05/08/2012 04:15 PM

Hungary in Crisis

Viktor Orbán's Dismal Mid-Term Review


A political landslide brought Viktor Orbán into power in Hungary, where he quickly cemented his position with a two-thirds majority. But halfway through his term, the state of his administration is grim. The nation, deeply divided and on the brink of financial ruin, is being sidelined on the international stage.

Hungarian Prime Minister Viktor Orbán probably would have envisioned his mid-term review differently. Two years ago, after the triumphant election victory of his right-wing nationalist Fidesz Party, the beaming winner Orbán announced the "overthrow of the old and the development of a new national order." In the meantime, the situation in Hungary could hardly be more desolate. The country is on the brink of financial ruin, its economy is headed downhill and the impoverishment of large groups of people is creating social problems. Hungary is extremely polarized domestically, and on the international stage it is more isolated than any other European Union country has ever been before.

As if all of this weren't enough, Orbán is also grappling with unpleasant personnel issues. On the morning of May 2, the parliament had to elect a new president. The previous officeholder, Pál Schmitt, had resigned in early April after only 20 months. The former Olympic gold medalist in fencing, hand-picked by Orbán in the summer of 2010 to play the role of a loyal rubber-stamper of laws, stumbled into a plagiarism scandal. His 1992 doctoral thesis consisted almost entirely of Hungarian translations of other works.

The parliament chose János Áder as Schmitt's successor, with 262 members voting for the 52-year-old lawyer and 40 against him. This makes Áder the first post-communist president of Hungary who is not a nonpartisan personality but a seasoned political pro. As Orbán's former right-hand man, Áder organized Fidesz campaigns, brought the party base in line and disciplined its parliamentary group. But then, while working as a campaign strategist, the man the newspaper Népszabadság called Orbán's "foreman" bungled two parliamentary elections, including what had been believed to be a certain victory for Fidesz in the 2006 elections, and he fell out of favor.

Far from the center of power, Áder spent the last three years as an ordinary member of the European Parliament in Brussels and Strasbourg. He endured his banishment without the slightest complaint. Moreover, he made himself useful as the author of legislation that was to cement the power of Orbán and his party in the long term. Áder wrote the new Hungarian election law, which favors large parties like Orbán's Fidesz, and he planned the judicial reform against which the European Commission plans to file a complaint, because it empowers the executive branch to interfere with the work of judges and courts.

It was probably his unconditional loyalty that paved the way for Áder "from exile back to the top," as the Hungarian news site characterized his sudden career leap. Although the president's duties are largely ceremonial in nature, he can also exert direct political influence by refusing to sign laws and sending them back to parliament instead.

Popular Support Wanes

Orbán is determined not to risk a president blocking legislation in this way. In his 20 months in office, Áder's predecessor Schmitt dutifully waved through more than 300 laws and a new constitution. Since then, Orbán's and his party's power system has been more or less fully constructed. However, an important reform package to clean up government finances and stimulate the economy is expected to be approved soon, and the introduction of new special taxes is also pending, including a tax on all financial transactions through banks and on mobile phone calls.

In light of this pending legislation, unity within his own ranks is especially important to Orbán, because popular support for the prime minister and his party is waning. "Orbán and his party introduced the concept of strong government," says political scientist József Jeskó of Budapest's Méltanyosság Institute. "In the last two years, they have fundamentally changed almost every area, always accompanied by huge conflicts and against the will of all other players in society."

Social policy is a case in point. In his rhetoric, Orbán often stirs up anti-capitalist resentment and invokes the national community of all Hungarians. In reality, however, his government's actions are decidedly antisocial. Under the slogan of a "working society" that Orbán advocates, social benefits for the unemployed were radically cut, a work requirement for social welfare recipients was introduced, pensions were slashed and employee rights were severely curtailed.

These measures seem so drastic to many Hungarians that parts of the trade union movement, which has been clinically dead for the last two decades, have been resurrected. But resentment is even spreading among members of Fidesz's very own base, the owners of mid-sized Hungarian companies. The ejection of the International Monetary Fund (IMF) from Hungary in the summer of 2010, "unorthodox measures" like the nationalization of private pension funds and special taxes for large foreign companies have shaken the confidence of investors. Hungary must now pay record interest rates on its bonds, and the exchange rate for its currency, the forint, has collapsed dramatically at times. "We would like to see less up and down and more predictability," says Ákos Niklai, the acting chief of the Confederation of Hungarian Employers and Industrialists (MGYOSZ).

Isolated in the EU

An end to the conflict with the European Union is equally unforeseeable. Since the adoption of the controversial media law in December 2010, which is being used to spoon-feed journalists with the public service media, Orbán has repeatedly promised Brussels that his government would abide by EU standards. But he employs a different tone at home. Sometimes he accuses the European Commission of treating Hungary the way it was once treated by the Soviet leadership, and then he announces that Hungary will not be a colony and will fight for its freedom.

In a meeting last week, Orbán assured European Commission President José Manual Barroso that he would amend the laws the EU had objected to, laws that addressed the independence of the national bank and the judiciary, among other things. Although the European Commission will file suit against Hungary over these laws, Barroso promised that Brussels would no longer block the negotiations Hungary has been seeking with the IMF for the last five months over a €20 billion ($26 billion) emergency loan. Orbán had hardly returned home before summarizing the outcome of the meeting with these words: "We will not withdraw anything, repeal anything or amend anything."

Orbán has isolated Hungary within the EU with his combative rhetoric, and he has also maneuvered himself onto the sidelines, to the extent that hardly any of his counterparts want to meet with him at the moment. But there is more. The public and the political world in Hungary are deeply divided, and there is great animosity between the government majority and the opposition. This is also reflected in the choice of the new president. After Pál Schmitt's resignation, the discussions of his possible successor within the parliamentary groups were nothing but a formality for the government.

Even important authorities on the history of Hungarian political culture are outraged over conditions in the country. "There were unbelievable debates in the Imperial and Royal parliament before World War I, complete with slander and all manner of curses, and yet in the evening the politicians went back to playing cards together at the casino," says author György Dalos. "They don't do that anymore. The politicians don't even have a shared casino anymore. This hatred is sickening, and it could destroy the entire country."

Translated from the German by Christopher Sultan


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