Tag Archives: José Manuel Barroso

Infringement procedure against Hungary on account of the Paks nuclear power plant

Well, it’s official. The European Commission called on the Hungarian government to suspend all further projects in connection with the construction of the Paks II nuclear power plant because Budapest hasn’t followed EU rules governing open bidding procedures. Here is the official press release:

Commission opens infringement against HUNGARY for lack of compliance of the Paks nuclear power plant project with EU public procurement rules

The European Commission decided today to launch an infringement procedure against Hungary concerning the implementation of the Paks II nuclear power plant project. Following exchanges of information with the Hungarian authorities and a thorough assessment of the terms of the award, the Commission still has concerns regarding the compatibility of the project with EU public procurement rules. The Hungarian government has directly awarded the construction of two new reactors and the refurbishment of two additional reactors of the Paks II nuclear power plant without a transparent procedure. The Commission considers that the direct award of the Paks II nuclear power plant project does not comply with EU legislation on public procurement (Directives 2004/17/EC and 2004/18/EC). The Directives consolidate the basic principles of the Treaty on the Functioning of the European Union of transparency, non-discrimination, and equal treatment. These principles seek to ensure that all economic operators have fair chances to participate in a call for tender and to win a contract. The European Commission has decided to send a letter of formal notice to Hungary, which constitutes an official request for information and is the first step in an infringement procedure. The Hungarian authorities now have two months to respond to the arguments put forward by the Commission.

As expected, the Orbán government is defiant. János Lázár in his usual fashion expressed his total disgust with Brussels and promised to bring suit against the Commission if necessary. In his harangue against the EU he judiciously avoided talking about the actual case, the lack of an open tender, which is an EU requirement. Instead, he talked about the EU allegedly prohibiting Hungary from signing bilateral commercial agreements with so-called third countries or such country’s citizens. Hungary has “the right to sign agreements with China, the Arab countries, or for that matter with Russia.” But of course, this is not the issue here. After all, as we learned from José Manuel Barroso’s letter addressed to Viktor Orbán, which I published on Hungarian Spectrum today, the contract with Rosatom was considered to be legal as far as EU law was concerned. The way the contract was awarded, however, was another matter. Barroso in his letter made this eminently clear. Barroso did not, as Lázár now claims, “promise his support of the project in principle.” On the contrary, he called attention to the problem of “the rules on public procurement and state aid.” That was a signal of further probes into the legality of the deal.

Nuclear Power Plants in the European Union

Nuclear power plants in the European Union

Lázár is trying to divert the conversation from the real issue–defiance of EU laws that are on the books to ensure fair competition. Instead, he is trying to show that the controversy is the result of the outsize influence of western multinational corporations. After all, he said, Paks II is one of the largest projects underway in Europe. Large amounts of money can be made by being one of the contractors or suppliers. So, according to Lázár, the issue “is not political but commercial.” Well, indirectly it might be commercial, but what the EU is directly complaining about is an illegal process. The Hungarian government transgressed several European laws and directives that are supposed to ensure equal opportunities to all.

János Lázár was right on one point. He bitterly complained about the length of time it took to deliver the infringement procedure. After all, it was about two years ago that the Hungarian government began final negotiations on the Paks II project. Indeed, it is hard to imagine that it would take two years of solid work to come to the conclusion that Hungary was in the wrong when it signed a contract with Rosatom without open competitive bidding. Népszabadság noted that despite all his blustering, Lázár said nothing about Hungary’s total unwillingness to repeat the bidding process, this time with multiple applicants.

Attila Aszódi, the government commissioner in charge of the project, was asked by many media outlets to comment on the situation. Aszódi is described in his curriculum vitae as an “energy engineer” (energetikai mérnök). Before he was called to head this project he was a full professor at the Institute of Nuclear Technology at the Budapest Engineering University. So, I guess one cannot be terribly surprised that Aszódi is not well versed in legal matters. In his numerous interviews he painted a simplistic picture of the Hungarian position. In his opinion, since the European Union “raised no objections of principle to the agreement from the perspective of article 103,” it means that “the Paks II project itself must be legal.” A huge misunderstanding of the issue.

Meanwhile it turned out that the Hungarian government has spent a fair amount of money already on the project. Moreover, it has drawn on its loan agreement with the Russian government which, if the project comes to a halt, will have to be paid back immediately in one lump sum.

The most amusing news I read in the Hungarian media today was Rosatom’s reaction to the EU suspension of the Paks II project. The mammoth Russian firm announced that “Rosatom follows the dialogue [between EU and the Hungarian government] and fully shares the opinion of János Lázár concerning the legality of the project.” What a surprise.

The Hungarian government is desperately trying to find an effective way to make the problem disappear. One point they emphasize over and over is that no nuclear plant anywhere inside the European Union was built after an open bidding process. So far I have not heard any reporter who could prove or disprove this assertion. It would certainly be a worthwhile undertaking to find out whether the statement is true or not. And if true, what makes the Hungarian case different.

Exchange of letters between Viktor Orbán and José Manuel Barroso on the Paks project, January-February, 2014

It turned out that I had saved the crucial Viktor Orbán-José Manuel Barroso exchange of letters (January 23-February 7, 2014) concerning the Paks II project to be built by Rosatom, a company owned by the Russian Federation, at the time I posted “A brief summary of the Russian-Hungarian agreement on the Paks nuclear power plant” on March 13, 2014.

Since then, this exchange of letters has become a crucial piece of evidence in deciding the fate of the whole Paks project. It thus might be useful to have the complete texts at our disposal.

Viktor Orbán to José Manuel Barroso, January 23, 2014

Orbán letter Barroso

José Manuel Barroso to Viktor Orbán, February 7, 2014Barroso letter

The Russian-Hungarian deal on the Paks Nuclear Power PlanT is in trouble

Yesterday came the news from Bruxinfo, a Hungarian-language internet site specializing in news about the European Union, that the European Commission will require the Hungarian government to suspend all projects connected to the building of an extension to the existing nuclear power plant in Paks, just south of Budapest along the Danube river. The original plant was built by the Russians, and the two additional reactors, named Paks II, is to be built by Rosatom, the giant Russian nuclear power plant construction company. The very costly project can be undertaken only if Hungary receives a foreign loan, and it seems that it was only the Russian government that was ready to lend €10 billion to be spent on the project, which would be 80% of the cost. The rest is to be provided by the Hungarian government.

The reason for the suspension is that “Hungarian authorities failed to comply with EU procurement rules when they awarded an €12.5 billion project … to Russia’s Rosatom directly, without a tender.” A few minutes after the news broke journalists from Népszabadság were at János Lázár’s door, who confirmed that, although the official letter hadn’t arrived yet, the news didn’t come as a surprise to the Orbán government. However, Lázár added, “the Hungarian government has no reason to be worried [because] we have in our possession a piece of paper that was signed by José Manuel Barroso, former president of the European Commission, on January 14, 2014. Without this we couldn’t have signed the contract.” This letter, he indicated, will show that Hungary followed all the rules and regulations of the European Union. As we will see later, Lázár might be far too optimistic on this score.

The whole Paks II deal has been shrouded in secrecy, especially as far as the Hungarian side was concerned. It was on March 13 that sharp-eyed reporters from vs.hu discovered the Russian text of the loan agreement on www.pravo.gov.ru. This document showed that the Budapest team involved in the negotiations hadn’t told the whole truth about the details of the agreement.  For example, they repeated several times that the Hungarian government’s 20% contribution will be due only at the end of the twenty-one-year period, during which time the loan must be paid back. This turned out to be inaccurate. Every time Rosatom submits a bill Hungary will have to pay 20% of it from its own coffers. More details of the contract between Russia and Hungary are in my post on the subject, written on March 13, 2014.

A year later I wrote again about Paks II when Vladimir Putin had a bizarre conversation with Sergey Kiriyenko, head of Rosatom, on television. Here Putin talked about the Hungarian deal and stressed that “we offer good terms and advanced technology, so if the partner is forced to refuse [to cooperate], which they could have done, it would be damaging to Hungary’s national interests.” Kiriyenko assured Putin that “we have received confirmation from the government of Hungary that all the agreements are in force on a wide range of projects… Everything has been confirmed and coordinated and the contract is coming into effect.” At that time, practically the entire Hungarian media interpreted Putin’s words as a threat to Hungary. My own interpretation was that Putin either suspected or knew that the European Union had already put pressure on Hungary and that Hungary might have to abandon the project.

By that time, the Hungarian government had managed to overcome one hurdle regarding Paks II. Originally Rosatom was to supply fuel rods for the life of the reactors. Eventually, Lázár triumphantly announced that everything was solved. Hungary managed to convince Russia to accept a compromise on this particular issue. However, the nagging problem of the Hungarian government’s entrusting the project to Rosatom without an open bidding process was there from the very beginning. In fact, as soon as the contract was signed, the EU commissioner in charge of energy indicated that this particular aspect of the contract would be investigated in the future.

chess

“A lie has no legs,” says the English proverb. Of course, we know that an awful lot of lies go unnoticed, but perhaps the Hungarian government’s lies about Paks II may catch up with it. Péter Magyari of 444.hu has been trying to find out whether part of the Russian loan has already been received in Budapest. After he and other journalists had a conversation with Attila Aszódi, government commissioner in charge of Paks II, Magyari came to the conclusion that some Russian money has most likely already arrived and been spent on preliminary expenses. According to the commissioner, about 6-10% of all expenses will be spent between 2015 and 2018 on the project, before the cornerstone is laid. The problem is that, at least until September, Lázár had several times stated that not a euro cent had come from Moscow. The fear is that the Orbán government, knowing the concerns of Brussels, began speeding up the process of awarding contracts for the project in order to present a fait accompli, a situation that cannot be reversed. If, however, the project is either scrapped or has to start from scratch, Hungary will be stranded with a considerable debt that must be paid back to the Russian government immediately.

Now let’s return to János Lázár’s claim as of yesterday that all’s well with the project because “we have in our possession a piece of paper that was signed by José Manuel Barroso, former president of the European Commission, on January 14, 2014. Without this we couldn’t have signed the contract.” János Lázár’s memory is not the best. The “piece of paper” he is talking about was dated February 7, 2014 and was an answer to Viktor Orbán’s letter to Barroso written at the end of January. Orbán informed the president of the European Commission about “the recent developments with regards to nuclear energy cooperation between Hungary and the Russian Federation.” Orbán in this letter tried to downplay the fact that the job of building the nuclear power plant was given to Rosatom without any competitive bidding process.

It was to this letter that Barroso reiterated the Commission’s “respect for Member States’ basic choices concerning their energy mix.” Barroso added, however: “Member States’ commitment to comply fully with the rules of the Treaties and secondary legislation, in particular those governing the internal energy market, and to act in a spirit of coordination and full transparency, remains vital.” After the Commission examined the draft agreement, it “raised no objections of principle to the agreement from the perspective of article 103.” However, this was not a blanket endorsement of the Russian-Hungarian agreement because “there are … other aspects of EU law to be observed, such as the rules on public procurement and state aid.” (emphasis mine) All this can be read in my post of February 26, 2014.

I’m afraid you will have to trust me when it comes to the veracity of these quotes because today when I tried to get back to the links I provided to kormany.hu, the Hungarian government’s official website, I couldn’t find either Orbán’s letter to Barroso or Barroso’s to Orbán. They are both gone. I wonder why.

I was lucky to have recorded the most important sentences from Barroso’s letter. This way we have in front of us the message of this “piece of paper,” which doesn’t support János Lázár’s contentions. But what else is new?

Paks, the European Union, and the Russian threat

It looks to me as if Viktor Orbán has managed to maneuver his country into an untenable position between Russia and the European Union. It has taken five years, but he has succeeded in making Hungary the target of both Moscow and Brussels.

First, he tested the patience of the European Union, which under José Manuel Barroso’s presidency seemed infinite. After a while, drunken with success, he imagined himself to be a statesman who could be an equal player on the world stage with the leaders of the dominant EU countries.

At first, he was satisfied with waging verbal battles with unsuspecting western diplomats unaccustomed to Viktor Orbán’s way of dealing with those who stand in his way. Later, he decided to solicit “an ally” who would add weight to his words. The desired Hungarian “sovereignty,” in his myopic worldview, could be achieved by balancing Russia against the European Union.

Viktor Orbán did not realize that the world around him had changed in some fundamental ways. Vladimir Putin had over the years acquired the unsavory reputation of being a reactionary autocrat, one of the many his country managed to produce over the centuries. As far as the West was concerned, doing business with Russia was fine, but having cozy relations with the lord of the Kremlin was definitely not. And Orbán in his usual fashion went out of his way to ingratiate himself with Vladimir Putin, just as he did with the leaders of China while the West watched warily. Their concern only grew when Putin annexed the Crimea and incited a rebellion in the mostly Russian-inhabited areas of Ukraine. But it was too late for the EU. Orbán had already committed his country to having Rosatom build two new nuclear reactors with the help of a Russian loan. And it was also too late for Viktor Orbán. His quest for an “independent” Hungarian foreign policy was doomed as soon as it became apparent that the West would not take the Russian aggression against Ukraine lying down.

It wasn’t only the Russian-Ukraianian conflict that changed the political landscape. There was something else that Orbán didn’t take into consideration. Last November Barroso’s presidency came to an end and with it perhaps Brussels’ lackadaisical attitude toward Viktor Orbán’s antics. The front runner, Jean-Claude Juncker, was the worst possible choice as far as the Hungarian prime minister was concerned. Orbán, following David Cameron of Great Britain, voted against him in the European Council, but the two of them remained in the minority. The reason for Orbán’s opposition was that it was known that Juncker supports a stronger,  more unified European Union, the last thing Orbán wants. What was even more worrisome was that Junker named Frans Timmermans of the Netherlands to be his first deputy, and Timmermans was known to be an outspoken critic of Viktor Orbán’s illiberal views. Orbán found himself in a very uncomfortable position because there were signs that the European Union, with an entirely new leadership, would at last crack down on Hungary’s repeated infringements of EU laws.

This change in attitude on the part of the EU might finally have arrived. Those familiar with Viktor Orbán’s political tactics might consider his references to the death penalty no more than a PR move to boost his flagging popularity and steal votes from the neo-Nazi Jobbik party, but I think it was one of the issues that made the European leaders have second thoughts about giving Orbán so much leeway. In addition to withholding billions of euros from Hungary, this is the first time that an official of the European Commission talked about Article 7 as a real option in connection with Hungary for “solving crises and in the interest of holding on to the values of the European Union.”

Vladimir Putin and Sergey Kiriyenko, May 5, 2015 TAA / Photo Alexey Nikolsky

Vladimir Putin and Sergey Kiriyenko, May 5, 2015
TASS / Photo Alexey Nikolsky

And now comes Vladimir Putin’s bizarre conversation with Sergey Kiriyenko, head of Rosatom. First of all, although this conversation took place in Putin’s office and looks like a private conversation, it was shown on Russia’s state television. Surely, it was meant to be a message for a wider audience. The conversation was about the Paks nuclear power plant. According to Putin, “we offer good terms and advanced technology, so, if the partner is forced to refuse [to cooperate], which they could have done, it would be damaging to Hungary’s national interests.” Kiriyenko assures Putin that “we have received confirmation from the government of Hungary that all the agreements are in force on a wide range of projects…. Everything has been confirmed and coordinated and the contract is coming into effect.”

Practically all the Hungarian media interpreted Putin’s words as a threat to Hungary. One exception was the official “Híradó” (News), which provides news to Magyar Televízió and Magyar Rádió. There the headline read:”Putin is worried about Hungarian national interests.” The other exception was “Pesti srácok” (Kids of Pest), a far-right Fidesz Internet site, which claimed that “Putin is satisfied with the Hungarian government’s stand against the European Union,” a blatant misinterpretation of the conversation between the two men.

Although the available translations are rather poor and the subordinate clause “which they could have done” is not at all clear, I believe that Putin either suspects or knows that the European Union has already put pressure on Hungary and that Hungary might have to abandon the project. János Lázár has repeatedly assured the country that all is well and that work will begin on time, but these assurances were probably not grounded in reality. Although Euratom eventually approved the plan to have Russia supply fuel rods for the new reactors, there are still serious hurdles for Hungary to overcome. Negotiations are in progress and, judging from Putin’s unusual “conversation” with Kiriyenko, they might not be going well.

Not surprisingly, the Orbán government didn’t respond to Putin’s warning to Hungary and the European Union. Most likely the spin doctors are planning an appropriate response and perhaps tomorrow János Lázár, in his usual Thursday morning press conference, will say that all is well with Paks, the European Union, and Rosatom and that he doesn’t know what all the fuss is about.

Culture and education in Viktor Orbán’s Hungary

Now that it is almost certain that Tibor Navracsics will be responsible for education and culture in the European Commission, perhaps it is appropriate to focus on how these areas have fared under the watchful eye of Viktor Orbán. I am not exaggerating the prime minister’s role here because we have seen a carefully orchestrated Kulturkampf in Hungary ever since 2010. The government purposely fosters the kind of artistic and literary work that appeals to the political leadership, whose taste is not exactly avant garde. Abstract art is frowned upon, as are the kinds of novels that Péter Nádas, Péter Esterházy or László Krasznahorkai write, although they are the best known contemporary Hungarian writers. The statues that are being ordered or resurrected by the government take us back not to the twentieth but rather to the nineteenth century. I wrote several posts about the fate of Róbert Alföldi’s National Theater, now under the direction of Attila Vidnyánszky, originally from Ukraine. His productions have resulted in a loss of 40,000 theatergoers.

The fate of the fine arts was handed over to György Fekete, a rather bizarre interior decorator, in the form of a new Fine Arts Academy. Its future was ensured when it was included in the new constitution. The academy also got full ownership of the Műcsarnok (Art Gallery/Kunsthalle), until now in the hands of the Hungarian state. It is the largest art gallery in Hungary. It specializes in contemporary art. Or at least until now it did.

Fekete, who is 82 years old and an arch-conservative in politics as well as in artistic taste, picked a man after his own heart, György Szegő, to be the director of the gallery. He is an architect best known for his stage sets. Despite his appointment as director of a gallery devoted to contemporary art, he actually despises the genre that “has become fashionable in the last twenty-five years.” He also has some frightening ideas about art which, according to him, should not “criticize” but “only delight.” Instead of the “art of the technical media” one must concentrate on traditional art forms, especially painting with its 8,000-10,000 year tradition. What the West presents as art is a “soap-bubble” that will burst in no time. So, the gallery that is supposed to give space to contemporary art will be headed by a man who hates it. He will undoubtedly force his own taste on the public. Very soon we will be back to the fifties when only socialist realism could be exhibited.

I’m no art critic, but the man whom Szegő extolled as his guiding light produced this work.

The Two of Us (2010)

György Fekete: The Two of Us (2010)

By contrast, Szegő mentioned by name one of those soap-bubble artists–Jeff Koons, whose exhibit in the Whitney Museum of American Art has been a great success this summer and fall. The Koons retrospective is moving to the Centre Pompidou, Musée d’art moderne, and from there to the Guggenheim in Bilbao.

Here is an example of Koons’s work.

Jeff Koons: Tulips (1995-1998)

Jeff Koons: Tulips (1995-1998)

I guess from here on Hungarian art lovers will have to go to Vienna for major contemporary art exhibits, but I’m happy to announce that Szegő will receive twice as much money as his predecessor to run the gallery.

And now we can turn to education and all that the Orbán government did and did not do for it. I talked about the Net of University Lecturers who wrote an open letter to José Manuel Barroso on the sad state of Hungarian higher education. Today Budapest Beacon published the English translation of the document, which I republish here with the permission of the editor of the internet portal.

* * *

September 11, 2014

Dear President:

On behalf of university lecturers working in Hungarian higher education, we would like to congratulate you on the occasion of receiving an honorary degree from the Budapest Corvinus University.  All of us greatly appreciate the highly responsible work you performed as president of the European Commission over the past ten years in the interest of advancing the cause of Europe. We would like to use the occasion of your visit to Budapest to call your attention to the crisis situation in Hungarian education.

Over the past five years the Hungarian government has decreased public funding of higher education in real terms by half, and to this day has not created a measured, predictable financial system for the sector.  The Hungarian budget for 2013 allocates 0.43 percent of GDP to education in place of the minimum 1 percent recommended by the European Union.  The current government seriously limits the autonomy of universities by forcing the dismissal of the directors of financially dependent institutions.  The head of government personally appoints chancellors to serve next to rectors through which he can directly interfere in the running of universities.  The government also threatens the independent operation of the Hungarian Accreditation Committee, thereby discrediting its quality inspections and endangering the international integration of our universities. The financial austerity measures have resulted in many being forced into retirement or dismissed. The body of teachers has suffered significant losses, with those retaining their jobs forced to work more for extremely low wages by European standards.

For five years the Hungarian government has failed to adopt a well-grounded strategy for higher education.  The rights and responsibilities of those running higher education are not transparent.  Meanwhile, the government’s administration for education divvies up resources and provides unlawful advantages to institutions close to them or founded by them.  For example, they intend to give 90% of the support for higher education obtained through tender from the European Horizon 2020 program to the National Public Service University.

Alongside existing higher educational and research facilities struggling to retain what is left of their autonomy, the government is building a parallel higher education and research network to service its own goals.  Part of this strategy is the creation and funding (often circumventing normative criteria) of the National Public Service University and the University of Physical Education.  The latter institution was established by the parliamentary majority with an ad hoc modification to a law.  The rules governing the title of university teacher were changed in a manner custom-tailored to a specific individual in such a way that devalues the title of university teacher.  Recently, it came to light that the Hungarian National Bank awarded an amount equal to one and a half times the annual higher education budget, HUF 200 billion (USD 850 million), to its own foundations with which to endow the teaching of its own “unorthodox” economic theories.  This means that state responsibilities are being funded with public money outside the budgetary process in a manner that cannot be controlled, and on ideological grounds.

As a devoted adherent to European values it may be important for you to know that the current Hungarian government does not help, but obstructs the possibility of social advancement.  The Hungarian government undertakes to strengthen the middle class, abandoning the social strata that is increasingly impoverished.  It lowered the obligatory age for attending school to 16. Instead of real programs intending to close the gap and adequate family support and scholarship system, it pursues policies that are harmful to the poor and encourages segregation in Roma schools.  With these actions it makes it impossible for socially disadvantaged students to continue their education.

In the field of education policy the Hungarian government decreased by 30% the number of students beginning their studies in higher educational institutions, which first and foremost destroys the chances of disadvantaged youth.  It is especially important to state here at the Budapest Corvinus College that the limits placed on the legal, economics and other social studies departments by the Orban government mean only those in exceptional circumstances are to be given the chance to join the economic and political elite.

Through its words and deeds the Hungarian government devalues knowledge and expertise.  Its decisions are made without broad consultation or the involvement of experts, with the exclusion of openness.   Europe must see that the Hungarian government intentionally, deliberately and systematically abandons the values of a democratic Europe and the declared goals of the European Union.

In light of the above, we ask that the European Union more determinedly stand up for its own principles, and take action in every instance when the Hungarian government works against European values.

Translated by Éva Nagy

* * *

A few years ago Tibor Navracsics unabashedly admitted that he faithfully executes all tasks he receives from his superior. Let’s hope that he will be severely constrained if he tries to inject Viktor Orbán’s ideas into the EU’s educational and cultural policies. What is happening in Hungary in these fields goes against everything the European Union stands for.

Barroso in Budapest

José Manuel Barroso, the outgoing president of the European Commission, spent a day and a night in Budapest on the way to Ukraine. During his stay he and Prime Minister Viktor Orbán signed a “partnership agreement” that seals the European Union’s 35 billion euro financial support for Hungary for the period between 2014 and 2020. In addition, he received an honorary doctorate from Corvinus University.

In the last few weeks a debate has been going on between the government and the opposition: is the amount Budapest will receive in the next six years more or less than it got in the previous six years, support that was procured by the Gyurcsány government? Of course, the current government claims that it is more while almost everybody else, including financial experts, claims that it is less. Whatever the case, it is an enormous amount of money which, according to the critics of both the Orbán government and the European Union, enables Viktor Orbán to build his “illiberal state.” In brief, the European Union is the one that is supporting the destruction of democracy in Hungary.

People who oppose the current regime were dismayed when they heard that the official signing of the document will take place in Budapest. They argued that Barroso should not sanction Orbán’s autocratic regime with his presence in the Hungarian capital. Deep dissatisfaction set in, not just in political circles but also among ordinary people who watched what they considered to be overly friendly gestures by Barroso toward Orbán. It is true that the president of the commission did make a quip indicating his awareness of the Orbán government’s untrustworthiness when he remarked that he hoped the content of the Hungarian version of the document is what he expects. In the past it happened several times that the Hungarian government falsified translations of official texts.

José Manuel Barroso and Viktor Orbán Source: Népszabadság / Photo Zsolt Reviczky

José Manuel Barroso and Viktor Orbán: We can feel equal financially
Source: Népszabadság / Photo Zsolt Reviczky

I don’t know whether Barroso was aware of what Orbán told journalists after the ceremony, but I hope that by now he is. Orbán explained to journalists why this enormous amount of money is not really extra help for Hungary. He claimed that foreign investors move approximately the same amount of money out of the country that Hungary receives from the European Union. If Hungary did not get these subsidies, the country’s financial equilibrium would be out of kilter. This reasoning is of course economically unsound, but his reference to equilibrium brought to mind a funny line from Nick Gogerty’s The Nature of Value: “The only economic systems found today that are truly at or close to equilibrium are nearly dead economies. A cow that achieves equilibrium is called a steak, and the economy closest to achieving equilibrium today is probably North Korea.”

Orbán proposed another equally unconvincing reason that Hungary needs these subsidies. They raise the self-esteem of Hungarians who can in this way feel like full-fledged members of the European community. It’s nice to know that Hungarians’ psychological well being depends on 34 billion euros. Considering that the mood of the Hungarian population is abysmal, perhaps the money is not so well spent.

Now that the Orbán government’s attacks on NGOs have been widely reported and almost all the articles compare the events of the last few months to what Vladimir Putin did in the last year and a half to Russia’s civic groups, a lot of people hoped that Barroso would have a few words to say about them. The COO of TASZ (Civil Liberties Union) told Der Spiegel that “Brussels no longer can be silent on the putinization of Hungary.” However, Barroso was silent on the issue until a question was addressed to him about whether the EU will get involved in the dispute between Norway and Hungary over the Norwegian Funds. Barroso expressed the opinion that this is “the business of Norway and Hungary, but they follow the developments.” The author of HVG‘s opinion piece seemed to be very unhappy with this answer, and I know many people who share his opinion. I, on the other hand, think this hands-off decision of the EU actually works in favor of those who would like to stop the Orbán government’s assault on democracy. From experience we know that the EU has not been a steadfast defender of Hungarian democracy, and in the past it overlooked Viktor Orbán’s transgressions more often than not. The Norwegians are less accommodating; ever since May they haven’t moved an inch in their insistence that the Hungarian government has no right to investigate the allocation of their civic funds. 140 million euros are at stake. If the EU agreed to arbitrate, most likely a compromise solution would be found that would again allow the Orbán government to play one of its tricks.

There was a small demonstration in front of Corvinus University. Népszabadság noted that Barroso as a seasoned politician knows how to handle situations like that. He acted as if he did not see them at all and marched straight into the building. Whether he read a letter addressed to him by the Oktatási Hálózat (Net of University Lecturers) or not I have no idea. It is an excellent description of what has been going on in Hungary in the field of education. To sum up: In the last five years government spending on higher education decreased by half. Hungary currently spends only 0.43% of GDP on it as opposed to the 1% that is recommended by the European Union. The autonomy of the universities will be curtailed when state appointed supervisors are placed above the presidents. It is now the fifth year that the government has no clearly stated higher-education strategy. Financial resources are distributed in an ad hoc manner, mostly to institutions preferred by the government. For example, 90% of the money received as part of the Horizon 2020 program subsidized by the European Union went to the newly established National Civil Service University. Just lately it became known that the Hungarian National Bank is spending 200 billion forints, which is one and a half times more than the government spends a year in higher education, to train people in “unorthodox economics.” Because of the high tuition fees the number of students entering college or university has decreased by 30%.  Moving away from higher education, the letter mentions the lowering of the compulsory school age to 16 from 18 and the government’s endorsement of segregated Roma schools.

It is too bad that this was the only letter addressed to Barroso. Where were the other groups? Where were the members of the opposition? Not that these letters achieve that much, but when only one group protests in front of Corvinus University and only one letter is written by a small group of university lecturers, it is difficult to stir the European Union.

After ten years Barroso is leaving his post and Jean-Claude Juncker is taking over. Hopes are high that a new era will begin, but for that to happen the Hungarian opposition must lend him a helping hand.

The European Union addresses rule of law issues: Hungary is center stage

Interestingly, it was The Irish Times that first got wind of the news that Vivien Reding, European Commission Vice-President responsible for Justice, Fundamental Rights and Citizenship, will announce a new mechanism to make it easier for the EU to deal with countries whose governments repeatedly abuse its judicial and legal framework and thereby threaten the rule of law in member states of the European Union. It is no secret that one of these countries is Hungary; the other is Romania. In Hungary, the Orbán government threatened the independence of the courts in addition to limiting freedom of expression. In Romania, Victor Ponta wanted to abolish the Constitutional Court altogether.

We knew, at least since José Manuel Barroso’s “state of the union” speech last fall, that the Commission was working on some kind of mechanism that would close the gap between repeated infringement procedures and the invocation of Article 7 of the Treaty of the European Union. Article 7 states that in case of serious and persistent breach “the Council, acting by a qualified  majority, may decide to suspend certain of the rights deriving from the application of the Treaties to the Member State in question, including the voting rights of the representative of the government of that Member State in the Council.” This is the most powerful weapon the EU has in its arsenal, but it has never been invoked because it is considered to be far too harsh. Leaders of the “rogue states” know that they will never face the threat inherent in Article 7. Accordingly, EU officials have pointed out that they either have to break the taboo concerning Article 7 or have to come up with alternative measures. Vivien Reding in the presence of President Barroso and Cecilia Malmström, Commissioner of Home Affairs, announced such an “alternative measure,” a mechanism that would close the gap between the lengthy and most of the time ineffectual infringement proceedings and the draconian but never used Article 7.

At first glance, the measures outlined by Vivien Reding seemed toothless to me. I was especially disappointed when I read about the “dialogue” the Commission will conduct with the government of any rogue member state. I recalled the endless dialogues between Brussels and Viktor Orbán that led nowhere while the Hungarian prime minister danced his peacock dance. But then I discovered a sentence that might give us hope. Reding said that “the Commission, as guardian of the EU treaties, also had to become the guardian of the rule of law in the Union.” They envisage an extension of the Commission’s competence.

The Commission will not deal with individual cases or miscarriages of justice, only with “systemic threats” to EU values. That is, a distinction will be drawn between individual infringements that don’t threaten the fundamental democratic structure of the state and grave, all-embracing changes that affect the entire body politic. As we know, in the last four years the Hungarian government fundamentally changed the whole “system.” In fact, Orbán only a few weeks ago admitted that the system that exists now is fundamentally different from what Hungary had prior to 2010. Indeed. Then Hungary was a democracy. Today it is not.

The photo Napi Gazdaság used for its article on the  Brussels's move against rogue states

The photo napi.hu used for its article on Brussels’ move against rogue states

How does the European Commission propose to deal with systemic threats to democracy? As a first step, it will collect evidence of “a systemic threat to the rule of law.” If such an assessment is made, “it will initiate a dialogue” by sending a “rule of law opinion” to the government in question. At that point the member state will have an opportunity to respond. In the second stage, “unless the matter has already been resolved, the Commission issues a ‘rule of law recommendation’ to the country concerned.” At this point the country will be given a fixed length of time in which to remedy the situation. These recommendations, unlike the “rule of law opinions,” will be made public. If the issue is not satisfactorily resolved, “the Commission can resort to one of the mechanisms set out in Article 7 of the EU treaty.” Whether this new three-tiered system ends up being as ineffectual as the former procedure remains to be seen.

The Hungarian media is in no hurry to report on this particular bit of news. Only two Internet sites published something on Vivien Reding’s announcement: Index and napi.hu. Both point out that the announcement is the consequence of the European Union’s endless and mostly fruitless struggles with Viktor Orbán’s systemic attack on the rule of law. Index specifically mentions Rui Tavares’s suggestion that the EU establish a new supervisory Copenhagen mechanism assessing member states’ compliance with the rule of law, fundamental rights and democracy. As you can see, the Copenhagen suggestion was not included in the proposal. Instead, the Commission itself assumed the role. Whether this is a better solution or not, I cannot determine.

In any case, the European Union made the first move. Of course, it will be many months before the new mechanism is in place, but I think that this time the Commission means business. Reding even announced “the need for an EU Minister for Justice taking the helm at a central level, giving EU justice policy a face and, of course, held accountable to the European parliament.”

Unfortunately, the European Union as it functions today is not a viable entity. Just as the Articles of Confederation turned out to be unworkable and had to be replaced by the Constitution of the United States of America. The European Union should realize that without a stronger framework, it will remain a toothless giant bogged down in intra-state struggles and endless bureaucratic wranglings.