Recalcitrant Hungary and Poland Exhaust Europe’s Patience

Hungarian prime minister Viktor Orbán enters the European Parliament in Brussels for a debate, April 26
Hungarian prime minister Viktor Orbán enters the European Parliament in Brussels for a debate, April 26 (European Parliament)

The European Parliament has opened an investigation into the state of democracy and rule of law in Hungary, which is ruled by the self-described illiberal democrat Viktor Orbán.

The resolution, introduced by liberal and left-wing groups, passed on Wednesday with the support of 68 members of the conservative European People’s Party, to which Orbán’s Fidesz belongs.

The mainstream right has long shielded Budapest from scrutiny, despite Orbán’s years of attacks on the courts, the central bank and the media, the removal of checks on his parliamentary majority and his pursuing of economic and migration policies that defy the European mainstream. Read more

Trump’s European Admirers Are Deluding Themselves

United Kingdom Independence Party leader Nigel Farage speaks at the Conservative Political Action Conference in National Harbor, Maryland, February 26, 2015
United Kingdom Independence Party leader Nigel Farage speaks at the Conservative Political Action Conference in National Harbor, Maryland, February 26, 2015 (Gage Skidmore)

Donald Trump’s unexpected presidential election in the United States has delighted his ideological counterparts in Europe. Brexiteers in the United Kingdom think he will give them a better deal than Hillary Clinton. Populists in France and the Netherlands responded to Trump’s victory with glee. So did ultraconservatives in Central Europe.

They should think again. Trump may be a kindred spirit and his triumph is a setback for the liberal consensus that nationalists across Europe and North America agitate against. But he is no friend of European nations. Read more

The Trouble with Electing an Outsider

Businessman Donald Trump appears at the Conservative Political Action Conference in National Harbor, Maryland, February 27, 2015
Businessman Donald Trump appears at the Conservative Political Action Conference in National Harbor, Maryland, February 27, 2015 (Gage Skidmore)

What made Donald Trump seek the presidency?

A bit of armchair psychology is required to answer that question. Based on the way way he conducts himself and the many profiles I’ve read about the man, I think it’s safe to say that a powerful motivator was his desire to prove himself. Read more

Comrades in Arms

Hungarian prime minister Viktor Orbán and Russian president Vladimir Putin answer questions from reporters in Moscow, February 17
Hungarian prime minister Viktor Orbán and Russian president Vladimir Putin answer questions from reporters in Moscow, February 17 (Facebook/Viktor Orbán)

Sometimes in politics everything is exactly what it looks like.

This was the case when the prime minister of Hungary, Viktor Orbán, visited Moscow last week, extended a gas contract with Russia and told the Russian president that the period when the EU automatically extended sanctions against Russia was “behind us.”

The moment of honesty came when Vladimir Putin and Viktor Orbán got to compliment each other on their Syria and refugee-related policies. “We value greatly the efforts made to resolve this problem [of Middle Eastern refugees],” said Orbán, adding, “We wish you great success in your international initiatives.” Putin then said, “Our people has sympathy for the position taken by the Hungarian government” on the refugee crisis.

And yes, in a perverse way, the two policies do indeed work very well together — that is, to suit the needs of the two leaders: Russia’s intervention in Syria aggravated the war and the refugee crisis. Which, in turn, strengthened Orbán’s position in Hungary and in Europe. Which, in turn, helped far-right parties and Putin allies and weakened the EU.

This unspoken but existing alliance, ultimately, against the EU and against the solution of a refugee crisis that benefits them both, was behind the chumminess that the Hungarian prime minister and the Russian president showed in Moscow.

The Russian pro-government press could hardly hide its joy over the visit. Izvestia wrote about a meeting of “not only partners, but friends on principles,” noting that Orbán was the first foreign leader whom Putin met in the new working building at his Novo-Ogaryovo residence. But calling Orbán and Putin friends is an exaggeration. Just as Orbán himself declared last year, Putin “is not a man who has a known personality,” which largely rules out making friends with fellow leaders. Even on principles.

From products to partners

However, the two leaders do share a whole range of similarities. Orbán is actively using pages from Putin’s textbook in Hungary. He staffs independent institutions with his own people; he tampers with the electoral system; he blames opposition to his government on foreign influence, particularly the EU, the United States and George Soros; he enables violent nationalism; he has his own oligarchy and his own extravagant yet grey cardinal; his government harasses NGOs; thugs related to his party threaten opposition politicians to prevent them from exercising their constitutional rights. He has used his power extensively to enrich and help the careers of the members of his family.

But this is only a similarity of tools. Or, in other words, it is Orbán following what the second man of his party, János Lázár, recently called, referring to Putin, “a great school, a special culture of exercising power.”

Most importantly, both Orbán and Putin are the products of a traumatized society. Putin is the product of the shock that the Soviet people, so accurately described by Svetlana Alexievich, felt after the collapse of the USSR. People who choose not to condemn Stalin not only because of nostalgia for past grandeur, but because then they would have to condemn uncle Yura as well. Orbán is the product of all of Hungary’s failed revolutions plus the one that the country never had, in 1989. And the answer is, in both cases is a strange, late-nineteenth-century nationalism built on a lukewarm nostalgia for “the old days” that people knew and felt comfortable with. Maybe they even believe in it.

Viktor Orbán is a dangerous man. He represents the dark side of the European Union. The EU, which built an Eastern Partnership catering for the needs of political elites rather than the people who actually wanted to belong to the EU. The EU, which, by following whimsical and clueless policies toward Turkey, based on short-term political interests, ultimately helped Recep Tayyip Erdoğan become what he is today. The EU, which willingly throws away its most potent political tool, its being a normative force, for short-term gains. The EU, which designs weak policies that lead to bad politics.

And this makes Orbán Putin’s new best friend in Europe.

Enabling Putin’s vision of the EU

Orbán’s foreign policy resembles a whac-a-mole. Free of any strategic principles, it pursues short-term business gains, using enablers with questionable past, disguised as diplomats, and so-called “trading houses,” jumping at every opportunity where the government smells money — often by unscrupulously flattering authoritarian leaders.

Orbán’s EU would be willing to suspend sanctions against Russia as part of a political deal. Ultimately, as many have now pointed out, this was one of Russia’s main goals in Syria from the beginning: to weaponize the refugee crisis; to strengthen parties like Orbán’s; to put pressure on the EU; to come up with meaningless ceasefire deals to show the weakness of its opponents; in the best case, to send a message: I can help you with your problem, but I can also make it much worse. And he has.

Orbán and Putin are certainly together on their weapons of choice and the vision that they offer, namely, that a country is only fully independent if its leaders do not have to follow rules. And they — and their supporters — also share the tragedy that their visions are anachronistic and impossible in the twenty-first century, with Russia’s ailing economy that depends strongly on globalization and Hungary’s membership in the EU which alone ensures, for an otherwise insignificant economy, a constant flow of investments and easy access to export markets.

Ultimately, both men depend strongly on what they call the West. At this point, they both have enough unfiltered information about the state of the world to know this, so Russia will not invade an EU member state and Orbán will not publicly attack Angela Merkel. But make no mistake: they will keep trying their limits.

This is why the European Union cannot afford to suspend sanctions against Russia this summer, unless the Minsk Agreement is fully implemented, which seems unlikely. The sanctions must not be part of a political deal — not only because this would result in another weak policy, but also because Russia is not only unwilling but unable to help the EU solve the refugee crisis.

The key lies on the other side of the Syrian war: in Turkey. Erdoğan is a similarly unattractive partner, strengthened, to a large extent, by the EU’s own failures. But unlike Vladimir Putin, he can actually help the EU and if anything can help Turkey, it is a closer engagement with Europe that has to start with the refugee crisis.

It is a hard pill to swallow. It is to be hoped that it will teach the EU something important about engaging with its neighbors. Although right now this is not the case, at some point in the future the EU might want something important from Russia and it will want an easier, better communicable deal than it is getting now with Turkey.

If, however, the EU chooses to make sanctions part of a political deal with Russia this summer, it will resign, today, of any such deal in the future. Instead, Putin will have tried his limits and succeeded, so next time he will go a little further. And he will encourage Viktor Orbán to do so, too.

If the EU should do anything about the sanctions, it should expand them should any doubt emerge about Russia’s parliamentary election this September. It should openly support NGOs that monitor the election, such as the election watchdog Golos, as well as aid politically active Russian emigrants, many of whom live in the EU. It should threaten officials and politicians actively participating in the falsification of the vote and the intimidation of the political opposition with travel bans and asset freezes.

If you are the president of Russia and you need Viktor Orbán to prop up your image, you know that you are well past your heyday. But if the EU is blinded by the humbuggery and follows the recipe of the Hungarian prime minister, there will be other, bigger and stronger Orbáns until one cannot see what is left of the EU.

This article originally appeared at No Yardstick, February 24, 2016.

Hungary’s Nationalist Premier Shows Putin Not Isolated

Hungarian prime minister Viktor Orbán
Hungarian prime minister Viktor Orbán (The Council of the European Union)

Russian president Vladimir Putin visited Budapest on Tuesday. The visit was largely devoid of substance but made clear the Russian leader was not as isolated in Europe as most Western governments would have liked.

Hungary’s nationalist prime minister, Viktor Orbán, said his ambitions for the summit with Putin were modest. He assured European ambassadors that he would not try to mediate between Russia and the West over the standoff in Ukraine where the former supports a separatist uprising against the Western-backed administration in Kiev.

Rather, Orbán said he planned to negotiate a new long-term gas supply contract that would allow him to reduce energy bills.

“There is no guaranteed gas supply to Hungarian households after 2015. I need to solve this issue,” he said in a radio interview earlier this month.

Hungary relies on its former Soviet master for most of its oil and natural gas. Russia also loaned the country almost $30 billion last year to shore up its public finances and help pay for the construction of a nuclear power plant.

The new plant should cover about 40 percent of Hungary’s electricity needs. Russia pledged to cover up to 80 percent of the construction costs, equivalent to 11.5 percent of Hungary’s annual economic output.

Before last year’s parliamentary election, in which Orbán’s support dropped 8 percent, the premier forced energy companies to cut their rates, driving up consumer confidence and his party’s popularity but causing business confidence to fade.

Orbán shares Putin’s disdain of Western liberalism and supported the ill-fated Russian South Stream pipeline that was canceled under European pressure last year. He has also expressed reservations about the economic sanctions European countries imposed after Russia occupied and annexed the Crimean Peninsula from Ukraine. He might expect more favorable terms for oil and gas supplies in return even if falling petroleum prices worldwide should reduce Ukrainians’ utility bills anyway.

Hungarian living standards are a third lower than the European Union average. Since coming to power in 2010, Orbán has nationalized Hungary’s private pension scheme, introduced sectoral surtaxes on energy and telecommunications firms as well as supermarkets and weakened the independence of the judiciary. al reforms enacted in 2011 limited the supreme court’s powers and annulled all its previous rulings.

In a scathing 2013 report, the European Commission said Hungary’s business climate had “constantly deteriorated” since Orbán became prime minister, blaming his nationalist economic program and repeated changes in regulations. American rating agencies downgraded Hungary’s sovereign bonds to junk status, citing the Central European nation’s “erratic” and “unorthodox” economic program as well as concerns over the independence of the central bank. Orbán changed the rules so that he could personally appoint central bank board members.

Hungarians Reelect Nationalist Premier, Boost for Far Right

Hungarian prime minister Viktor Orbán arrives at a European People's Party summit in Brussels, March 1, 2012
Hungarian prime minister Viktor Orbán arrives at a European People’s Party summit in Brussels, March 1, 2012 (EPP)

Hungarians reelected the nationalist prime minister Viktor Orbán in a parliamentary election on Sunday, early results showed, and turned out in greater numbers for the far-right Jobbik party.

While Orbán’s national conservative Fidesz party lost support compared to the last election, down from nearly 53 percent in 2010 to over 48 percent, it will still likely get a majority of the seats in parliament.

Jobbik, which got almost 17 percent support in 2010, stood at nearly 22 percent in a tally that was based on a count of about a quarter of the votes. The opposition socialist bloc also stood at 22 percent.

The result for Jobbik was particularly disconcerting for the left which accuses it of being racist and antisemitic.

Orbán’s reelection came on the back of an economic uptick. While the economy contracted 1.7 percent in 2012, it grow 1.1 percent last year and is expected to expand further. Hungarians’ living standards are still a third lower than the European Union average but some of the prime minister’s policies, including a cut in electricity prices, have kept consumer confidence up and inflation down.

Policies in the last four years have included a nationalization of Hungary’s private pension scheme, sectoral surtaxes on energy and telecommunications firms as well as supermarkets and a relief scheme for homeowners that the banks mostly had to pay for.

In a scathing report, the European Commission last year said the Central European nation’s business environment had “constantly deteriorated” since Orbán was first elected in 2010 as a result of his nationalist economic program and the repeated changes in regulations.

Yet Orbán has pledged more of the same. Foreign investors fear that he will impose more levies on power companies and press ahead with a plan to transfer part of the banking sector into Hungarian ownership.

The European Commission also expressed concerns about the independence of Hungary’s judiciary. al reforms enacted in 2011 limited the supreme court’s powers and annulled all its previous rulings.

Later that year, American rating agencies downgraded Hungarian sovereign bonds to junk status citing the country’s “increasingly erratic” and “unorthodox” economic policies as well as concerns over the independence of its central bank. Central bank board members are now appointed by Orbán personally. He put his former finance minister, György Matolcsy, who designed Hungary’s nationalist economic program, at its helm last year.

Orbán Unlikely to Revise Nationalist Economic Policies

Hungarian prime minister Viktor Orbán listens to a debate in the European Parliament in Brussels, January 18, 2012
Hungarian prime minister Viktor Orbán listens to a debate in the European Parliament in Brussels, January 18, 2012 (European Parliament/Pietro Naj-Oleari)

Despite recommendations from the European Commission to improve its business climate, Hungary’s government is unlikely to revise its nationalist economic policies. Prime Minister Viktor Orbán said earlier this month, “I think what we are doing is successful.”

Orbán has reason to be optimistic. His country’s economy expanded .7 percent in the first three months of this year, but after it contracted through 2012. At the end of last year, Hungary’s economy was still almost 10 smaller than before the downturn in 2009.

The right-wing government responded to the crisis by shutting out foreign companies and investors and raising taxes on some industries to mend its budget shortfall.

Although Hungary is now likely to keep its deficit under the 3 percent treaty limit, in its policy recommendations (PDF) released on Wednesday, the European Commission said the decision to target individual industries had raised “questions about the sustainability of the consolidation efforts.”

Especially because the tax burden is increasingly uneven, with energy and telecommunication companies as well as supermarkets facing sectoral surtaxes, and regulations have changed so much, Hungary’s business environment has “constantly deteriorated” since Orbán was elected prime minister in 2010, according to Brussels. Energy companies have been forced to cut their electricity bills. Foreign investment has been curtailed.

The European Commission is also worried about the independence of the judiciary — constitutional reforms passed in 2011 limited the supreme court’s powers and annulled its previous rulings — and observes that banking oversight is still lacking more than four years after the financial crisis began in the United States.

In late 2011, American rating agencies downgraded Hungarian sovereign bonds to junk status citing the country’s “increasingly erratic” and “unorthodox” economic policies as well as concerns over the independence of its central bank. Central bank board members are now appointed by Orbán personally. He put his former finance minister, György Matolcsy, who designed Hungary’s nationalist economic program, at its helm in March.

Even if Hungarians’ living standards, about 66 percent of the European Union average, haven’t improved since Orbán came to power, some of his policies, including the lower electricity bills, have kept consumer confidence up and inflation down.

Fat Mathilde cites the policy in Magyar Nemzet newspaper as proof that Hungary has provided adequate consumer protection, whatever the European Commission says. “I wonder what else could protect the consumer if not prices?”

Commentators in the business daily Világgazdaság are more critical. Nicholas Hegedus, an energy research company director, laments that the government’s economic policies are “increasingly moving away from the truth.” The European Commission also cautions that Hungary’s growth estimates are “somewhat optimistic.”

However, Nicholas Újvári argues in the same newspaper that the EU’s attempts to force Hungary to change course haven’t paid off. Orbán, he adds, is still favored to win the next election, scheduled to take place early next year.

Orbán’s popularity plummeted through the economic crisis from a 45 percent high at the time of the last election to 24 percent in an opinion poll last month. But that still puts him far ahead of the opposition.