There has been a lot of speculation in the last year or so about who really is in charge in Hungary when it comes to economic policy. Or, perhaps better put, who influences whom? Was it Economic Minister György Matolcsy’s vision that captivated Prime Minister Viktor Orbán who, as he himself admits, knows mighty little about economics and finance or is Matolcsy merely a willing tool in the hands of the “visionary,” Viktor Orbán? In either case, the situation is pretty bad.
I am inclined to believe that the prime actor in this sorry affair is Viktor Orbán himself and that he picked György Matolcsy as his “right-hand” because Matolcsy supplies him with the kinds of ideas that he himself likes to hear. It is a symbiotic relationship. It is therefore unlikely, for a while at least, that Orbán would relieve Matolcsy of his responsibilities due to pressure at home and from abroad. It is true that today we received the news that the Hungarian delegation that will negotiate with the International Monetary Fund and the European Union will be headed by Tamás Fellegi, minister in charge of economic development, but Matolcsy himself is still holding on to his job.
Although the country’s financial situation reached a point that forced the Orbán government to turn to the IMF, government communication hasn’t changed at all. The unorthodox methods that were supposed to save the country still seem to be valid. According to government propaganda, the fundamentals of the Hungarian economy remain sound. The credit rating agencies are out to get Hungary and so are the “speculators” who attacked the Hungarian forint. And naturally, the Hungarian government will wage war against the enemies of the country. Members of the government as well as the official spokesmen emphasize how tough the Hungarian delegation will be and how they will defend Hungary’s sovereignty. A long laundry list follows such announcements that tells the faithful followers of Fidesz the points on which they will not budge. All this while everybody knows that Hungary has no choice. If they want financial help they will have to follow the IMF’s conditions for a loan.
Most commentators claim that this rhetoric is for internal consumption only. Home politics demand such communication tactics. After all, in the last eighteen months there were many instances in which the government said one thing at home and its very opposite abroad. Or, that one set of figures was released in Hungarian-language documents and another set in the English-language versions. Most likely, this is also the case now.
But I’m coming to the conclusion that this belligerent communication in fact reflects the ideas and attitudes of Viktor Orbán himself. It is not just politics. According to the composite picture one is getting from different informants, Orbán truly believes that his economic ideas are superior to those orthodox textbook solutions others use. He seems to be the captive of his own propaganda in which he himself by now wholeheartedly believes. For example, he has repeated so often that a close cooperation of the East European countries with Hungary as its center will be “the engine of European recovery” that it is impossible that it is just empty talk. The same holds true, I believe, when it comes to “the Eastern winds.” By now I think he truly believes that he is more clever and wiser than his fellow politicians west of Hungary. As one of the informants told HVG, “Viktor is convinced that the majority of European politicians are dim-witted [korlátolt] and are afraid to make decisions and resort to traditional political methods.” According to the same source, Orbán made no secret of his opinions and told his colleagues at international meetings what he thinks of them. Now, Orbán is convinced that these people are turning against him and through his person against Hungary.
At his meeting with the eleven economists at least some of the participants tried to convince Orbán that the reason for Hungary’s current financial troubles is not the result of some international conspiracy against Hungary; it is simply how financial markets work. They didn’t succeed. “He still thinks that two weeks ago an attack of speculators was launched against Hungary. Moreover, he is convinced that international financial circles and international organizations he offended with his economic policies are taking revenge on the country.”
It is possible that it is Viktor Orbán who is dim-witted unless the eleven overly friendly economists did not use strong enough language with the prime minister. Here is a picture taken at the meeting. It looks too lighthearted given the seriousness of the situation.
Károly Szász in the middle, Zsigmond Járai and György Szapáry to his right
Perhaps they were not as forceful as András Simor, governor of the Hungarian Central Bank, who referred to “some” people who talk about a speculative attack but “when it comes to credibility and economic fundamentals [Hungary is not Vitali Klitschko] but a punching bag.” And as far as the word “speculation” is concerned Simor gave a lesson in linguistics: “I would call attention to the thesaurus which provides synonyms to the word ‘speculate’–to think, contemplate, muse, ruminate, reflect on.” He pointed out that anyone “who has savings must speculate–think about–what to invest in; for the short or long term, into foreign currency or into bonds.” No wonder that Viktor Orbán doesn’t want to hear what András Sinor has to say. In fact, if it depended on the prime minister, Sinor wouldn’t be the governor of the central bank today. He prefers those smiling guys above.
The price? High. A government politician observed that he couldn’t tell whether Matolcsy is sticking with the notion of a speculative attack against Hungary out of conviction or because of his loyalty to Viktor Orbán. On the other hand, Viktor Orbán is totally convinced! The delegation, according to this informant, will be instructed to negotiate very hard and to go the last yard. The question is whether the IMF and the EU will be in the mood to haggle with the Hungarian delegation that is getting its instructions from a man who sees the world through very peculiar glasses.