Tag Archives: Orbán government

Amnesty International: Devastating report on Hungary

A few days ago Amnesty International (AI) released its 2015-16 report “on the state of the world’s human rights,” which includes a scathing analysis of Hungary’s record. Since the refugee crisis dominated public discourse in the European Union during this period, AI paid special attention to Viktor Orbán’s policies regarding the refugees who gathered at the southern border of the country. AI describes Hungary as a country that “led the way in refusing to engage with pan-European solutions to the refugee crisis” and opted instead to seal its borders. The report stresses the anti-Muslim rationale for Hungary’s refusal to admit refugees.

AI’s report deals with four problem areas: (1) refugees, (2) freedom of association, (3) discrimination against the Roma population, and (4) freedom of religion. The space devoted to Hungary is fairly long. It begins with the statement that, according to a report compiled by the Eötvös Károly Institute, the Hungarian Helsinki Commission, and the Hungarian Civil Liberties Union, “the replacement of judges of the Constitutional Court and the 2010 constitutional amendments undermined the Court’s independence.” Thus, the whole legal foundation of the country is flawed.

The report traces out the stages of fence-building and the amendments to the Asylum Law. AI comes to the conclusion that “the application of the law could lead to the violation of Hungary’s obligation of non-refoulement,” a practice of not forcing refugees or asylum seekers to return to a country in which they may be subjected to persecution.

The AI report also points to the fact that “NGOs critical of government policies faced harassment and threats of losing their registration.” The section on discrimination against the Roma lists several court cases, including the so-called “Numbered Streets” neighborhood in Miskolc, which is still pending because of the municipality’s appeal. As far as freedom of religion is concerned, the Hungarian government, although it should have changed the 2011 Church Law to comply with a 2014 European Court of Human Rights judgment, has done nothing and therefore “freedom of religion continues to be restricted” in Hungary.

It’s not a pretty picture, and Júlia Iván, director of Amnesty International Hungary, expanded the list of complaints by pointing out that the Hungarian government in the past six or seven years has done everything in its power to deny assistance to and protection of refugees. Moreover, the Hungarian government incited a level of xenophobia in its citizens that is becoming something of a record in the western world. “Trump, Orbán, Erdoğan, and other similar populists dehumanize whole groups of people and make them scapegoats,” says Salil Shetty, secretary-general of Amnesty International, as quoted in Magyar Nemzet.

I’m sure that those of us who are familiar with the refugee record of the Hungarian government could have anticipated the findings of AI. So I will move on to the Orbán government’s reaction to AI’s assessment.

No more than a couple of hours after the Hungarian media began reporting on AI’s analysis of the Hungarian situation Magyar Idők published an article about Amnesty International which, according to the Government Information Center, encourages “the violation of the law of illegal immigrants.” This is especially unacceptable because “the government is only trying to defend the rights of European citizens and Hungarian families.”

A few days later Magyar Idők continued its attack on Amnesty International. It repeated Fidesz’s accusation that George Soros, who helps fund AI, was behind the negative report on Hungary. It also speculated about another reason for AI’s negative view of the Hungarian situation. The bad report card was expected because the Hungarian parliament will soon debate the government’s new proposals on restricting the free movement of migrants whose status is still pending. Of course, this is a ridiculous accusation since such a lengthy report cannot be put together in a couple of weeks and the new government proposals are of fairly recent vintage.

Röszke, September 8, 2015 / Source: Magyar Nemzet / Photo: Béla Nagy

Today Magyar Idők once again returned to the topic of Amnesty International, arguing that last year the organization inundated the office of László Székely, the Hungarian ombudsman, with complaints. In one year the poor man had to deal with 7,500 complaints. Of that number 2,600 dealt with immigration. Only ten of these complaints came from Hungary, the rest arrived from abroad. Surely, Magyar Idők wrote, AI is behind this deluge of mail. Associates of the ombudsman’s office said that among the letters there were even some written in English, German, French, and Spanish. The associates proudly announced that all the complaining letters were answered in the appropriate language.

Reporters from the government paper confronted Áron Demeter, who deals with human rights violations for Amnesty International Hungary. Why does Amnesty International encourage its followers to write such letters? Demeter’s explanation was that HHC had asked the ombudsman to turn to Hungary’s Constitutional Court on the question of the government’s criminalization of irregular border crossings. They hoped that as a result of receiving so many letters the ombudsman would be moved to act. But the letters didn’t change the ombudsman’s mind. Magyar Idők’s reporter didn’t hide his disapproval of such “pressure tactics.” Demeter explained that ever since its foundation AI has undertaken letter-writing campaigns to authorities that keep innocent victims incarcerated. In many cases, he added, this tactic had proved to be successful.

That explanation didn’t impress Magyar Idők’s reporter, who kept repeating that the behavior of AI was unconscionable. Their letter writers burden the already overworked ombudsman, who is supposed to represent those citizens who have grievances and who seek remedies from the offending authorities.

Finally, I would like to call attention to a short video that records complaints of police brutality along the Serbian-Hungarian border.

If the stories are true, and I fear they are, one can only be ashamed of what’s going on in the “center of Europe,” as Hungarians like to refer to their country’s geographic position.

February 25, 2017

An EU prosecutor’s office would be a heavy blow to Viktor Orbán

I don’t think that anyone familiar with the Hungarian situation can doubt the economic ramifications of the institutionalized corruption of the Orbán regime. It retards growth and competitiveness and distorts the market economy.

A significant source for this institutionalized stealing is the EU’s convergence funds. Across the EU approximately 50 billion euros in funds distributed to member states is lost to fraud. The problem is especially acute in the former Soviet satellite countries: Bulgaria, Romania, and Hungary. The European Commission’s European Anti-Fraud Office (OLAF) gathers evidence of financial misconduct and prepares hundreds of judicial recommendations, but the prosecution rate is only about 30%.

If you think that this rate is pitifully low, you should take a look at the Hungarian situation. In 2015 OLAF investigated 17 suspicious cases, of which 14 were deemed serious enough for the organization to suggest that financial penalties be paid by the Hungarian government. As far as I could ascertain, in no case did the Hungarian prosecutors move a finger.

Yet hardly a day goes by without news of corruption. Ákos Hadházy, co-chair of LMP who has done the most to unearth corruption, asked Péter Polt, the chief prosecutor, to reveal the number of cases prosecuted since 2011. The answer was staggering. In only four cases did prosecutors bring charges. In monetary terms, in comparison to the billions most likely stolen, the sums involved were peanuts. According to their findings, the financial loss to the European Union was only 286 million forints, or 917,030 euros. Even though every day Hungary receives about two billion forints in EU convergence funds. Several notorious cases, like the street lighting business of Prime Minister Viktor Orbán’s son-in-law, were simply dropped.

For the EU, setting up a new organization–the European Public Prosecutor’s Office or EPPO–to investigate the fraudulent misuse of EU funds and inter-state or so-called carousel fraud is becoming an urgent task. In December I devoted a post to the subject, in which I reported first the reluctance and later the refusal of the Hungarian government to accept such a supranational body. We heard the old refrain: “the sovereignty of Hungarian prosecution might be undermined.” Moreover, goes the argument, since the Hungarian chief prosecutor is appointed by parliament, there might also be a constitutional problem. The latter excuse is truly laughable: almost never does the need for an amendment to the constitution cause any problem for the Orbán government.

Knowing the government’s heavy reliance on the good offices of the chief prosecutor in fraud cases, it was inevitable that Hungary would fight tooth and nail against EPPO. In the last couple of days the issue emerged again after an informal meeting of the justice ministers in Malta. Seventeen countries indicated they would participate in so-called “enhanced cooperation,” which is a procedure whereby a minimum of nine EU countries are allowed to establish advanced integration or cooperation within EU structures without the other EU countries being involved. Five countries, among them Hungary and Poland, opted out.

Justice Minister László Trócsányi self-righteously announced after the meeting that the Hungarian government’s main concern with setting up an EU public prosecutor’s office is its fear of weakening such institutions as Eurojust and OLAF, neither of which has prosecutorial powers. The former is merely a coordinating body that is supposed to improve the handling of serious cross-border crimes by “stimulating” investigative and prosecutorial coordination among agencies of the member states. OLAF can only make recommendations. Trócsányi had the temerity to claim that “these institutions have achieved remarkable results.” In the statement given to MTI, the Hungarian news agency, Trócsányi left open one possibility: “In case they want to establish a European prosecutor’s office, it should be created on the foundation of Eurojust.” As far as Hungary is concerned, “regulating the competence of such a body should require a unanimous vote.” This is in contrast to other countries “who believe that its establishment is possible by a qualified majority.”

Péter Niedermüller, DK member of the European Parliament, somewhat optimistically predicted that “the establishment of EPPO can be delayed but cannot be prevented.” We do know that the EU is reassessing its convergence program, perhaps as a result of all the fraud. Commissioner Věra Jourová, who is in charge of the project, has already indicated that there might be a modification of the rules governing the assignment of EU convergence funds. In plain language, if a member state receives more funds than it contributes to the common purse, it will get less money in the future. The European Parliament can institute “ex ante conditionalities” that would allow for such modifications. That would be a heavy blow to Poland and Hungary, the largest beneficiaries of the convergence funds.

You may have been wondering why I haven’t written about OLAF’s report on its investigation into fraud in the Budapest Metro 4 project, which was reported by Politico at the end of December 2016. It has been heralded as one of the biggest fraud cases ever in the European Union. OLAF recommended the repayment of €228 million to the EC Department of Regional and Urban Policy and €55 million to the European Investment Bank.

Although in the last month the Hungarian media has been full of accusations and counter-accusations, no responsible reporting of the case is possible for the very simple reason that the Hungarian government refuses to make the OLAF document public. As long as we have no idea what is in the document and we have to rely on the interpretations of János Lázár and Nándor Csepreghy, the number one and two men of the Prime Minister’s Office, and Budapest Mayor István Tarlós, who has definite ideas on the subject but admits that he hasn’t seen the report itself, we cannot possibly pass judgment on the case.

The investigation covers the period between 2008 and 2014–that is, two years of the Gyurcsány-Bajnai government and four years of the Orbán administration. The only thing we can say is that it is unlikely that all the fraud took place before 2010 and nothing happened under the new government, which is what the Orbán government claims.

Under the present setup these OLAF reports can be an instrument for political games. The establishment of a supranational European Public Prosecutor’s Office would help prevent the kind of situation that currently exists in Hungary with the latest OLAF report.

January 29, 2017

Momentum’s anti-Olympics drive has momentum

As is evident from the government media, the Orbán government is mighty upset over the early success of the Momentum Movement’s signature drive to hold a referendum on whether Budapest should host the 2024 Olympic Games. On the very first day of the campaign, Magyar Nemzet reported that people were queuing up and waiting a long time to be able to add their names to the list of those who believe that Hungary’s current financial situation doesn’t warrant such an extravagance. A host of problems remain in healthcare and education, on which in the last six or seven years the government has spent far too little money.

My hunch is that, initially, Viktor Orbán was not at all worried about Momentum’s anti-Olympics project. Two opinion polls had been held on the question, and the second one, after massive pro-Olympic propaganda, showed a slight majority supporting the idea. Therefore, I assume that the government decided to allow the signature drive in the belief that it would be a flop. Instead, here we are one week later and the activists have collected almost 70,000 signatures. Momentum has 30 days altogether to collect 138,000 signatures in favor of a referendum.

“No for the Olympics, yes for our future!”

Shortly after the beginning of the campaign, Magyar Idők must have gotten the word to begin a campaign of its own against Momentum and the opposition parties that decided to support it. Dávid Megyeri, a journalist for the government mouthpiece, tried to convince his readers and perhaps also himself that the opposition parties are actually committing “collective seppuku” by supporting Momentum’s anti-Olympics campaign, even if “they are hiding behind a phantom organization.” Megyeri’s imagination went quite far in assessing the dreadful consequences of this signature drive for the socialists. It is quite possible, he wrote, that the attack on the Olympics will be considered “a casus belli for MSZP’s voters.” He believes that the anti-Olympic drive “practically guarantees the disappearance of the remainder of the socialist party.” The “miniature” MSZP will fall into the lap of Ferenc Gyurcsány. The little fish will eat the big fish, concludes Megyeri. Perhaps a threat of this sort will further confuse the already confused MSZP leadership.

In fact, the most fervent supporters of Momentum’s drive are the activists of LMP, who collected an additional 10,000 signatures in a week. And who knows how many signatures were collected by the activists of the Two-tailed Dog Party, Együtt, and Párbeszéd. Magyar Idők tried to minimize the damage the drive’s success was causing by insisting that “the signature collection has lost its momentum.” That certainly does not seem to be the case.

Mayor István Tarlós, who initially was not too keen on holding the Olympics, by now has become a great fan, arguing that no sane person should sign the petition because Budapest will be the clear winner of the Olympic Games if Hungary gets the nod. After all, the construction of almost all the necessary buildings and stadiums as well as infrastructure improvements will benefit Budapest, while the government will take care of all the expenses. Of course, he is right, but the rest of the country, which lags behind the capital city in economic development, is not so enamored with the idea. Outside of Budapest enthusiasm for the Games is substantially lower than in the capital.

While the activists are doing a great job, the same cannot be said about the opposition parties. Let’s start with the opposition members of the Budapest City Council. LMP’s Antal Csárdi proposed that Budapest withdraw its bid for the 2024 Olympics. Of course, given the preponderance of Fidesz members on the Council, there was no way for Csárdi’s proposal to succeed. But at least one would have expected that the liberal-socialist members would vote for the proposal. Well, that didn’t happen. We are talking about thirteen opposition members all told, of whom only five supported the motion. Of the five MSZP members two voted for the motion, one abstained, one didn’t vote although he was present, and one voted against it. One DK member voted for it, the other against it. That will give you an idea about the state of the Hungarian opposition. Just as reflector.blog.hu remarked, “this is a sorry lot.”

Demokratikus Koalíció also showed itself to be totally inept and clumsy when the party decided “to help” the drive by setting up independent stations for non-Budapesters, letting them express themselves on the question of the Olympics even though they were not eligible to sign the petition. It soon became clear that DK, instead of helping the drive, was hindering it. Even the pro-DK nyugatifény.blog disapproved of the move that only confused people. After a day, the DK campaign was halted.

After the disastrous city council vote, the government media had a real heyday, pointing out the opposition’s double game. Pro-government journalists called attention to MSZP politicians who are now supporting the anti-Olympic drive but who earlier had enthusiastically endorsed hosting the Olympics. One of these “turncoats” was Ágnes Kunhalmi who, according to Origo, had said in 2015 that, if it depended on her, she would rather spend the money on education, but “the two together may give such strength to Hungary that it may set our country toward unparalleled successes.” She made crystal clear that she “supported the cause.” Rather embarrassing, I’m afraid, in light of her signing the petition on practically the first day of the drive.

Csaba Horváth, leader of the MSZP group in the City Council, was equally enthusiastic at the same event organized by the Hungarian Olympic Committee. However, Horváth is now trying to divert attention from this video interview available online. He made public the transcript of a speech he delivered at the council meeting on December 2, 2015. He now claims that he was the first one to suggest holding a referendum on the question of the Games. According to the transcript, Horváth said: “I believe in the Olympic movement; I believe in my politician friends; and above all, I believe that all Hungarians can unite for a good cause. However, the final decision should be based on the broadest possible consensus. Therefore, I suggest that we should hold a referendum on the question of the Olympics.” He apparently repeated the same sentiment in a letter addressed to János Lázár a few days later. Furthermore, on January 27, 2016, the opposition members put forth a motion about holding such a referendum, which was naturally voted down. By September 2016, he said, he was of the opinion that Budapest will not be able to accommodate the Olympics in 2024. But then why on earth did he abstain in the vote on Antal Csárdi’s motion? Typical MSZP waffling, I’m afraid. The party is loath to take a clear stand on anything.

Whether the Orbán government will actually allow a referendum even if Momentum and its allies get enough signatures, which by now is likely, remains questionable. Portfolio pointed out, however, that there is a good possibility that the International Olympic Committee will decide that support for the project is far too low in Budapest. In the past, cities were chosen only where popular support was over 65%, which is a far cry from the percentages measured by opinion polls in Hungary. In September 2015, only 41% of Hungarians supported the idea, according to Medián. Although the Hungarian Olympic Committee held its own poll, which showed a slight majority for supporters, most other polls indicate that only about 50% of Hungarians support a Budapest Olympics. In Paris, by contrast, popular support is 70%, while in Los Angeles it is 88%. I do hope that the International Olympic Committee will have enough brains to choose Los Angeles or Paris instead of a rather reluctant Budapest.

January 27, 2016

Conservative economists on Hungary’s prospects

It was exactly a year ago that I wrote about the “József Eötvös Group,” organized by a number of conservative economists and legal scholars. In the choice of its name, the group honors József Eötvös (1813-1871), who was minister of education in 1848 and again between 1867 and 1871. Eötvös, along with Ferenc Deák and István Széchenyi, is one of the few admirable nineteenth-century Hungarian politicians whose moderating influence was eventually overshadowed by nationalist politicians with little wisdom.

Eötvös was a writer of some renown who joined the turbulent political life of the 1840s. One of his political aims was the reform of the inhuman conditions of Hungarian prisons. He also worked on the theoretical foundations of a future Hungarian parliamentary system and made sure that it became part of the program of the opposition. He served briefly as minister of education in the Batthyány government (March-October 1848). When, after the Compromise of 1867, he became minister of education again, he was at last able to put his ideas into practice. In the first few months parliament passed his bill for the emancipation of the Jews. A short while later, he completed a reform of the Hungarian school system. Finally, the Nationality Law of 1868 became the law of the land, which was a liberal document at the time.

Robert A. Kann in his monumental book A History of the Habsburg Empire, 1526-1918, called Eötvös an enlightened man and added that “had Eötvös’s and Deák’s spirit prevailed, the Hungarian treatment of national groups might not have been inferior to that administered by the Austrian authorities.” Today we would call him a liberal conservative. He is a perfect fit for those liberal-conservative intellectuals who want to offer an alternative to Viktor Orbán’s populism. Interestingly, liberal members of MSZP turned to Ferenc Deák as their idol and established the Ferenc Deák Circle. The two groups are not that far apart ideologically.

The Eötvös Group holds regular open meetings on defined topics. A year ago, when I reported on one of the group’s meetings, the theme was the nature of Viktor Orbán’s system. The key speaker was András Körösényi, a political scientist, who described Fidesz’s world as a political system based on Viktor Orbán’s “oligarchic interests.” It doesn’t really matter where Orbán’s critics come from: their ideas are quite similar. For instance, the liberal Bálint Magyar describes the same phenomenon as a mafia state.

Source: index.hu

This time the topic was the sorry state of the Hungarian economy. While the government is in the midst of a campaign to sell the idea that the economy is booming, the two economists who delivered lectures at the meeting, Tamás Mellár and László Csaba, painted a different, quite grim picture.

It is perhaps telling that while a year ago only a handful of people were interested in the group’s lectures and discussions, this time the place was packed. In fact, extra chairs had to be added, and even then some people had to stand.

Tamás Mellár told his audience that ever since the 1970s for every 1% in economic growth 2.5% of funding has been needed. Thus, between 2001 and 2010, a 17% economic growth required 34% in additional funding. The situation became worse between 2010 and 2015 when, to achieve 10% economic growth, the country needed 35% in additional resources. Most of this came from the European Union, but some of the money came from the nationalization of the private pension plans, loans, and depletion of some of the foreign currency reserves of the Hungarian National Bank. That cannot go on, Mellár declared.

What does Mellár suggest after the removal of the Orbán government? As far as economic measures are concerned, a new government will have to abolish the flat tax introduced by the Orbán government and replace it with a progressive income tax. He would also introduce a wealth or equity tax on the total value of personal assets over a certain limit, which would be one possible way of recapturing some of the public wealth stolen by Orbán’s oligarchs. Instead of forced industrialization, the government should pay attention to new technologies, new business solutions, education, and research. But in order to see any change, Hungarians must break out of the apathy that currently exists in the country. “Now there is no Russian pressure anymore. This time we ourselves caused all this trouble, and we must be the ones who get us out of it.”

Although the government’s predictions for next year are optimistic, László Csaba sees little hope for the expected great economic growth. Interest rates in the United States will most likely rise, and who knows what Donald Trump will be up to. Meanwhile, there is the refugee crisis, populism, low economic growth in Europe, the Russian-Ukrainian conflict, slowing emerging markets, and unpredictable oil prices. One cannot count on European Union subsidies forever. Hungary must rely on itself.

He is convinced that “without comprehensive reform of the education system there is no hope.” The government should leave higher education alone. Instead of constantly reorganizing colleges and universities, the government should concentrate on kindergartens and elementary schools because these are the crucial years where students’ futures are decided. As far as the government’s economic predictions promising high growth are concerned, “they are completely unfounded.” Hungarian GDP at the moment, calculated in U.S. dollars, still hasn’t reached its 2008 level. This is worrisome even if it includes the fact that the forint is now weaker against the dollar. “We don’t have enough capital, we don’t have enough manpower, we spend too little on research and development, and the external environment is not favorable. In fact, the only increase we can expect is an increase in debt.” As for the government propaganda regarding recent tax reductions, it is a sham because for each tax cut there are many new increases elsewhere. “There is a feeling of hopelessness in the country.” He concluded his talk with a Seneca quotation: “If one does not know to which port one is sailing, no wind is favorable.”

Still, there are some hopeful signs. The Momentum Movement’s introductory meeting was filled with interested people. The young organizers urged the audience to ask them questions about their political plans. On the very first day the activists gathered 10,000 signatures of the mandatory 138,000 and by now they reached almost 40,000. People have been standing in line to add their names to the list. The government seems to be taken aback; they didn’t expect such an enthusiastic reception to an anti-Olympics drive. Therefore, attacks on the group began in earnest in the many government-financed newspapers and internet news sites. Since the topic of the Eötvös Group’s next gathering will be “Do we need an Olympics?” pestisrácok naturally discovered a close connection between the learned economists and the young political hopefuls, which apparently does exist. All in all, one can see some early signs of a societal awakening.

January 22, 2017

Vulnerable Democracies — An interview with János Kornai

János Kornai, professor emeritus at Harvard and Corvinus, is the foremost economist in Hungary today. Several of his books have been translated into English, including a book that made him a maverick in the tightly centralized planned economy of the 1950s titled Overcentralization in Economic Administration (Oxford University Press, 1959). He is also the author of Anti-Equilibrium (Amsterdam: North Holland, 1971; 2d ed., 1975 in English); Rush versus Harmonic Growth (Amsterdam: North Holland, 1972); Growth, Shortage and Efficiency (Oxford: Basil Blackwell and Los Angeles: University of California Press, 1982); Road to a Free Economy. Shifting from a Socialist System: The Example of Hungary (New York: W. W. Norton, 1990); Vision and Reality, Market and State: New Studies on the Socialist Economy and Society (New York: Routledge, 1990); The Socialist System. The Political Economy of Communism (Princeton: Princeton University Press and Oxford: Oxford University Press, 1992);  and By Force of Thought. Irregular Memoirs of an Intellectual Journey (Cambridge-London, The MIT Press, 2007), his autobiography. Professor Kornai has been awarded honorary doctorates from dozens of prestigious universities.

The online version of the interview that follows appeared in two installments in HVG on December 28 and 29. The first bears the title “Immovable powers, autocracies and their Hungarian variation.” The title of the second is “There is no way Viktor Orbán’s government can be removed peacefully.”

This interview, conducted by Zoltán Farkas, originally appeared in the print edition of Heti Világgazdaság, vol. 2016/41 (October 13), pp. 10-13. In the online version only Zoltán Farkas’s questions and János Kornai’s answers are presented. The Hungarian original also includes a map and a summary of the central ideas. The latter are not presented here as both are available in the longer paper “The System Paradigm Revisited” in Acta Oeconomica vol. 4, (2016). The interview was translated by Dóra Kalotai and Christopher Ryan. Zoltán Farkas and János Kornai are indebted to them for their careful translation.

Hungarian Spectrum has had the privilege of publishing a number of János Kornai’s shorter works in English, either in full or in summary form. For example, his essay on “Centralization and the Capitalist Market Economy,” “Threatening Dangers,” “Hungary’s U-turn,” and “Breaking Promises, The Hungarian Experience.” I’m grateful to Professor Kornai for permission to publish this interview.

♦ ♦ ♦

Source: HVG / Photo by István Fazekas

It was six years ago when you first wrote that many important basic institutions of democracy in Hungary had been dismantled, and Hungary had become an autocracy. Now, in a study recently published in Közgazdasági Szemle, you have already summarized the characteristics of autocracies. Has your previous premonition been proved correct?

I feel I have been proved completely correct. Usually, a researcher is filled with pride when he is among the first to recognize a tendency. My pride, however, is overshadowed by bitterness, because the fact that my predictions have come true makes me depressed and bitter.

But Hungary is not unique in this sense. You write that barely one-tenth of the population of the 47 post-socialist countries live in democracies and fifteen percent in autocracies, while the vast majority live in dictatorships. It’s almost as if democracy was the exception. Were we chasing illusions at the time when the regimes changed?

If we start from the knowledge that we possessed at the time of the regime change, based on the experience of democratization carried out in other countries, our hopes for a more successful development – compared to what actually happened – were not just an illusion. It is worth taking a look at the two largest countries, China and Russia. In the latter the elements of democracy were beginning to emerge, free elections were held, and under the leadership of Yegor Gaidar a liberally inclined government was formed. But it did not last long. Anti-democratic elements came to the fore, led by Vladimir Putin, who established his own autocratic system. Repression grew heavier and heavier. China is another story. Perhaps for a while it was not only an illusion that it was, even if slowly, making progress towards democracy. The example of Taiwan is well-known: a tough dictatorial system gradually turning into a democracy. But in China events did not take this turn. How a regime defines itself is always revealing; according to the Chinese regime, theirs is “a socialist market economy with Chinese characteristics.” In my interpretation, on the other hand, China’s system is a capitalist one, even if the ruling party calls itself communist. And politically they have a dictatorship: a one-party system, without elections, with terror. Among countries that changed their regime, democracy has stabilized in very few places as well as it has in the Baltic states. Since 2010,  many fundamental institutions of democracy have been demolished in Hungary, and an autocratic regime has come out on top. Poland has taken the first steps in the same direction, but that particular match has not yet been played out. The abandonment of democracy is a threat in the other post-socialist countries of Central and South-eastern Europe as well.

Which are the characteristic features of autocracy, the marks that set it apart?

Before anything else, I have to say that there is no consensus on the interpretation of democracy, autocracy or dictatorship among political scientists, politicians and people working in the media. There is complete conceptual chaos; I can’t even begin to hope things can be put in order here. Thus I shall undertake a more modest task: I would like to supply my readers with a sort of explanatory glossary of what I mean by these expressions. The main distinguishing characteristic of autocracy can be linked to Joseph Schumpeter, one of the most significant thinkers of the 20th century. Many authors, among them Samuel Huntington, follow his lead in viewing democracy as a procedure: a course of actions in which the government can be removed in a civilized way: legally, without bloodshed. This is in contrast with non-democracies, in which the change does not take place in a civilized fashion, nor does it usually happen without blood being shed. For instance, the tyrant is assassinated, or his regime is overthrown by a palace revolution. An example of the latter case was when the First Secretary of the Soviet Communist Party, Nikita Khrushchev was removed from power by his opponents within the Party. In other places the change of regime happens in the wake of a military coup or when a revolution by the masses threatens. If the government cannot be removed or is, to use an everyday phrase, cemented in place, there is autocracy. Schumpeter and others following him, myself included, restrict the name democracy to that politico-governmental form, and only that form, which guarantees that the government can be voted out of office. This is the minimum requirement. The other point is that in an autocracy the ruling group dismantles those checks and balances which would offer a realistic chance of forcing the government to correct its mistaken measures between two elections, and of changing the government at elections.

Fareed Zakaria defined as ‘illiberal democracies’ those systems in which the government came to power via legal elections, and has maintained the outward forms of democracy, but has systematically dismantled the checks and balances. You maintain that there are no illiberal democracies. Why?

When he first wrote about the topic Zakaria did not concentrate on the possibility of voting out the government, but rather on how the majority voted during the election, and on how the winners would uphold certain democratic structures later on, but dismantle others. When the Hungarian prime minister introduced the concept of illiberal democracy into public discourse at Tusnádfürdő, Zakaria, disagreeing with Orbán’s interpretation, refined the explanation of the notion. Personally, I consider this concept a dead end: illiberal democracy is like an atheist pope: the adjectival structure itself is contradictory. In my view all democracies are liberal. I lost my taste for concepts of democracy with an adjective when the communist dictatorship referred to itself as a ‘people’s democracy’, clearly distinguishing itself from the so-called ‘bourgeois’ democracies. But let us return to the significance of checks and balances. Let’s consider the case of President Nixon in the United States, who felt inclined to ‘consolidate’ his position, and had his political rivals bugged, but after being exposed was unable to get his Republican party colleagues, the attorney general or the chairman of the House Judiciary Committee to stop the proceedings against him. The representatives were not bound to a ‘party line’: they wanted to find out the truth – the checks and balances functioned. These are necessary in a democracy. Just like a free press, in which the voice of the opposition is at least as powerful as that of the government. At the same time, it is also true that democracy is vulnerable because the enemies of democracy can also make use of fundamental rights – the freedom of the press, the rights of assembly and association. Those who have built an autocratic order have learned from this. They do not allow themselves the luxury of being voted out at an election where there is the real possibility of a variety of outcomes.

But if this is so, why is it not a dictatorship?

Dictatorships and autocracies do share some common features. One is that in every important issue; indeed, often even in less significant matters, it is the leader who makes decisions. But there are also significant differences. A dictatorship abolishes the multi-party system by law as well. The opposition is not weak; it is non-existent. It is driven underground. In contrast, opposition forces are allowed to function in an autocracy. Autocracies also make use of intimidation, but they do not go as far as extracting confessions by torture or executing large numbers of people. Many people have good reason to be afraid in autocracies as well because they may be thrown out of their jobs or become victims of character assassination; maybe they will be arrested on trumped up charges. But anybody who believes that there is only a difference of degree between autocracy and dictatorship has not yet lived under a dictatorship. Having said this, autocracies do have a tendency to turn into dictatorships. Maybe modern Turkey will illustrate this, almost before our very eyes. We shall see whether they reach the stage of complete, total dictatorship.

You did not list nationalism as one of the characteristics of autocracy. In Hungary, however, one has the impression that they go hand in hand.

I tried to mention only those characteristics of autocracy that appear exclusively in this political-governmental structure; that is, the features which differentiate it from democracy and dictatorship. An obvious counter-example would be corruption, which can be observed in all three types. Innumerable cases of corruption crop up in certain democracies, while there are puritan dictatorships in which money cannot buy everything. Unfortunately, nationalism is another anomalous phenomenon: democracy does not make us immune to it. One of the most tragic examples of this is the period of World War I, when a wave of nationalism swept through both sides; through both of the coalitions that were to go to war against each other. It was a nationalist thirst for revenge that was at work in the politicians of Western European democracies when they imposed humiliating and impossible peace terms on Germany. In this context, to take a great leap through history, the Trump phenomenon is worth mentioning. One of the great parties of the United States nominates the extreme nationalist Trump for the presidency. Even if he does not win the elections, the political camp that supports him will remain strong, and because the United States is a democracy, they will make their voices heard. Recently, a strong wave of nationalism has been felt in Great Britain as well.

What is your impression of Hungarian nationalism?

I am really worried about it getting stronger, not for myself, but for the future of the country. Because I do not deny that in Hungary autocracy and nationalism go hand in hand. An autocrat is indeed able to turn the wave of nationalism to his own advantage; Trump is doing the same. The main element of his rhetoric is xenophobia, especially against Latin Americans. He adds that the gates are too wide open also to immigrants from overseas, and rejects President Obama’s suggestion that ten thousand Syrian refugees should be allowed to the country. By the way, communist dictatorships that advocated internationalist theories were nationalistic as well. Non-Russian minorities were oppressed in the Soviet Union, and the same can be said of non-Chinese ethnic groups and speakers in China. Nationalism exists in both dictatorships and democracies, not only in autocracies.

In this conceptual framework why do you define Viktor Orbán’s system as an autocracy?

Because it bears in itself all the important characteristics of autocracy, both its primary and its secondary features. This period started with the leader announcing that he intended to establish a system which would last for at least ten or twenty years. He declared that he wanted to cement himself in place. Since the day he came to power, he and his party have been continuously dismantling the system of checks and balances. Not like in a revolution, when they take over every powerful position at the same time, but step by step. Every week, something has happened. One of the first things they did was to reduce the Constitutional Court’s sphere of authority and pack the Court with people connected to Fidesz. Then came the new media law, which created almost endless opportunities for government propaganda. They also took over a significant part of the private media. The bureaucratic dismantling of checks and balances is combined with the use of market methods. The process culminated in the changing of the law on elections.

You write that the interplay of anti-market and anti-democratic elements has formed Orbán Viktor’s system into a coherent one; the mechanism of the state does not work according to the rules of the capitalist market economy. So how does it work?

Even in democracies it is taken for granted that the market cannot be left entirely to its own devices: there is not a single economist with any common sense who would oppose some regulation here and there when there is a real reason for it. In cases of monopoly, state regulation is clearly necessary. Even then, mistakes can be made. For example, the authorities may set prices too high or too low because they don’t understand the situation or are incompetent. Too high, and whoever is running the monopoly will make a handsome profit; too low, and they will make a loss. It is possible for regulation to be done badly as a result of incompetence, but it can also happen if other people’s interests, for example. cronies’, are prioritized. A business can be ruined through regulation so that a friend or client can buy it up cheaply. The tendency towards regulation that is not compatible with the functioning of the market is one of the characteristics of an autocracy. The Hungarian government exercises far more regulatory power than would be reasonable. There are numerous possible underlying motives for their unnecessary, excessive and – not infrequently – distinctly damaging interventions. On the one hand, the central authorities wish to extend their power across as many activities as possible. The knowledge that “I control everything: nothing can happen without me” is a very powerful motivation. An equally strong motive is the need to court political popularity, to make populist promises.

What are the results when autocracy works this way?

It is a mistake to believe that there are so many things wrong with the economy, that because of the numerous incompetent and biased interventions it functions so erratically, that it is bound to collapse in the end. This may happen, but it is by no means bound to happen. A state that gets along badly with the market does not push the economy over the edge into catastrophe; it just makes it harder for it to fulfill its potential. It will not be innovative enough, not competitive enough; it will lose the best experts. This will become obvious only in the long run. The trams still run, only more rarely, the teachers complain, but teaching doesn’t stop, health care is beset by dire problems, but they still try to look after patients in hospitals. It is not that the economy is unable to function, only that it fails to achieve as much as it could. As a result, it falls behind its rivals, behind those countries where the state and the market work together in greater harmony, where people involved in the economy discuss what they have to do, where they listen to people before passing laws that affect them. In the past, I had many arguments with people who claimed that the Soviet economy did not work. The truth is that it did not collapse until the very end: it functioned, however badly and inefficiently, in spite of all the well-known, serious inadequacies and problems. It fell further and further behind its historic rival, the capitalist West. The question arises: does the state play a lesser role in a democracy than in an autocracy? At any rate, it would never occur to anybody in the U.S. or the Scandinavian welfare states that education should be brought under the control of a single center, as has happened in the Hungarian autocracy.

Every day we hear Fidesz trotting out some of the well-known catchwords of socialism. They promise full employment, they consider state ownership superior; they utter anti- profit slogans. Are they leading the country back to socialism? Is that what they want to restore? Even in a different form?

I do not see any danger of this. At the time of the regime change, people used to say “You can make an omelet out of an egg, but an omelet will never turn back into an egg.” Whatever happened is irreversible. Autocrats coexist happily with capitalism. Indeed, it is the only system they can really coexist with because they make use of the opportunities offered by capitalism to maintain their own authority. Looking at it from the other side, some capitalists are attracted to stable and authoritarian governments. Many western or multinational companies that have set up shop in China would not like the situation there to change. It is just the same in Hungary. Anybody who enjoys special advantages in public procurements and certain tenders, in the opening times of shops or the purchase of raw materials, who can count in bailouts if they get into financial difficulties, they are having a good time. In autocracies, given the private economy, a wide circle of clients can be built up from the supporters of the system who receive financial support. They can pay for these favors if and when the time comes. Far from wishing to bring socialism back, this regime gets on very well indeed with capitalism.

Has this system reached a point where the government can no longer be voted out of power?

Only the historians of the future will be able to answer that question. If it turns out that the government can be removed peacefully, in a civilized way, in the voting booth, then I have been wrong. I’m not making any predictions. What I can say is this: in Hungary, the regime has done and will continue to do everything possible to make itself irremovable. I hope you will not misunderstand me: the last thing I want to do with my analyses is to discourage those who are prepared to fight to change the situation. People for whom the values of democracy are important: individual autonomy, freedom of speech, freedom of the media and press, constitutionalism, legality, rule of law–they should not make their behavior dependent on the likelihood of change. They should not lie low during these years, but they should act, in their own ways, using the methods of their choice.

December 29, 2016

OLAF finds irregularities–fraud and possible corruption–in the Metro-4 megaproject

So what else is new? Politico reported that the European anti-fraud office, OLAF, after looking into the financing of Budapest’s fourth metro line, found “serious irregularities—fraud and possible corruption.” OLAF recommended, because it has no authority to do anything else, that Hungary return €228 million to the European Commission and €55 million to the European Investment Bank. OLAF’s investigation covers the period between 2006 and 2015. As Politico noted, this period spans not just the two Orbán administrations “but also two Socialist-backed governments that ruled between 2004 and 2010.”

I have already written about the difficulties surrounding the building of this new metro line, so I will not recount the story here. Suffice it to say that when the line was eventually finished, it bore little resemblance to the original plans. It was only about 7 km long, running between the Kelenföld train station in South Buda and the Eastern Station on the Pest side. Originally, it was to run all the way to the outer sections of the city in Bosnyák tér, but because of financial difficulties the second part of the project was abandoned. As a result, the line is severely underutilized. And its cost was enormous. Benedek Jávor, Párbeszéd MEP, considers the project as it stands now “completely senseless.”

It is difficult to come by hard figures, but Politico puts the total cost of the project at €1.7 billion. According to the Hungarian version of Wikipedia, the cost was 450 billion forints, of which 180 billion came from the European Union and almost 170 billion from the central government. The City of Budapest contributed about 70 billion. The balance most likely came from the European Investment Bank.

As soon as the news of OLAF’s findings reached Budapest the debate began over who the guilty party is. The government’s first reaction was that it had absolutely nothing to do with the project. Everything was handled by the City of Budapest. (The City of Budapest, I would note, didn’t get a copy of the 104-page report OLAF sent to the government.) According to Lord Mayor István Tarlós’s office, as far as they know all the irregularities occurred between 2006 and 2010. So, the Gyurcsány and Bajnai governments and Gábor Demszky, former lord mayor of Budapest, are responsible for all the “irregularities” while the Orbán government is blameless. This is hard to believe.

Since the government has not released the OLAF report, we are in total darkness about the nature of these “irregularities.” I am, however, somewhat suspicious about their alleged timeline. For starters, it was only in September 2009 that the European Commission made the decision to finance the first 7-km section of Metro-4. Of course, that doesn’t preclude the possibility that fraud and corruption occurred before that date. Most likely it did. We know only too well how business is conducted in Hungary, especially when it comes to the prospect of “free money” from Brussels.

As you can see, no money was spared on the appointments

What strengthened my suspicion of the Orbán government’s culpability in this affair was an article that appeared in the government mouthpiece Magyar Idők only a few hours ago. The title of the article is telling: “Brussels wants to saddle Orbán with the affairs of Medgyessy and Demszky.” Brussels, it would seem from the headline, is pointing the finger at Orbán. Perhaps in anticipation of such a finding, the Orbán government set out to shift the blame to Medgyessy and Demszky.

Péter Medgyessy was prime minister of Hungary between 2002 and 2004. After his political career ended, he returned to his consulting business and in this capacity received 597,000 euros from the French company Alstom in 2006, the year when the final decision was made by the City of Budapest to buy Alstom cars for the new metro line. In December 2014 Alstom was found guilty of paying more than $740 million in bribes to government officials around the world.

A few months ago Hungarian authorities began an investigation into the connection between Medgyessy and Alstom. The final verdict on Medgyessy’s innocence or guilt has not yet been reached, but even if it turns out that he lobbied the Demszky administration on behalf of Alstom, for which he received money from the company, it is unlikely that OLAF considers this something for which either the Hungarian government or the City of Budapest is responsible. Unless, of course, they can prove that Medgyessy tried to bribe the officials responsible for the decision to buy Alstom cars. It seems, however, that the investigative committee set up by the Budapest City Council in September has been singularly unsuccessful in proving that any of the lobbyists tried to bribe those responsible for the decision. The final report of the committee has not been published yet, but probing questions by the right-wing media to Fidesz members of the committee have failed to unearth anything about money exchanging hands in connection with the purchase of the Alstom cars.

We can’t expect any information on the OLAF investigation from official sources for months. But, just as in the past, it can easily happen that the document will be leaked to the Hungarian media. After all, Politico is in possession of certain material already. Until then it’s a guessing game.

December 22, 2016

Hungary quits the Open Government Partnership in a huff

Yesterday the Associated Press reported the Hungarian government’s decision to quit the Open Government Partnership (OGP), “a multilateral initiative that aims to secure concrete commitments from governments to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance.”

OGP was formally launched on September 20, 2011, when the eight founding governments (Brazil, Norway, the Philippines, South Africa, the United Kingdom, and the United States) endorsed OGP’s Declaration and announced their countries’ action plans. Since 2011, 62 other countries joined, including Hungary, which signed its letter of intent on July 10, 2012. In this letter of intent the Orbán government declared that “it attached the utmost importance to cooperation with civil organizations.” It was the Ministry of Public Administration and Justice under Tibor Navracsics that represented the Hungarian government in this particular undertaking, which claimed at the time that “it supports the effective implementation of the OGP commitments.” It also promised “in person consultations with the civil organizations and experts regularly on a monthly basis.”

These were the promises, but according to the recollections of the participants, after the initial good working relations “the process started to slow down as the document reached the political level.” The final commitments were vague and greatly weakened. By 2014 it was clear that the Hungarian government’s “sole purpose with its membership was the opportunity to communicate its devotion to open government” to the international community.

Hungary is the second country whose government is not ready to abide by guidelines set by the Steering Committee of OGP and endorsed by them. The first country to leave OGP was Putin’s Russia, which had joined the organization in April 2012. A year later, on May 17, 2013, the Russian government informed the group of its decision to leave. Russia’s participation in this group was dubious from the very beginning, but there were other countries whose commitments to the ideals of OGP were also questionable. OGP acknowledged in February 2014 that Lithuania, Malta, and Turkey had failed to meet their commitments as members of the Open Government Partnership. Warnings were issued to these three states. In addition, the Steering Committee redefined standards for suspending members. “Two warnings in a row would trigger a discussion about continued membership of OGP countries” that create hostile environments for civil society.

By October 2014 new rules were in place that made suspension of membership practically automatic if any country limits the freedom of information; limits the activities of civic groups; favors civic groups attached in some way to the government; limits the freedom of expression and freedom of assembly; limits freedom of the press, independence of the media, or engages in the intimidation of media owners. 444.hu’s eagle-eyed reporters noted the OGP’s tightened rules for suspension, adding that they are tailor-made for Viktor Orbán’s Hungary.

The first victim of the new suspension rules was Azerbaijan. In March 2016 the Criteria and Standards Subcommittee recommended the move because “such constraints are evident in the laws on grants, non-governmental organizations, incarceration of NGO activists and journalists” that would precipitate “OGP’s response policy.” At that time, it was noted, “similar NGO complaints that the Hungarian government is restricting civil society remain under consideration.” In addition, Turkey was suspended in September 2016 because it had failed to deliver a National Action Plan since 2014.

Prior to this time the Orbán government had begun a war against Hungarian nongovernmental groups, financed mostly by the Norway Grants but also by the Soros Foundation. The government accused these NGOs of representing foreign interests and proceeded to raid their offices. At that point four leaders of NGOs decided to follow their colleagues in Azerbaijan and launch a formal complaint against the Orbán government. Fanny Hidvégi of the Hungarian Civil Liberties Union, Sándor Léderer of K-Monitor Watchdog for Public Funds, Miklós Ligeti of Transparency International Hungary, and Júlia Keserű of the Sunlight Foundation wrote a letter to the members of the OGP Steering Committee. The letter is available on the internet.

After considering the complaints submitted by Hungarian NGO leaders, OGP proposed several remedies that the Orbán government should adopt. It suggested the establishment of a Permanent Dialogues Mechanism (PDM) within sixty days that would ensure the participation of the relevant government agencies and interested civil society organizations. What must have especially irritated the Orbán government was that “all members of the public will be kept informed about all core aspects of the national OGP process—and especially know well in advance … about the key moments to provide inputs and discuss priorities.” OGP demanded five so-called Smart Recommendations that the Orbán government would never accept: monitoring of public disclosure practices of local government and state-owned enterprises; reviewing party and campaign financing regulations; revising the freedom of information regulations; revising regulations on classified information; and launching e-procurement. For easy access to this document, I am attaching it in full at the end of this post.

After reading these “recommendations” I’m not at all surprised that the Orbán government accepted the odium of withdrawal. A semi-autocratic, illiberal government of the kind that exists in Hungary today would never agree to such demands.

So, let’s see how the official government media explained the decision. Magyar Idők justified the Hungarian decision by citing OGP’s “one-sided criticism” of the Orbán government based on the unfair accusations of “civilians financed by George Soros.” These NGOs serve foreign interests and have been spreading false stories about the Hungarian government. Transparency International and TASZ, the Hungarian equivalent of the Civil Liberties Union, had complained to the organization about the Orbán government already in October 2012, shortly after Hungary joined OGP. In January 2013 K-Monitor allied with TASZ and TI in a new attack. And here was the latest one. It was high time to quit this unfair organization.

In the opinion of Szilárd Németh, deputy chairman of Fidesz, Hungary’s abandonment of the organization “actually sheds a very positive light on us because we do not want to participate in an organization where members carry on a conversation among themselves after which they single out somebody whom they are trying to keep at bay with one-sided reports, distortions of facts, with documents prepared by phony civil organizations mostly financed by George Soros.” It was a good decision, “a lovely gift for the time when they can get together again and they can nod against Hungary.” Németh is referring to the Open Government Global Summit, which is being held at this very moment in Paris.

The opposition’s interpretation of the move was predictable. They pointed out that the Orbán government no longer cares what the world thinks of it because surely, following in Russia’s footsteps, they are practically admitting that they are corrupt to the core. Zsolt Gréczy, DK’s spokesman, said that Hungary’s eventual suspension from the organization was inevitable. But the country’s withdrawal from the organization a day before the beginning of the Global Summit was unnecessary in that Hungary was not facing suspension at this time. The demands the organization made on the Orbán government, however, were more than the “proud Magyar” could stomach.

♦ ♦ ♦

December 8, 2016