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.
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.
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.
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””