Tag Archives: Sándor Csányi

The ethos of Hungarian football

The current Hungarian political landscape is a wasteland. Almost nothing is happening. Half of the government seems to be in France, and the rest of the country talks of nothing else but the Hungarian national team’s surprisingly good showing at the European Championship. Since 1972 no Hungarian national team had been good enough to even participate in these games, so the national delirium is understandable. Today I’m going to look into some possible explanations for the sorry state of the sport in Hungary in the last thirty years or so.

Hungary was once a powerhouse of football, but today economic realities make it highly unlikely that it will ever return to its former glory. Hungary simply doesn’t have the kind of money necessary to finance a top-flight team. Each player has his own price and, according to Andreas Möller, the recently hired assistant to Coach Bernd Storck, the market value of the Hungarian national team today is the lowest of all the teams playing in France. One reason for this low number is that a fair number of the athletes play for Hungarian and Polish clubs, which are lesser known and valued and hence pay lower salaries. (Or they pay lower salaries, hence they are lesser known and valued.)

But it seems that there are other problems in the world of Hungarian football that have less to do with money and more to do with the circumstances created by the leaders in the sport. I read an interview with a player who felt so neglected in his Hungarian club that he packed up, moved to Austria, and today is a member of the Austrian national team. For one reason or another, his coach in Hungary didn’t appreciate his talents.

One shouldn’t think that this young man’s case was unique. A couple of months ago Storck, the new coach of the Hungarian team, made the mistake of asking why a certain young player from the Puskás Academy was being ignored when he is very talented. Storck was immediately rebuked by the coach of the Academy, who announced that all decisions are his responsibility and he doesn’t appreciate advice, even if it comes from the coach of the national team. László Kleinheisler, the hero of the Hungary-Norway match, was a member of Videoton, where he was completely neglected although again he is apparently a very talented player. To everybody’s amazement Storck picked him to be a member of the national squad. Criticism immediately followed this “rash decision” on Storck’s part.

Over the years, reading the Hungarian media, I couldn’t help noticing that the coaches of the national team came and went with frightening frequency. Today I sat down and counted: nine coaches in ten years. One of these, Sándor Egervári (2010-213), gave an interview to Sport TV in October 2015, shortly after Storck was hired and had just made the decision to change the entire staff he inherited from his predecessor. Egervári said in the interview that “we trained [the players] for second place because for us second place meant moving further up.” Well, I don’t know about football, but in other sports the coach wants his team to win and not be satisfied with second place. In the interview he had to admit that “unfortunately in the last half year” when he was the coach, the Hungarian team lost its second position.

In the rest of the interview he expressed his misgivings about Bernd Storck who, in his estimation, is a divisive personality, which will be detrimental to the squad’s cohesion. He called Storck’s decision to hire an entirely new training staff “horrifying” because the old staff “knew the circumstances that exist in Hungary” and they were the ones who could help the players. He went on and on until it finally became evident that what Egervári really objected to was that the new coach was not a Hungarian. Someone coming from the outside cannot get to know the players, he said, adding that “we are Hungarians in an emotional sense” and thus, I gather, a German will never understand the Hungarian psyche. Never mind that the mostly Hungarian coaches in the last thirty years hadn’t achieved anything. The final message of Egervári was to “go with the flow,” don’t change anything, permanence is something to be cherished. But the trouble is that in this context permanence meant failure.

Storck’s daring moves and his assessments of player talent were largely responsible for the achievements of the Hungarian national team, but the second man who should be applauded is Sándor Csányi, president of the Hungarian Football Association, who backed Storck up through these last few months. He told Storck that he had a free hand in deciding with whom he wants to work. He also defended the coach against the leadership of the Puskás Academy.

In October, right after Egervári’s attack on him, Storck explained his decision to change the entire staff only a few months before the beginning of the games. He explained that the members of the old staff worked only half-time, and Storck is apparently the kind of guy who works 24/7. Also, he had his own ideas about the game and needed people who could understand and share his vision. As for the risks, he said there are times when one has to take risks. A few days ago he again elaborated on the lack of daring of Hungarian football players as well as their lack of self-confidence and a will to win. “It is hard to convince the players that they should raise their heads, look their adversaries in the eye, and be proud that they wear this uniform.” Just as we heard Egervári say that he would be satisfied with second place, apparently leaders in the Hungarian world of football kept telling Storck and Möller before the game against Norway to “play for a tie.”

Zoltán Stieber celebrating his goal at the game against Austria

Zoltán Stieber celebrating his goal at the game against Austria

I’m not sure, but I have the feeling that Storck is paying a lot more attention to analyzing the techniques of the adversaries than his predecessors did. He believes that there is never enough study of earlier games. Each player receives a detailed account of the strengths and weaknesses of their adversaries. The staff works out a complete plan for the coming game. With a part-time staff I wonder whether such thorough prepping was possible. Most likely not.

Of course, one swallow doth not a summer make, but Storck and Möller are committed to staying in Hungary until at least 2018. The question is how hard a time they will have changing the fundamentals which, like so many other things, would need a total makeover.

June 21, 2016

Viktor Orbán and FIFA’s Sepp Blatter

The international media noticed that Vladimir Putin and his sports minister warmly greeted the controversial reelection of Sepp Blatter as president of the Fédération Internationale de Football Association (FIFA). They missed a short Hungarian-language message from Viktor Orbán on Facebook. The Hungarian prime minister wished Blatter, who was reelected for the fourth time as president of the powerful and corruption-riddled FIFA, “continued good work.” Blatter’s success was short-lived. Five days later he announced his resignation, which will take effect at an extraordinary congress, probably in December. The reason for Blatter’s change of heart is that he is being investigated by U.S. prosecutors and the FBI.

Viktor Orbán’s congratulatory note was especially curious because Sándor Csányi, president of the Magyar Labdarugó Szövetség/Hungarian Football Association (MLSZ), had earlier made it clear that Blatter would not get his vote. Why would Orbán go out of his way to make his strong support of Blatter public?

Blatter and Orbán go back a long way. I traced their cooperation to 2006, when the idea of establishing a FIFA award honoring Ferenc Puskás first came up. Apparently, the original idea wasn’t Orbán’s, but when he heard about it he moved into high gear with the help of Mrs. Puskás, who is apparently a personal friend of Blatter. The initial idea was completely reworked until, in 2009, the first Puskás Award was given to the player, male or female, judged to have scored the most aesthetically significant or “the most beautiful” goal of the year.

The Puskás Academy was heavily involved in the negotiations right up until the time, on October 20, 2009, the contract between FIFA and Mrs. Puskás, who has the right to the use of the Puskás name, was signed. It was signed in Felcsút by the great Sepp Blatter himself. Nemzeti Sport, Orbán favorite sports paper, proudly announced that Blatter’s presence was no ordinary event. Normally, such contracts are signed by one of his subordinates. Of course, Viktor Orbán, the founder of the Puskás Academy, also delivered a speech in which he declared that “this event is like a goal that delivers the victory.” Blatter received the flag of the Puskás Academy as a memento. The first time the award was presented was on December 21, 2009, at the FIFA World Player of the Year Gala, to which Viktor Orbán was invited. From this time on, Orbán has traveled to Zurich every year to be present at the award ceremony.

In 2011, when Hungary held the presidency of the European Union, Orbán took advantage of his position and visited practically all the countries of the Union. He also made an official visit to FIFA, at Blatter’s invitation, during which “he held talks” with Blatter about “the differences of opinion between FIFA and the European Union.” He promised the FIFA president that he would do his best to convince the EU to change some of the rules concerning the employment contracts of football players. At that point Blatter was seeking reelection but Orbán refused to commit himself one way or the other because, as he put it, “it is better that politics holds its distance from professional football.” He added, however, that “the world of football is not ready to have its leadership move outside of Europe.” Blatter’s challenger was Mohamed Bin Hammam, the president of the Asian Football Confederation.

In 2012 Orbán convinced Blatter to hold FIFA’s 64th congress in Budapest. Hungary had hosted this event only twice before in the 108-year history of FIFA: in 1909 and in 1930. Sándor Csányi, Orbán’s appointment really, had just become president of MLSZ, and in his speech he talked about the fantastic achievements of the previous two years of Hungarian football. “Yearly, we build 200 football fields, 1,000 amateur clubs receive financial help, and the number of amateur football players has grown by 20%.” Blatter, for his part, thanked the Hungarians for making the congress a great success. A bit later Orbán received a thank you note from Blatter in which he praised Orbán’s speech at the opening of the congress. Blatter especially liked Orbán’s remark that “fair play is strength, not weakness.”

Pál Schmitt, Sepp Blatter, and Viktor Orbán in 2009 at the Puskás Award ceremony

Pál Schmitt, Sepp Blatter, and Viktor Orbán in 2009 at the Puskás Award ceremony

Orbán’s close relationship with Blatter has had its advantages. For example, he receives invitations from FIFA to attend the world championships, where he can watch the games from the VIP section. He hasn’t missed one since 1998. Although he has to pay for his airfare, all other expenses are covered by FIFA. In Brazil his  son, Gáspár, even accompanied him and sat next to him in the VIP section, right beneath Vladimir Putin and Angela Merkel.

Hungary will host the 2020 European Championship at the rebuilt Puskás Stadium in Budapest. The stadium will look impressive, as the pictures in an English-language article in portfolio.hu amply demonstrate. The stadium, according to Orbán, will be part of a larger center for Olympic sports. Yes, in the last few months the idea of bidding for the Olympic games in 2024 has resurfaced. In 2017 Hungary will host the world championship organized by FINA (Fédération Internationale de Natation), which is responsible for administering international competitions in aquatics. That event will cost Hungarian taxpayers 45 billion forints. Many Hungarians ardently hope that Budapest will not win the right to hold the Olympic Games in Budapest because that will truly be beyond the financial capabilities of the country. As it is, the 2017 FINA world championship was awarded to Hungary unexpectedly. The original winner, Guadalajara in Mexico, withdrew in the last moment. The reason: the price of oil fell and they could no longer afford it. The president of FINA praised Hungary and Orbán “as friends in a difficult moment.”

Orbán’s lofty ideas about sports and fair play sound less than genuine in view of his own political career and personal life. “Sports give a chance for us to understand how to win in a fair way and how to accept defeat with some respect!”

I’m almost certain that Orbán has his heart set on hosting one of the future World Cups. Most likely he believed that Blatter’s presidency would give him an edge. And that extra advantage is needed since Hungary’s ranking in the world of football is very low: forty-third out of fifty. It will be interesting to watch how Orbán navigates a newly reformed and reconstructed FIFA.

The political reverberations after the Hungarian football fiasco

When soccer/football becomes a political matter, as was pointed out by a Swiss journalist straight from Felcsút, it is not surprising that a spectacular defeat of the Hungarian team will soon be part and parcel of high level politics. This is exactly what has happened. Fidesz politicians have been madly searching for scapegoats in order to avoid pointing the finger at the chief soccer enthusiast of the country, Viktor Orbán. The first victim of the “purge” was the coach, who resigned right on the spot. The second target seems to be Sándor Csányi, president of the Hungarian Football Association (Magyar Labdarugó Szövetség). I assume you know that Sándor Csányi is one of the richest Hungarians and CEO of Hungary’s largest bank, OTP.

Actually, if Viktor Orbán’s minions wanted to find a scapegoat in Sándor Csányi, they didn’t have to worry too much about a possible negative reaction to their attack from the chief. In the last few weeks a noticeable cooling of the friendship between the prime minister and the banker could be observed. The first punch came from Orbán’s side when the prime minister’s faithful chief-of-staff, János Lázár, called Csányi the country’s chief usurer. That got Csányi’s goat, who answered in kind and alluded to Lázár’s questionable role in the monopolization of tobacco products and the licensing of the tobacconist shops. If that weren’t enough, he gave an interview to Olga Kálmán in which he explained all the negative effects of the abnormally high taxes on banks. Even so, a few days later Csányi and Orbán could be seen amiably sitting side by side at some Videoton game.

After the miserable performance of the Hungarian national team, several Fidesz politicians attacked Csányi, making him and the secretary-general of the Association responsible for the state of Hungarian soccer. Perhaps the very first to go on the attack was Máté Kocsis, mayor of District VIII and the man in charge of the growing Fidesz communication team, who announced that the coach’s resignation is not enough. Of course, he meant a purge of the Hungarian Football Association headed by Csányi. He was followed by Tamás Deutsch, a Fidesz original and currently a member of the European Parliament, who in addition to Csányi wanted to summarily fire the secretary-general of the Association. The third person was Zsolt Wintermantel, mayor of Újpest and a member of parliament, who demanded that the whole upper echelon of the Association resign.

Viktor Orbán playing football / ATV

Viktor Orbán playing football / ATV

The reply from Csányi was not long in coming. This morning he gave a press conference in which called Deutsch “a Twitter hussar,” alluding to Deutsch’s fondness for mostly obscene tweets.  Csányi also recalled that when Deutsch was minister of sports in the first Orbán administration he ordered computerized gates for all Hungarian stadiums, which turned out to be useless junk. He suggested that Deutsch try to sell the whole lot and with the proceeds help Hungarian football. As for Máté Kocsis, Csányi didn’t spare words. He claimed that when Kocsis took over the mayoralty of District VIII there were six stadiums while now it has only four. “Such a man should shut up when it comes to soccer. As a spokesman for Fidesz he has so many other opportunities to lie.” As for Wintermantel, Csányi acted as if he didn’t really know his name: “What’s the name of that mayor? Oh, yeah, Wintermantel. He is the one who screams in front of every stadium and before each match. He should learn more about the facts. This is not politics, this is football.”

After all that, it is perhaps not surprising that both Magyar Nemzet and Magyar Hírlap “censored” Csányi’s words about Kocsis. Magyar Nemzet  left out the most important part of Csányi’s remarks–about Kocsis’s many opportunities to lie as a Fidesz spokesman. Instead they truncated Csányi’s message to Kocsis: “At the time of regime change there were six football fields in the District VIII. Now there are only four. Therefore go elsewhere to lie in connection with soccer.” Magyar Hírlap completely ignored Csányi’s remarks about the Fidesz politician.

This is what happens when politicians use sports, any kind of sport, for their own political purposes. This is especially true when the prime minister himself is the “guiding light” of soccer, which he claims is a “Hungarian sport.” If the coach is at fault and if the chairman of the Hungarian Football Association should be sacked, what should happen to Viktor Orbán who most likely is involved in even the smallest details of the Hungarian football business? Because he was the one who convinced Csányi to seek the chairmanship and who also made sure that he was elected to the position. And who is the person who outlines in great detail the whole future of the sport in Hungary? Naturally, the prime minister, who gave his longest ever interview to the journalist spokesman of the Puskás Academy. Nothing happens in the sport without his okay.

Meanwhile Ádám Szalai, center forward of the Hungarian team, vented his frustration. Interestingly, his complaints about the state of Hungarian soccer are very similar to what Ferenc Gyurcsány told his fellow MSZP members in Balatonőszöd: we have been lying to ourselves and refusing to see the growing problems. False hopes and promises. Nobody is ready to face the music. Nobody really wants to work hard. The bigwigs, I think Viktor Orbán included, insist on Hungarian coaches when these coaches are no good. No Hungarian player plays in any first- or even second-rate European clubs. He himself used to be considered an excellent football player at home, but when he was picked up by a German team it turned out that he really couldn’t compete with his teammates. He had to relearn how to play the sport. At the age of 25-27 one cannot learn to play soccer. What Hungary needs are foreign coaches who make them work hard and who can produce a new generation of players. The present set is useless. Forget about them.

But then there was the match between the Hungarian Roma top players (válogatott) against the Vatican’s Swiss Guard in July 2010. And you know what? The Gypsies won 8-1. Interestingly enough, we didn’t hear about Viktor Orbán’s sitting there in Felcsút, where the game was played, yelling: “Hajrá Magyarország, hajrá magyarok!  Take a look at the short video. It’s fun.

When I told this story to a friend of mine, she said something the Hungarian government might take to heart. Why not put some effort into organizing soccer clubs in villages where there is a sizable Roma population? Such a program wouldn’t need billions. You need balls, a field, and enthusiasm. It would keep those boys active and success would be a great boost to their egos. After all, Puskás himself started to play on an empty lot somewhere in Újpest. He and his friends didn’t even have decent balls. They made them from rags.

The key to future success most likely lies not in fancy football academies (and certainly not in stadiums) but in having thousands of kids introduced to the game. Playing soccer is not an expensive sport like tennis, skiing, or skating. Lots of poor kids can play it. Just like so many Afro-American kids could easily play basketball, often on abandoned city lots, and eventually some of them became world-famous basketball players.

Meanwhile, it looks as if Viktor Orbán will have to be satisfied with a foreign coach. I just wonder who in the world will take the job.

Viktor Orbán and his fellow oligarchs

The Orbán government has given up the idea of solving the forex loan problem quickly and in one fell swoop. For a couple of weeks it looked as if Viktor Orbán was thinking of a radical solution that would have meant making the banks pay the difference between the exchange rate at the time of the issuance of the loan and the current exchange rate. This could have been a tremendous burden. Just to give you an an idea, if someone took out a loan in Swiss francs in 2008 he paid 143.83 forints for one Swiss franc. Today the exchange rate is 241.51 forints to one Swiss franc.

The original idea was borrowed from the Croatian government’s decision a few weeks ago. There is, however, a huge difference in the number of people with forex mortgages in Croatia and Hungary.  Apparently the “nuclear option” was abandoned because the government realized that the entire Hungarian banking sector could go under as a result.

In no small measure Sándor Csányi was responsible for this change of heart or at least for the government’s realization of the possibly grave consequences of such a move. After all, he sold a large number of his OTP shares which by itself prompted some panicky follow-through on the Budapest stock exchange. By now most observers interpret his move as a warning to Viktor Orbán. This is what can happen, and on a much larger scale, if the government goes through with its plan.

Those who don’t quite believe this scenario point out that no one knows how many OTP shares Csányi actually owns. A German source claims that what Csányi sold amounted to no more than 1% of his holdings. So, the argument goes, this shouldn’t have made a great impression on Viktor Orbán, who surely knows the details of Csányi’s finances.

But Ferenc Gyurcsány, who was interviewed on the subject, dismissed this argument. Csányi’s sale of this allegedly tiny portion of his holdings was not itself a threat. But implicit in this sale was the threat that if the government goes through with its plans he may dump the other 99%, the consequences of which might be immeasurable.

Gyurcsány knows Csányi only too well. When he was prime minister he had quite a bit to do with him because, after all, “he is a big player … with a tremendous amount of power.” In fact Gyurcsány agrees with János Lázár that Csányi and the other oligarchs have far too much power, which a prime minister must keep in check.  He himself normally sent them away and told them that they cannot expect special treatment from him. He admitted that as a result his relationship with Csányi and the others was not the best. He didn’t sit with them with in the VIP section at soccer games spitting out sunflower seeds, a reference to Viktor Orbán’s not exactly elegant habit.

As for János Lázár’s reference to Csányi as an octopus, apparently Orbán suggested that his chief of staff sit down for coffee with Csányi to smooth things over but Lázár ignored the suggestion. When Orbán inquired about the meeting, Lázár told the prime  minister that he has no intention of ever apologizing to Csányi. Orbán didn’t press the issue. I guess by then he decided that Csányi didn’t really deserve an apology, especially since he learned that Gordon Bajnai’s foundation had received a small grant from him. I’m sure that this “sin” will not be forgotten by the vengeful Viktor Orbán.

The relationship of Csányi, and the other oligarchs as well, with Orbán is complicated. For one thing, Csányi doesn’t seem to like him as a person. When Orbán was in opposition, Csányi often talked about him disparagingly in Gyurcsány’s presence. Admittedly, it is in the interest of these oligarchs to seek close relations with the powers that be. And yet if they feel that the government is working against their interests and that no amount of pressure will cause it to change its ways, they will not hesitate to abandon the prime minister and his party. Orbán cannot trust Csányi, Demján, and some of the others because they are not his men the way Lajos Simicska is. The behavior of Sándor Demján, who is up in arms about the nationalization of the credit unions, and Sándor Csányi seems to indicate that these oligarchs are fed up with the unpredictable, anti-business policies of the Orbán government.

There is another aspect of the relationship between the oligarchs and Viktor Orbán that has received very little attention. One mustn’t forget, Gyurcsány said, that the Orbán family’s wealth puts him and his family among the top five richest families in Hungary. Orbán has cleverly hid his and his family’s wealth, but he cannot hide behind front men and legal tricks forever. One day he will be caught. He became an MP practically straight out of college and today he is a billionaire. He is using his position to enrich himself and his family. That is not only immoral, it is a crime.

This is not how you become a billionaire

This is not how you become a billionaire

This interview took place with Olga Kálmán on ATV, and the reporter was visibly shaken by the news that the extended Orbán family may have become one of the five richest families in the country. Therefore she decided to follow up on the story. The next day she invited Mátyás Eörsi, a former SZDSZ MP and an old acquaintance of Viktor Orbán. Eörsi was also one of the members of a parliamentary committee that was supposed to find out how the former prime minister managed to acquire so many assets in a few years, allegedly from his modest salary. Unfortunately, creating these investigative committees in Hungary is a waste of time because they have practically no enforcement authority. They can’t even require witnesses to appear. This particular committee was just as useless as was, for example, the investigative committee on the sudden and unexpected decision of the first Orbán government to purchase Gripen fighter planes. Although the family’s enrichment was highly suspicious, the committee didn’t manage to pin anything on him. Olga Kálmán also took a good look at Orbán’s financial statements, the kind every MP must fill out yearly. These statements indicate that, especially given his five children, he could have led at best a modest middle-class life.

Like Gyurcsány, Mátyás Eörsi is convinced that the Orbán family is among the richest in Hungary. In fact, he is pretty certain that way back in 1992 when Fidesz sold the half of a very valuable building it received from the Antall government, the whole amount landed in the Orbán family’s coffers, laundered through about twenty phony companies. These were the companies that were later sold to two phantom buyers for one forint each.

Prior to becoming a member of parliament in 1990 Eörsi had a fairly lucrative legal practice. He didn’t start with nothing as Orbán did. Moreover, Eörsi’s parliamentary salary was a great deal higher than average. He claims based on his own experience that there is no way that Orbán could have saved enough money to buy the house he did after he lost the election.

Eörsi as a lawyer is especially interested in the “legal techniques” by which Orbán manages to hide his immense wealth with the assistance of his front men. As long as he is prime minister he has no problem controlling whatever is being handled by others. But what techniques did he use to guarantee access to his wealth once he is out of office?

One reason for Orbán’s many political successes is that his followers believe that he is a man of modest means who takes their side against the bankers, multinationals, and oligarchs. But what will happen if his people find out that their beloved prime minister is in fact one of those hated oligarchs?

Sándor Csányi’s press conference

As Portfolio, the bilingual financial site, said today, “everybody was sitting on pins and needles” waiting for the cabinet decision on the fate of the loans issued in foreign currencies. However, it seems that the government wisely postponed the decision. So, for a while we will not know what kind of a solution the government will come up with.

An announcement of the decision at this point could have had an adverse effect on the financial and economic health of the country. Coming so soon after Sándor Csányi, the CEO of OTP, and some of the bank’s top officials sold millions of OTP shares, such an announcement might have further roiled the financial markets and would probably have had a negative effect on the value of the forint. As it was, the forint weakened, although not significantly, after the National Bank’s expected announcement that it would once again lower the interest rate, now down to 4%.

But there was another much awaited event, Sándor Csányi’s press conference after his return from an African safari. He managed to calm investors’ nerves; OTP closed up 4.7% today.

The press conference itself was quite unusual in that it was by invitation only. Let me first list the media outlets whose reporters were not invited: Kossuth Rádió, Magyar Televízió, Hír TV, Magyar Nemzet, HVG, and Index. Csányi invited TV2, ATV, Népszabadság, Origo, RTL Klub, and the Hungarian news agency MTI. As for the foreign press, reporters from Dow Jones, Bloomberg, and Reuters were present. In brief, the pro-government news outlets were pretty well ignored.

Sándor Csányi the gracious host

Sándor Csányi, the gracious host

First of all, Csányi made it patently clear that he has no intention of leaving his post as CEO of OTP. He made some references to Magyar Nemzet‘s false rumors about his health which he claimed is excellent. After all, he just walked 15 km in 40ºC in Africa. As to why he sold such a large number of OTP shares, Csányi partially stuck to his earlier explanation of his plans to open a large slaughter house in Mohács for which he needed capital. However, he admitted that since the value of OTP stock had been so volatile of late, he left word to sell if the shares fell to a certain price.

Csányi denied any intention “to send a message” to the prime minister via his stock sale. “I know Viktor Orbán. He doesn’t get scared easily.” Selling his stock would have no more effect on Orbán than attacking him with paper planes. He refused to see the government’s action as an attack on him personally or on his bank because, after all, OTP wasn’t handled any differently from the banking sector as a whole. On the other hand, he did make some malicious remarks about János Lázár, who recently attacked Csányi and his “empire,” comparing OTP to an octopus. He described it as a powerful organization with far-reaching tentacles that caused harm to the country as a whole. While claiming that these personal attacks don’t bother him, Csányi couldn’t help making a dig of his own. He told the reporters that he doesn’t know Lázár well, but people have told him that Lázár is a clever politician and a good organizer. He added, “We see how well he handled the tobacconist affair.”

But Lázár wasn’t the only target of his caustic remarks. Csányi expressed surprise at Magyar Nemzet’s decision to come out with the story of his heart operation only now when the owners of the paper, including Lajos Simicska, already knew all about his operation in February. Reporters naturally asked his opinion of the Orbán government’s decision to nationalize the 104 credit unions and inquired whether that would in any way adversely affect the interests of the banking sector. According to Csányi, the nationalization of the credit unions might actually benefit the banks. It is very possible that those who used to bank with the credit unions will move over to the commercial banks.

Otherwise he praised Zsolt Hernádi, CEO of MOL. Hernádi certainly needs every bit of help he can get at the moment because the old bribery charge against him has been revived. Croatian prosecutors accuse him of bribing Ivo Sanader, the former prime minister of Croatia, in order to obtain a majority share in INI, the Croatian oil company. Sanader is currently serving a ten-year sentence in Croatia. These accusations surfaced already in 2011 but the Hungarian prosecutor’s office refused to allow the Croats to question Hernádi. But Croatia’s efforts have intensified and now that it is part of the European Union it has a better chance of obtaining a European arrest warrant against Hernádi.

As for what will happen with the forex mortgages, the fear is that the government is thinking in terms of a “comprehensive” solution to the problem. That is, not only will those who are unable to pay their mortgages be offered some relief but everybody who ever took out a forex loan. That may mean, according to the calculation of  Index, 675,000 individuals. It’s no wonder that the government postponed the decision.

Politics and finances: Orbán’s Hungary today

Judging from the comments, most readers of Hungarian Spectrum consider Sándor Csányi’s spectacular exit from the ranks of shareholders of OTP an event that overshadows all other news, including whatever the current opposition is doing. Perhaps in the long run the panic that took hold of Budapest yesterday following the precipitous fall in the stock price of Hungary’s largest bank might prove to be more significant than any purely political event. However, what happened at OTP cannot be separated from politics.

By now we know that even before Csányi, the CEO of OTP, decided to sell his OTP stock worth about 26 million euros, some other high-level officials of the bank had already gotten rid of theirs. I assume they sold because of the probability that the government will “take care of the Forex loans one way or the other.” The exact way is still not entirely clear, but it is likely that the banks will again be the ones that will have to bear the financial burden of the “government assistance.” This rumor began to circulate about a week ago.

And then came Viktor Orbán’s interview with Margit Fehér of The Wall Street Journal. In this interview Orbán made it clear that the bank levies are here to stay. He has reneged on his initial promise that the very high extra taxes on banks would be needed for only a couple of years. Now the official position is that the bank levies will remain until the national debt is under 50% of GDP–perhaps in ten years “if the euro zone could do better.”

Another political decision that most likely had an impact on the misfortunes of OTP was the government’s abrupt announcement of the “nationalization” of 104 credit unions privately owned but functioning under the umbrella of TakarékBank Zrt. TakarékBank and its credit unions are really the banks of the countryside. They are present in 1,000 smaller towns and villages, which means that they cover about a third of all Hungarian communities. One can learn more about TakarékBank here. One thing is important to know. TakarékBank was run by and with the consent of the individual owners and board members. Clearly, the state wants to take over the whole organization and most likely run it as a state bank. What is happening here is no less than highway robbery. As some people said, the last time something like this happened in Hungary was during the Rákosi period. Sándor Demján, chairman of TakarékBank’s board, swears that they will keep fighting all the way to Strasbourg to prove that what the Hungarian government is doing amounts to nationalization without any monetary compensation.

If Orbán succeeds in the nationalization of TakarékBank, it might pose a serious threat to OTP. All in all, it’s no wonder that OTP officials didn’t think that their investment was safe. The alarm bell might sound in foreign banks as well (don’t forget that Orbán’s plans include a banking sector that is at least 50% Hungarian owned), and if that happens the whole banking sector might collapse. But I guess that would fit in with Orbán’s goal of tearing down all the carry-overs from the past and replacing them with his own original creations.

Let’s return now to the interview Orbán gave to The Wall Street Journal. Some of his statements are just a regurgitation of what he said in his rambling speech to the foreign ministry officials about a week ago but this time in even stronger language. For example: “The future of Europe is Central Europe” and by “now we are once again part of [this] powerhouse.” He also repeated some of his often used lines about the nonexistent strides Hungary has made since he took over: the national debt is falling, foreign trade is rocketing, Hungary no longer needs “other people’s money,” unemployment is falling, and finally that when he took office only 1.8 million people paid taxes but now that number is “close to 4 million.” No one has any idea where Orbán got his figures about the number of taxpayers, but they bear no resemblance to reality.

The interview is a rare self-portrait that could be the topic of another post, but here I would like to bring up two points.

This is the first time, at least to my knowledge, that Orbán openly declared that he really doesn’t want to join the eurozone. This despite the fact that Hungary is obligated to adopt the euro as the country’s currency since it was part of the conditions for membership in the European Union. But today Orbán thinks that Hungary “should exploit the advantages of not being in the eurozone.” I was already suspicious when he insisted that the Constitution should include a sentence stipulating that Hungary’s currency is the forint, but in the interview he was quite explicit on the subject: to change the constitution’s declaration that Hungary’s currency is the forint “will require a two-third vote of Parliament. So, to join the euro will require a strong, unified majority. This guarantees that it will not be a divisive issue. Whether Hungary joins will depend a lot on how well the new, integrated eurozone functions.”

www.lorettahelson.com

www.lorettahelson.com

And finally a point that might interest amateur psychologists. Orbán said: “When you have to save your country, to renew your country–that is when a job like this is appealing to someone like me. This is a real challenge, not just like reorganizing a bureaucracy. People like me, we like to do something significant, something extraordinary. History has provided me that chance. Actually, it provided it three times. I’ve always gotten historical challenges as a leader. When things are going well, I seem to lose the elections, because the people don’t need me anymore.” There is a Hungarian saying “A próféta szólna belőled!” meaning I hope your prophecy comes true. But all joking aside, it seems that Orbán is not confident about winning the next elections. He is afraid that all his extraordinary accomplishments will only make an opposition victory more likely. I guess the winning campaign slogan, contrary to everything we know about electorates, would be: “If you’re better off than you were four years ago, throw the bum out!”

The first draft of a “party program” of the Hungarian democratic opposition. Part II

Yesterday when I left off I was talking about the opposition’s concern over the very low Hungarian birthrate, which is resulting in a steadily aging population. At the moment the Orbán government is discussing a scheme by which every woman over the age of 18 who gives birth to her first child would receive a sizable amount of money–the most often heard figure is 300,000 forints–in addition to a flexible scheduling of the subsidies already given to women after childbirth. Most people don’t think that this scheme would make families rush to have children given the current economic situation. As I mentioned, the democratic opposition doesn’t have any better ideas on the subject except that they want to put an end to the current unfair distinction between legally married and unmarried couples who have children. In addition, they promise to put an end to child hunger.

Naturally, they pay a great deal of attention to the welfare of the large population over the age of 65. They promise not only to raise pensions to match the rate of inflation; they also plan to reintroduce a “premium” that would be indexed to economic growth. They make a renewed promise of free public transportation to everyone over the age of 65. They would also again allow pensioners to work while drawing their pensions and would allow people to work beyond the retirement age. Out of these promises the only one I object to is free public transportation for everybody over the age of 65. I think that forcible retirement is untenable in a democratic society and that in certain professions it is outright injurious to the public interest. I am thinking of judges and university professors, for example.

The next topic of the provisional party program is healthcare, and I must say that it is one of the weakest points of the program. Here we have only vague generalities. I understand, however, from a television interview that the hospitals would remain in state hands and that the new government would stick with a single centralized state insurance system. Only yesterday I was listening to an interview with Erzsébet Pusztai (earlier MDF, now a member of Lajos Bokros’s conservative party) who was won over to the idea of privatizing healthcare. What does she mean by that? Basically, that doctors would be the owners of their own practices. Having doctors as state employees guarantees failure, she contends. I tend to agree with her. Therefore I don’t expect any great positive change in the quality of Hungarian healthcare as a result of a change of government. In the first place there is no money to raise salaries and, even if they did, the problem lies not only with low salaries but with attitudes.

The MSZP and Együtt 2014-PM negotiating team / MTI, Photo Lajos Soós

The MSZP and Együtt 2014-PM negotiating teams / MTI, Photo Lajos Soós

Naturally, the democratic opposition wants to put an end to the Kulturkampf introduced by the Orbán government and they make all sorts of promises of state subsidies to make culture readily available. As for the state of the media and the media law, which they surely want to change, they said nothing about MTV, MR, and Duna TV. I’m afraid that these organizations would need a complete change of personnel; otherwise the new government will end up with a far-right state media of low quality.

The Internet wasn’t left off the list either. They promise to pay special attention to making broadband available everywhere in the country and to encourage Internet usage and computer literacy.

These two parties at least don’t want to take away the voting rights of the new Hungarian citizens from Romania, Ukraine, and Serbia. The reason I didn’t include Slovakia here is that Slovakia introduced legislation that forbids dual citizenship and therefore there were very few people who applied for Hungarian citizenship and, if they did, it was in secret. I personally wouldn’t support that right and from what I read on the subject a lot of people would vote along with me on that issue. The document does make special mention of the democratic forces’ opposition “to the use of  the Hungarian minorities in the neighboring countries as instruments of Hungarian political parties,” but as long as voting rights are ensured there is no way of preventing party politics from spilling over the borders. On that issue, I’m with Ferenc Gyurcsány’s Demokratikus Koalíció.

Finally, the democratic opposition pledges its support of European values and Euro-Atlantic cooperation. They realize the changing nature of the European Union, but Hungarian national interests must be protected in cooperation with and not against the European Union. Hungary wants to be a partner in the building of a stronger and better European Union.

* * *

Commentators, on the whole, responded positively to the beneficial effects of the joint declarations and the parties’ willingness to work together. Most of them think that once the first step toward an electoral alliance is taken the number of undecided voters will drop and support for the opposition will increase.

In addition to this document the opposition came out with another one that deals with the nomination of MP candidates. I will spend some time on that document in the future, but until then suffice it to say that this particular document pretty well ensures that there will be a single common party list, which is an absolute prerequisite for any success against Fidesz at the next election.

Breaking News: Sándor Csányi, CEO of OTP, the largest Hungarian bank and the premier holder of Forex mortgages, dumped almost 2 million shares yesterday, allegedly to invest in his other businesses. OTP stock has been under pressure recently as a result of rumors about a new government scheme to help the approximately 100,000 people who are currently incapable of repaying their Forex loans. This generous assistance would come at the expense of the banks. Since details of the plan are unavailable, we don’t know how large a haircut the banks would have to take, but the hit might be substantial. I guess that Csányi, who by the way has been a big supporter of the prime minister, decided to bail while he still had some equity left. In the wake of his mega-sale (and I assume that sooner or later we’ll find out who was on the other side of that block trade–again, rumors are flying), OTP stock lost about 9% today.