats against Horthy himself opened the door to mass destruction of the Hungarian Jewry.

The first half of the article tries to convince the reader that his vision of Horthy is the correct one while the second draws parallels between the Hungary of today and the times of Horthy. As he says, Horthy’s “experience is the one that Hungary’s current leadership appears to have studied.”

I will not be able to cover the whole article in this post and therefore will concentrate on Friedman’s account of the Horthy era. The appearance of this “revisionist” appraisal of Horthy is especially ill-timed because it was only a few days ago that historians of the Hungarian Academy of Sciences unanimously declared at a conference that the monument Orbán is erecting, which is supposed to make Germany alone responsible for the destruction of Hungarian Jewry, is a falsification of history. Nothing like lending a helping hand to Viktor Orbán’s project.

Friedman’s Hungary was a small, weak country that helplessly floundered between the Soviet Union and Germany, all the while trying to remain independent. “Horthy’s goal was to preserve its sovereignty in the face of the rising power of Adolf Hitler and Josef Stalin.” Friedman seems to think that Horthy viewed both great powers with equal contempt. But that was not the case. In fact, until the very last moment he refused to turn to the Soviets to declare his willingness to negotiate a separate peace, whereas he was indebted to the Germans for helping Hungary regain sizable territories in Czechoslovakia, Romania, and Yugoslavia between November 1938 and April 1941. (These territories are shown in the Wikipedia map below.)

"Hungary's

As for the Jewish issue, Friedman claims that “Horthy was no more anti-Semitic than any member of his class had to be.” First of all, I’m not sure why Friedman believes there was a social imperative to be anti-Semitic. Members of Horthy’s social class may have been anti-Semitic, but they didn’t have to be anti-Semitic.

Horthy as well as the majority of Hungarian politicians and high officials wanted to rid the country of its Jewish population. Horthy didn’t want an immediate “cleansing” because without Jewish capital and know-how the Hungarian economy would have collapsed. But eventually the Hungarian anti-Semites stripped the Jews of all their worldly possessions and deported them. These Hungarians, including high officials, didn’t particularly care what happened to the Jews once they were deported. There simply had to be “a changing of the guard” (őrségváltás). Non-Jews were to take over positions held by Jews in the professions, business, and manufacturing. None of this seems to have penetrated Friedman’s consciousness.

It is at this point that we reach the crucial date of March 19, 1944, which is described this way: “Horthy fell from his tightrope on March 19, 1944. Realizing that Germany was losing the war, Horthy made overtures to the Soviets.” Let me state right here that Horthy did not make overtures to the Soviets. A small delegation talked to American and British officials in Turkey. They were told to talk to the Russians, something Horthy was reluctant to do.

Friedman’s inadequate knowledge of history is evident in practically all the sentences he writes in this article. According to him, “Hitler forced the Hungarian leader to form a new government consisting of Hungary’s homegrown Nazis, the Arrow Cross Party.” Or, a few sentences later, he writes: “He [Horthy] did not crush the Hungarian Nazis, but he kept them at bay. He did not turn on Hitler, but he kept him at bay. What Horthy did was the dirty work of decency. He made deals with devils to keep the worst things from happening. By March 1944, Horthy could no longer play the game. Hitler had ended it. His choice was between dead sons and the horror of the following year, or living sons and that same horror.” Friedman’s “parents believed that Horthy’s critics were unable to comprehend the choices he had.”

We who are more familiar with the real story realize that the account Friedman heard from his parents in addition to bits and pieces he remembers from Horthy’s memoirs have nothing to do with reality. But Friedman cannot be deterred from his preconceived notions of German-Hungarian relations and the Hungarian Holocaust. He keeps going: “Once the Wehrmacht, the SS and Adolf Eichmann, the chief organizer of the Holocaust, were in Budapest, they found the Arrow Cross Party to be populated by eager collaborators.” Of course, this isn’t true either. The eager collaborators were in fact members of the Hungarian government appointed by Horthy.

The point of this hopelessly inaccurate history is to reframe the present debate about Viktor Orbán’s governance. On the one hand are people like his parents, who blamed the Germans “for unleashing the brutishness in the Hungarians.” On the other hand are nameless people who were harsher on Horthy. This debate, he writes, “has re-entered history through Hungarian politics. Some have accused Prime Minister Viktor Orbán of trying to emulate … Miklós Horthy…. This is meant as an indictment. If so, at the university of our kitchen table, the lesson of Horthy is more complex and may have some bearing on present-day Hungary.”

I suggest that George Friedman take a refresher course.