Hungary to Build Russian Pipeline Over EU Objections

Hungarian prime minister Viktor Orbán arrives for a meeting with other European People's Party leaders, December 13, 2012
Hungarian prime minister Viktor Orbán arrives for a meeting with other European People’s Party leaders, December 13, 2012 (EPP)

Hungarian prime minister Viktor Orbán said on Tuesday his country will go ahead with the construction of its part of Russia’s South Stream gas pipeline, despite objections from other European Union member states and the United States.

Orbán, an Hungarian nationalist, made his statement while visiting Serbia, a country close to Russia that will host part of the same pipeline.

South Stream, due to be completed in 2018, has divided Europe since Russia invaded and annexed the Crimea in March, a territory that was formerly governed by Ukraine. Read more “Hungary to Build Russian Pipeline Over EU Objections”

Hungarians Reelect Nationalist Premier, Boost for Far Right

Hungarian prime minister Viktor Orbán arrives for a meeting with other European People's Party leaders, December 13, 2012
Hungarian prime minister Viktor Orbán arrives for a meeting with other European People’s Party leaders, December 13, 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. Read more “Hungarians Reelect Nationalist Premier, Boost for Far Right”

Turning Away from Europe, Hungary Seeks Russian Nuclear Power

Hungarian prime minister Viktor Orbán arrives for a meeting with other European People's Party leaders, December 13, 2012
Hungarian prime minister Viktor Orbán arrives for a meeting with other European People’s Party leaders, December 13, 2012 (EPP)

Mere weeks after Russia threw Ukraine a $15 billion lifeline to help its former satellite state shore up its finances, the country negotiated a $13.7 billion loan to Hungary to help pay for the construction of a nuclear power plant.

The deal was signed earlier this month by Russian president Vladimir Putin and Hungarian prime minister Viktor Orbán and has been heavily criticized by opposition lawmakers since who see it as a step backward in their country’s integration with Europe. Read more “Turning Away from Europe, Hungary Seeks Russian Nuclear Power”

Orbán Unlikely to Revise Nationalist Economic Policies

Viktor Orbán
Hungarian prime minister Viktor Orbán arrives for a meeting with other European People’s Party leaders, December 13, 2012 (EPP)

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.” Read more “Orbán Unlikely to Revise Nationalist Economic Policies”

Hungary’s Economic Policy “Increasing Erratic”

Two of the three major American credit rating agencies downgraded Hungarian sovereign bonds to junk status this month, citing the “increasingly erratic” and “unorthodox” economic policies of Prime Minister Viktor Orbán’s government as well as concerns over the independence of the country’s central bank.

The constitutional reforms enacted by Orbán’s right-wing administration in April of this year enabled the government to appoint members to the monetary council of the Hungarian National Bank which, in the view of the credit raters, significantly weakens the institution.

Moreover, a bill pending before parliament would allow the president to appoint the central bank’s deputy governors who are currently elected by the bank’s chairman. The bank’s monetary council, moreover, which sets interest rates, would be expanded by two members, presumably economists who share Orbán’s nationalistic economic vision. Read more “Hungary’s Economic Policy “Increasing Erratic””

Bulgarian, Romanian Workers Still Not Welcome

The European Parliament’s civil liberties committee on Monday green lighted the entry of Bulgaria and Romania to the union’s border-free Schengen Area. Yet as many as ten Western European member states will keep their borders closed for Bulgarian and Romanian workers until 2014.

All countries that belong to the European Union are required to implement the Schengen Agreement which eliminated border patrols and custom checks between member states in 1999. Ireland and the United Kingdom are exempt as are the overseas territories of Denmark, France and the Netherlands. Iceland, Norway and Switzerland, although not part of the EU, do belong to the Schengen Area.

Bulgaria and Romania, which both joined the European Union in 2007, have met the necessary conditions for entry. Key to their ascension is their ability to protect Europe’s outer borders. The European Parliament will vote in plenary session on the matter next June after which government leaders are supposed to finalize the agreement unanimously. Read more “Bulgarian, Romanian Workers Still Not Welcome”

Hungary’s New and Dangerous Constitution

In the last few months the Western European press was full of news about Hungary. Not the most flattering news. It slowly dawned on people outside of the country that something was wrong with the new Hungarian government that won a landslide electoral victory almost a year ago.

Signs of trouble, at least for those who live in Hungary or those who follow political events in the country, were evident from the very beginning. Prime Minister Viktor Orbán’s Fidesz party, an acronym of sorts for “young democrats,” is neither young nor democratic anymore. Sometime in 1993 the party under the guidance of Orbán, who was then a thirty year-old liberal, edged slowly but surely toward the right. Whether Orbán was always attracted to right-wing ideology or whether he decided to switch sides for political expediency is a topic of debate among political analysts.

Today Fidesz is a nationalist party with a rightist ideology that eerily resembles that of Gyula Gömbös, Hungary’s prime minister between 1932 and 1936.

Gömbös tried to introduce a political system in Hungary that mimicked Benito Mussolini’s fascism. It was only his early death that prevented him from succeeding.

Western readers often find Orbán’s Fidesz described as “conservative” or “right of center.” I would like to correct that wholly inaccurate label. Fidesz under the leadership of Viktor Orbán is moving far to the right.

This week, Adam Michnik, former Polish dissident and chief editor of Gazeta Wyborcza, warned Orbán, his old comrade in arms: “Viktor, this road leads to dictatorship.”

What has happened since the election last April? A lot, unfortunately. Fidesz won 53 percent of the vote but because of the pecularities of the Hungarian electoral system, the party managed to attain over two-thirds of the parliamentary seats. The Fidesz members of parliament were all hand picked by the new prime minister. Potential opponents were set aside. They became members of the European Parliament or were paid off with some lucrative job. Anyone who has since made what Orbán deemed to be a political mistake has been thrown out of the party or demoted.

Under the current Hungarian constitution a party with a two-thirds majority can do practically anything. So Orbán undertook the complete reworking of the Hungarian political system. He put his own men into important “independent” positions including the Accounting Office that supposedly supervises the government’s finances and the Office of the Chief Prosecutor. Right now he is working on doing the same to the Office of the Chief Justice. If he didn’t like a particular ruling of the Constitutional Court, his two-thirds majority voting bloc simply stripped the court of some of its powers. The President’s Office was filled with a man of limited intelligence who is a servile puppet. One could continue.

About all this the outside world knew little until Orbán made the mistake of drafting a media law that would muzzle the written and electronic press. The attack on the freedom of journalists resonated across the world. What is more, Orbán introduced his legislation at the very end of December of last year, mere weeks before Hungary assumed the rotating presidency of the European Union.

Then came two solid months of wrangling over the media law between the European Commission and the Hungarian government. Orbán initially insisted that the would not allow any changes in the law but eventually had to relent. Under European pressure, some changes were made and voted on only recently, but the European Parliament remained dissatisfied. Once again, Hungary has insisted that it will not change a word in the legislation but it might not be the end of the story.

Since the media law was enacted, Fidesz and its ally the Jobbik party have worked on rewriting their country’s constitution. While other opposition parties originally sent delegates to the committee entrusted with drafting the Constitution, it soon became clear that not one of their suggestions would be included in the final draft. They determined, moreover, that their participation could be injurious to their own interests. Let Fidesz with the assistance of the far-right Jobbik come up with a constitution and it will be very difficult to convince the world that it is anything more than a party document that cannot serve the interests of the entire nation.

Fidesz leaders have in recent weeks tried to convince the green liberal LMP to join them in the effort after all. Although LMP can’t always decide whether they hate the socialists or Fidesz more, their leaders refused to budge.

Before 1949 Hungary had no written constitution. The Hungarian legal system functioned very much like that of Great Britain. In 1949, during the Rákosi period, a Hungarian version of the Stalinist Soviet constitution was adopted. With the change of regime in 1989-1990 something had to be done in a hurry. Thus liberal minded constitutional lawyers began rewriting the 1949 document. Their rewrite was so thorough that only a few sentences remained from the Stalinist version. Yet the 1949 date remained. This “oversight” allowed Orbán to claim that the current charter is in fact a communist one.

If one had asked the leaders of Fidesz whether they favored drafting a new constitution from scratch just several years ago, most would probably have said “no.” Orbán himself only complained about the preamble which he didn’t think was dignified enough. But then came the overwhelming electoral victory and Orbán discovered that there was a “revolution in the voting booths.” A revolution that demanded a new foundation.

There was a lot of confusion about when the work on the new constitution should start and how long it would take to draft a new basic law. Orbán at first talked about two years, then one year and suddenly the nation was told that the new constitution had to be done by Easter Monday. This is very much in line with Orbán’s image of himself and his work. A few years ago he borrowed the words of Jesus Christ sending his disciplines forth to spread the faith.

The text of the Constitution was almost entirely written by a single Fidesz parliamentarian whose only knowledge of constitutional law derives from having attended law school with his friend Viktor Orbán.

The preamble, which Fidesz politicians insist on calling “the national creed,” is a verbose and confused account of Hungarian history and a nationalistic wish list for a glorious future. The body of the Constitution still needs a lot of scrutiny but at first glance it seems that this constitution’s importance lies in making sure that the present government and Fidesz can remain in power for at least twelve more years.

A Hungarian political philosopher who is not known for his optimism said that while the old constitution served the country for some twenty years, the new one is unlikely to be around for long. He may well be right. A year after the stunning Fidesz victory, this week, during Hungary’s national holiday celebrating the revolution of 1848, more people demonstrated against the government than listened to Viktor Orbán’s speech telling the European Union to get lost.

For more, read “The first draft of the new Hungarian constitution, Parts I, II and III” at the author’s blog, Hungarian Spectrum.

Hungary’s Rotating EU Presidency Paralyzed

Last week, German chancellor Angela Merkel and French president Nicolas Sarkozy put forth their plans to deepen integration among the seventeen nations that use the euro as their currency.

Hungarian Prime Minister Viktor Orbán described the eight hour luncheon in Brussels where the proposals were discussed as the longest meal in his life, comparable only to his wedding. At the end of that dinner, he added, there were days of celebration though. Surely, at the end of the luncheon in Brussels there was no cause for joy, certainly not for Viktor Orbán.

The Hungarians had worked out a six-point plan that doesn’t speak to the current financial problems connected to the euro. It seems that this plan wasn’t radical enough for Merkel nor Sarkozy. This isn’t surprising given Orbán’s ambivalent attitude toward the European Union in general and his opinion concerning “states rights,” to use a familiar term from American history. The political future of Hungary’s ruling party, Fidesz, largely depends on artificially whipped up nationalism. It would be politically unacceptable at home for Orbán to stand behind a proposal that could take away a substantive amount of economic freedom from the member states.

The Franco-German plan is a radical shift in attitude toward sovereignty in economic and financial matters. If it materializes, it might be an important turning point that could lead to the euro nations’ agreeing on more of their key economic policies as a unified bloc. In return Berlin would strengthen the rescue fund for the eurozone by lending its full €440 billion ceiling figure and perhaps use its funds more flexibly in the future. The problem currently is that there is a single currency without either economic convergence or political union.

Although some member states currently oppose a common tax and wage policy, most observers agree that France and Germany will eventually get their way. For the time being, Austria, Ireland and the Netherlands are complaining, but Ireland’s views in particular don’t carry much weight given the incredible financial mess the country is in.

And what about Hungary? Hungary is not in the eurozone and perhaps many Hungarians at the moment are delighted about the delay in adopting the single currency. Thus, if the Franco-German plan materializes it doesn’t affect Hungary in the short run. However, it has a bearing on Viktor Orbán’s pride and the standing of Hungary which currently occupies the rotating presidency of the European Union.

Hungary’s “ambitious plans,” even before the Franco-German announcement, had suffered some setbacks. It was obvious that at least one item on the Hungarian agenda, the inclusion of Croatia in the union, wasn’t going to materialize given the economic predicaments faced by many existing EU member states. Another, extending the Schengen borders to include Bulgaria and Romania, also seemed to be too much for the European Commission. And now this two-tiered plan.

As Viktor Orbán rather unhappily remarked, the seventeen eurozone countries’ regular meetings will take place in private, most likely meaning that even the prime minister of Hungary will not be present in the next six months. Adding insult to injury, just yesterday Poland was invited to join the meetings as an observer.

Orbán most likely was mighty upset when he arrived in Brussels for the summit. The agenda was suddenly changed and, instead of presenting the Hungarian proposals, he found himself a witness to a long discussion about a new strategy from which Hungary, rotating presidency or not, was excluded. No wonder that Orbán was unhappy.

The importance of the rotating presidency had already been diminished by the appointment of a bona fide president of the European Council a couple of years ago. That limited role has now been further diminished by the announcement of the Franco-German plan that made Hungary’s “ambitious plan” much less relevant.

Viktor Orbán was certainly upset and offended. That’s why he talked about the Franco-German plan as “a nonexistent document.” He tried to mask his disappointment by pointing out that Hungary wouldn’t want to be part of the “elite group” because if the country joined the eurozone any time soon, it might lose its competitive edge by being tied to a common economic and financial policy.

He may be right but the question is whether foreign companies would be eager to establish businesses in Hungary just because of this alleged competitive edge. Extra tax levies and other less than business-friendly burdens currently imposed on foreign enterprises by Orbán’s government are far from conducive to a large influx of foreign capital.

Of course, Hungary can look for business outside of Europe — Russia and the Far East. As for Russia, Hungarian-Russian relations are not the best. It didn’t matter how often Tamás Fellegi, minister of national economic development, went to Moscow, he always came back empty handed. Foreign Minister János Martonyi is the latest visitor to the Russian capital and since he just returned to Budapest, we don’t know yet whether he managed to put Russo-Hungarian relations on an improved track. There has been talk of Russian businesses getting a piece of the action in the Budapest metro construction and the expansion of the Paks Atomic Plant, but no word of major Russian firms planning to set up shop in Hungary. Similarly, there is no news on Chinese investments.

It is unlikely that the sidestepping of Viktor Orbán and the Hungarian rotating presidency by the eurozone heavyweights has anything to do with the less than savory reputation of Orbán and his government in Western Europe. One suspects, however, that he is not the most beloved man in Brussels.

This story first appeared at Hungarian Spectrum, February 8, 2011.

European States Seize Pension Funds

While most countries in Europe are bracing for spending cuts, some governments are hard pressed to implement austerity measures. Multibillion euro pension funds are a convenient source of revenue for politicians who don’t want to cut back on public spending or privatize welfare services.

Across Europe, pension schemes are organized either by the state or by semiprivate institutions that are heavily regulated. Every month, European workers set aside part of their income for their retirement except they are saving not for their own golden years but financing directly the retirement of seniors — hoping that, by the time they retire, tomorrow’s working generation will foot the bill. Read more “European States Seize Pension Funds”

Fear of Change Propels Populists to Power

Throughout Europe, fringe movements have been able to maneuver themselves into the political spectrum, rallying anti-immigration forces and a renewed sense of nationalism with considerable electoral success. While the world is globalizing and Europe becoming one, millions of people, from Finland to Italy, want to have no part of multiculturalism and change. Read more “Fear of Change Propels Populists to Power”