Tag Archives: The Financial Times

The Financial Times in the crosshairs of the Orbán government

On January 15 a lengthy, detailed article appeared in The Financial Times written by Neil Buckley, the paper’s Eastern European editor, and Andrew Byrne, its correspondent for Hungary, Romania, and the Western Balkans.

The article, titled “The rise and rise of Viktor Orbán,” spans the life of the Hungarian prime minister, from his childhood and his anti-communism as a university student to his long political career at the head of the party he and his fellow students founded in 1988. The article reflects a solid familiarity with its subject and, as one can learn from Zoltán Kovács, who as undersecretary for public diplomacy and relations was also interviewed, it has been in the making for months, during which time the authors interviewed dozens of people with an intimate knowledge of Viktor Orbán. The authors naturally wanted to have an interview with Orbán himself, but he declined. The Financial Times isn’t a favorite in Hungarian government circles.

For anyone with a less than thorough knowledge of recent Hungarian politics, the article is a gold mine because it provides the kind of concise background information that enables English-speaking readers to begin to understand the rogue country with its illiberal politics that gives the European Union so many headaches. Who is Viktor Orbán? What makes him tick? For those of us who know Viktor Orbán well, there are no great surprises here. But I liked the quotation from a former senior official who said that “the problem is he has no scruples. He has no moral limits.” I also liked László Kéri’s recollection of Orbán describing Fidesz as a collection of “kind of spare parts” of diverse political tools. Otherwise, Orbán is described as a man with “an overwhelming will to power,” and the article correctly describes his regime as an incredibly centralized political system where all power is in his hands.

In brief, there was nothing more in this article, except in greater detail and perhaps with more  insights, than what other German, British, American, and French newspapers have published about Viktor Orbán and his illiberal political system. Yet the reaction to the article in government circles was vehement. Big guns came out to counter what Buckley and Byrne had to say about Viktor Orbán.

The opening salvo came from Zoltán Kovács, who was sorry that the article didn’t offer something “new and insightful” about the reasons for Orbán’s success. In his article titled “Here’s how the Financial Times missed the story—again,” Kovács complained that the final product of Buckley and Byrne was just “another installment of the standard Financial Times narrative about Viktor Orbán.” The same old story about a once liberal democrat and radical activist who became a  “nationalist-populist” and “turned Hungary into a semi-authoritarian regime.” Kovács was especially offended by the intimation that Orbán’s religious conversion was just a cynical, tactical maneuver.

So, what should Buckley and Byrne have written instead, according to Kovács? They should have explained the real reasons for Orbán’s success: the country’s “robust economic recovery,” for example. They could have written about the government’s “workfare policies” that brought tens of thousands of people back into the labor force. They ignored the fact that Hungary’s credit rating, which earlier was classified as junk, is once again investment grade. They should have talked about “an upswing in investment” and the “lowest corporate tax in the EU.”

Unfortunately, the truthfulness of these claims is questionable. Yes, in the last year Hungary’s credit rating was upgraded from junk status, but Kovács neglected to mention that it had been rated as investment grade in 2010 when Orbán took over the reins of the government. Because of his government’s economic mismanagement, it was subsequently downgraded. I have no idea where Kovács got the idea that there is an upswing in investment; I hear exactly the opposite. It is true that the economy is doing well, but that is true of the European Union as a whole. In addition, there is the incredible amount of money coming from the European Union, which the Orbán government is spending in a great hurry, preferably before the election. And despite the recent good economic numbers, Hungary is still doing poorly in comparison to other countries in the region. In brief, it wouldn’t have been good journalism to follow Kovács’s advice.

It wasn’t only Kovács who came to Viktor Orbán’s rescue. That is more or less expected of a government spokesman. Mária Schmidt also appeared with an article titled “How Fantastic.” It is difficult to figure out what is so fantastic, but perhaps it is supposed to be a sarcastic remark about the article’s emphasis on Orbán’s unusually strong “will to power” and his lack of scruples to achieve that power. Subsequently, Schmidt sets out to teach us something about power. “In order to grab power, in fact, one needs to make horrible sacrifices. Keeping power, on the other hand, is a value in itself, which requires excellent performance, indefatigable work, self-limitation and self-sacrifice” — and naturally that is what Orbán has done.

Unlike Kovács’s measured demands for a different kind of information that would give a more accurate picture of the state of the country, Schmidt’s piece is full of expressions of a bruised nationalist ego when she sarcastically calls people in the West “the advanced ones” who feel superior to the people of the less advanced nations of Eastern Europe. She talks about The Financial Times in disparaging terms, describing it as “this newspaper, apparently the authoritative daily of the business world.” Western academics are also in her crosshairs. For example, “It’s great to know that Timothy Garton Ash has also offered his opinion from Oxford. It was with great relief that I learned that expertise has been heard at last. He says Hungary is ‘not in the strict sense a dictatorship’ [and] that Orbán ‘has turned Hungary into a semi-authoritarian regime.’” Timothy Garton Ash is wrong, she insists. Hungary is a true democracy and, “as for Orbán, he started out as a freedom fighter and that is what he has remained.” According to Schmidt, “the problem the ‘advanced’ countries of the Union have with Orbán is that he has remained a freedom fighter and a democrat.” As for the complaints that Hungary is not a liberal democracy, Schmidt offers the following comparison. When Hungarians lived under a “people’s democracy,” everybody knew that that the adjective “people’s” meant dictatorship. “The adjective ‘liberal’ plays the same role that ‘people’s’ played in those years.”

Fighting Evil

That’s Mária Schmidt’s interpretation of Viktor Orbán’s place in the European Union. Viktor Orbán, the solitary freedom fighter who is struggling against the liberal dictatorship of the western leaders who think that they are superior to East Europeans.

A recent interview with Mária Schmidt warrants a mention here. Yesterday an excellent article appeared in The Guardian which included an interview with the “court historian” of Viktor Orbán. In the middle of a history lesson Schmidt said: “There is a debate about the future of Europe: whether it can remain an alliance of nation states, or whether it should become an empire. I don’t believe in empires. Where is the Soviet Union now? Where is the Third Reich? Where is the Ottoman empire? Where is the British Empire? Meanwhile, Hungary is still here. This is a state which is 1,100 years old. Germany, by comparison, is a young country,” Schmidt added, raising her voice. “I don’t like being lectured by people who couldn’t even set up a nation state before 1871.” Schmidt’s office later emailed to clarify that she had intended this as a joke. We can be sure of one thing: she wasn’t joking.

February 4, 2018

Euratom, the European Commission, and Paks

Last night an article appeared in The Financial Times, written by Andrew Byrne in Budapest and Christian Oliver in Brussels. The reporters had heard earlier that the European Atomic Energy Community or Euratom, which must approve all nuclear supply contracts signed by EU member states, had serious reservations about the contract signed by Russia and Hungary and would most likely withhold approval of the plant’s fuel supply. By yesterday they learned that Euratom had definitely “refused to approve Hungary’s plans to import nuclear fuel exclusively from Russia.” Hungary appealed the decision without success and, according to “three people close to the talks, the European Commission has now thrown its weight behind Euratom’s rejection of the contract.” In brief, that part of the contract that gave Rosatom the exclusive right to supply Paks2 with nuclear fuel for the next twenty years must be renegotiated. As a result, for the time being at least, the Paks project is stalled.

András Giró-Szász, one of the many government spokesmen, argued that the information obtained by The Financial Times was inaccurate. He especially objected to the sentence in the article that read: “The EU has blocked Hungary’s €12bn nuclear deal with Russia.” Nobody “blocked” anything. Initially the Hungarian government talked about demanding a retraction from the newspaper. By the next morning, however, Zoltán Kovács, another government spin doctor, gave up on the idea, especially since The Financial Times had no intention of changing a story that had been verified by three independent sources.

The Hungarian charge might have been based on an erroneous translation of the verb “to block.” Although one of the word’s meanings is “to stop,” it can also mean “to obstruct” or “to impede.” In the latter sense The Financial Times correctly described the situation that developed as a result of Euratom’s decision, sanctioned by the European Commission. As the FT text continued, “The result is to block the whole Paks II expansion. To revive it, Hungary would need to negotiate a new fuel contract or pursue legal action against the commission.” So, the deal is not dead but it must be renegotiated. I might add that in Hungarian “blokkolni” (to block) means only to stop.

Another reason for the confusion, in addition to semantics, is Hungarian secretiveness. 444.hu learned that the Hungarian government insisted on secrecy in its negotiations with Euratom. Therefore, neither the head of Euratom nor the European Commission can say anything about the details of the situation that developed in connection with the Russian contract.


Since the Hungarian government has already lost its battle with Euratom and the Commission, the matter of the nuclear fuel supply must be renegotiated with Rosatom. János Lázár, in an interview on Kossuth Rádió this morning, referred to extensive discussions with “the members of the Russian negotiating team.” There has been some talk about getting nuclear fuel from other suppliers. Westinghouse has been mentioned several times as a possible source, even by János Lázár himself. However, Benedek Jávor, Hungarian MEP of the Greens, got in touch with Westinghouse and the firm denied in writing that there have been any talks between them and the Hungarian government.

What can the Hungarian government do under the circumstances? It could abandon the whole project. The Russians might be quite happy with such a decision since the Russian economy is in serious trouble and the Russian state might not have the resources to lend such a large sum to Hungary even if the project would be beneficial to Rosatom.

The other possibility is to renegotiate the deal and to convince Russia to allow other suppliers to participate in selling nuclear fuel to Paks2. But that might not be too attractive to the Russian partners. The revenues Rosatom receives from selling fuel to nuclear power plants all over the world are an important contributor to the Russian economy, especially now that the price of natural gas and oil is falling. The Russian government might be willing to finance, through its loan to Hungary, a Russian company, but it doesn’t sound like good business from the Russian point of view to finance nuclear rods supplied by, let’s say, Westinghouse or Siemens. Or at least this is what Miklós Hegedűs, an economist specializing in energy matters, said in an interview on HírTV this morning. Finally, the Hungarians can fight the decision of Euratom and the European Commission. Such a move would delay the completion of the project, probably for years. I myself don’t think that Viktor Orbán would venture into such a losing battle.

What we must also keep in mind is that the question of the nuclear fuel supply is not the only one that the European Commission is interested in. Another concern is the Russian loan itself. Is it a form of “state aid,” which is forbidden by EU law? Will it give Paks2 an undue advantage that will distort the Hungarian energy market? If the European Commission decides that this the case, the whole project will have to be scrapped. Still another concern is that the Russians received the job of expanding the nuclear power plant without any competition whatsoever. If the Commission finds the lack of competition a stumbling block, the fate of the project will be sealed.

At the moment, the appropriate cabinets of the European Commission are investigating whether an in-depth investigation of these aspects of the Russian-Hungarian agreement is warranted. Their decision will undoubtedly be influenced by political considerations. How much does the EU worry about Russian influence within the European Union and the role Hungary might play in Vladimir Putin’s power game? If they consider Russia a serious threat to European security, the Commission might be less understanding and forgiving than it has been in the past five years. Until now Viktor Orbán has been lucky, but it is possible that the Brussels bureaucrats will scrutinize Hungary’s blatant disregard of EU laws and its common democratic values more closely now, given Russia’s perceived threat to Europe.