Hungary

American-Hungarian relations are crumbling

Let me summarize what we know so far about the U.S. action against certain Hungarian businessmen and government employees.

Initially it was reported that ten people were banned from entering the United States, but by now that number has been reduced to six. We definitely know of one businessman who reported on his fate to ATV. It was he who mentioned three employees of the Office of Taxation and Customs (NAV). One of the three was allegedly the president of NAV, Anikó Vida. The spokesman for the tax office did not deny the charge. If the number six is correct, there are still two people about whom we know nothing.

Although the Hungarian government feigns total ignorance of the details and keeps repeating that it is unable to move against the corrupt officials, in fact they have known for two weeks about the American resolve to pursue those Hungarians who have been trying to blackmail American firms and extort kickbacks of billions of forints from them.

M. André Goodfriend, chargé d’affaires of the U.S. Embassy in Budapest, sketched the timeline of events this afternoon. According to him, on October 6 he had a talk with Levente Magyar, one of the undersecretaries in the Ministry of Foreign Affairs and Trade. During the meeting Goodfriend explained the significance of Proclamation 7750, which is an executive order signed by George W. Bush in 2004. The Proclamation gives the State Department power to ban corrupt individuals and their families from entering the United States. Such a ban can be imposed only by the undersecretary for political affairs–in our case by Wendy Sherman, who is the department’s fourth-ranking official. (Here is a handy chart of the structure of the State Department.)

Levente Magyar must have understood the gravity of the situation because a subsequent meeting was arranged at the request of the Hungarian foreign ministry between Péter Szijjártó and André Goodfriend. This meeting took place on October 13. The American chargé repeated everything he had already told Magyar. Szijjártó then insisted that he reveal the names of those would be affected by the ban. Goodfriend in turn explained that the American government never reveals names in cases connected to Proclamation 7750. What the U.S. expects is swift action against the culprits.

Let’s stop here for a minute. I assume that Viktor Orbán was notified immediately after the encounter between Magyar and Goodfriend on October 6, and I also suspect that the prime minister’s advice was to insist on “proof” from the Americans. When that failed, in typical Orbán fashion the decision was made to launch a counterattack. NAV leaked information to Napi Gazdaság, a financial paper owned by Századvég, a consulting firm and think tank close to Fidesz, that the United States is contemplating evoking Proclamation 7750 against certain Hungarian businessmen in retaliation for NAV’s tax probes against certain American firms. If the Hungarian government hadn’t decided on this counterattack, we perhaps would never have found out about the travel ban on the six, still unnamed individuals. Colossally stupid move, but I think it is typical. Viktor Orbán always has to have the last word.

Since October 16, the day that Napi Gazdaság published its article containing the disinformation concocted by the Hungarian government, the controversy between the United States and Hungary has been escalating rapidly. The Hungarians kept insisting on “creditable proof” while the Americans steadfastly refused to fall into the trap. Moreover, while at the beginning the controversy seemed to be connected only to widespread corruption in Hungary, as time went by it became obvious that the United States might also take action against the Orbán government’s increasingly anti-democratic behavior. A day after the appearance of the accusations against American businesses in Napi Gazdaság, an article was published in Foreign Policy magazine from which we learned that “at a meeting last month, the Community [of Democracies] set in motion a process that could result in Hungary’s removal from the council and withdrawal from the Community. If Hungary leaves, it will be an international acknowledgment  that the nation has ceased to be a democracy.”

What is the Community of Democracies? It is a global intergovernmental coalition of states founded in 2000 at the common initiative of Madeleine Albright and Polish foreign minister Bronislaw Geremek. The organization is headed by a Governing Council consisting of 26 countries, among them Hungary. Apparently it was the United States that suggested that Hungary be removed from the Council and perhaps even from the organization. Or perhaps Hungary might consider a voluntary withdrawal from the Community in order to avoid embarrassment. The likelihood of an American initiative in this case was reinforced by André Goodfriend’s observation that such a move might be warranted under the circumstances.

M. André Goodfriend at one of his press conferences

M. André Goodfriend at one of his press conferences

While the Hungarian government is stonewalling, the U.S. chargé d’affaires in Budapest, most likely following instructions from the State Department, is delivering tougher and tougher messages to the Hungarian government during fairly frequent press conferences at the embassy. Perhaps the strongest language could be heard this afternoon when Goodfriend explained the reason for American action. In Hungary prior to 2010 the level of democracy and transparency, especially in comparison to some other post-socialist countries, was high. But while in other countries the trend is toward greater democracy and transparency, in Hungary the opposite is true. “If that trend continues it may reach a level where the United States can no longer cooperate with Hungary as an ally.” Clearly, the United States is not joking–as Antal Rogán assumed only yesterday during an interview.

Let’s return briefly to the three high officials of the Hungarian tax office who most likely are implicated in the case. In what way can they engage in fraud and corruption? Here is an explanation offered by Dávid Jancsics, who is currently conducting research at the City University of New York. His expertise is corruption. He learned from two independent sources that the NAV employees demanded kickbacks from two American companies in exchange for tax breaks and a lower VAT. Apparently they demanded 2 billion forints in exchange for these favors, money that the American companies were supposed to pay to a foundation associated with Fidesz for purposes of “research and analysis.” In addition, the NAV officials promised heavy fines on the American firms’ competitors. When the Americans didn’t bite, the NAV officials began threatening them with tax probes. It was at this point that the firms turned to the American embassy and reported the bribery attempts. The implication of this analysis, if it is accurate, is frightening because in this case the tax office is part and parcel of a corruption scheme that appears to be centrally organized.

This takes us back to an old story about a whistleblower at NAV who claimed that high NAV officials refused to investigate obvious fraud cases. András Horváth, the whistleblower, said that he was mostly involved in investigating companies that dealt in agricultural products. Index came to the conclusion that one of the two American companies in question was Bunge, a leading agribusiness and food company. It is a global firm with 35,000 employees in forty countries, including Hungary. They produce among many other things cooking oil sold in Hungary under the label Vénusz. It was well known that the management of Bunge was very unhappy about the VAT fraud and that their efforts to enlist the help of NAV were fruitless. It is possible that after a lot of complaints from the Bunge management NAV officials offered to do something about the competition’s fraudulent business practices but only at a price.

Hungarian journalists in the last few days have asked several business groups, like the German-Hungarian Chamber of Commerce, about the extent of corruption in Hungary. The answer is that foreign companies have known for years about corruption involving billions. “Hungary is a part of the Balkans” by now, and the situation is only becoming worse. According to foreign business leaders, Hungarian business life is corrupt through and through. Healthy competition is impossible under such circumstances.

Péter Szijjártó is leaving Budapest for Washington tomorrow to meet Victoria Nuland. I wouldn’t like to be in his shoes.

The state of the churches in Viktor Orbán’s Hungary: An exchange of views

Today I’m republishing an exchange of letters between György Hölvényi, a Christian Democrat who is a member of the Fidesz European Parliamentary delegation, and H. David Baer, associate professor at the Texas Lutheran University. The reason for the exchange was an article that appeared in The Economist entitled “A slippery Magyar slope.” The article was about the “ill-named law on ‘the Right to Freedom of Conscience and Religion, and on the Legal Status of Churches, Religious Denominations and Religious Communities.’” Hölvényi, who before becoming a MEP was deputy undersecretary in charge of the government’s relations with churches, national minorities and civil society, came to the defense of the much criticized law. Since the article in The Economist was republished by Human Rights Without Frontiers (HRWF), Hölvényi sent his reply to that organization, which subsequently included it in its newsletter. Baer, an expert on Hungarian religious affairs, decided to respond. His reply was also published in HRWF’s newsletter. I thought that this exchange of letters, which shines a light on the Orbán regime’s attitude toward religious freedom, was worth republishing.

First a few words about György Hölvényi. He comes from a devout Catholic family. His father was a Cistercian priest who eventually left the order and married. The young Hölvényi became involved with the Christian Democratic movement and in 1989 was one of the founders of the Christian Democratic Union. He spent many years in Brussels serving the parliamentary delegation of the European People’s Party in various capacities. As a result, his name was practically unknown in Hungary. That changed in May 2012 when he was named assistant undersecretary in Zoltán Balog’s Ministry of Human Resources.

Prior to that date the post was occupied by László Szászfalvi, who was a Hungarian Reformed minister just like Balog himself. Apparently the Catholics in the Christian Democratic Party raised a stink: two Protestant ministers were at least one too many. A Catholic must be found. Szászfalvi had to depart and came Hölvényi.

In the most recent elections for the EU parliament Hölvényi was number 12 on the Fidesz list. The party had to do very well for Hölvényi to get to Brussels. One reason for his low rank on the list was that certain positions were reserved for ethnic Hungarians from Ukraine, Romania, and Serbia. But the size of the Fidesz victory was such that he made it, and now he is a member of the new European Parliament.

The article in The Economist pointed out that “getting recognition as an ‘incorporated church’ required a two-thirds majority in Parliament. So what should be a simple administrative decision was turned into a political one, in which legislators have to assess the merits of a religion…. As a result of the law, at least 200 religious communities, including Methodists, Pentecostalists, Seventh Day Adventists, Reform Jews, Buddhists and Hindus faced a downgrading of their status…. In February 2013, Hungary’s Constitutional Court ruled that 67 groups had been deregistered unconstitutionally. However the government seems to have ignored the ruling. A government ministry rejected the written requests of at least four deregistered bodies to be added to the list of incorporated churches.”

Gábor Iványi, one of the victim's of the Orbán regime's church law

Gábor Iványi, one of the victims of the Orbán regime’s church law

With this introduction here is the exchange of letters. First, György Hölvényi’s letter written immediately after the appearance of the article in The Economist. David Baer’s letter was published only a few days ago in the HRWF newsletter.

 * * *

Response to the Erasmus blog post “A slippery Magyar slope,” September 25th 2014

The recent post of The Economist’s blog Erasmus on religious freedom in Central Europe (“A slippery Magyar slope”” by B. C., September 25th 2014) makes several misleading statements and offers a rather personal interpretation of the existing legal regulations on churches in Hungary.

Basic aspects on the registration process of churches have not been detailed in your blog post. Firstly, all associations dealing with religious activities are registered solely by the courts in Hungary. A politically highly neutral system. These communities operate independetly from the state, acoording to their own principles of faith and rituals.

The blog post makes references on “incorporated churches” in Hungary. It is crucial to know that the category of “incorporated churches,” as you call it, does not affect religious freedom at all. It is simply about financial aspects such as state subsidies for churches running social activities for the common good of the society.

It must be pointed out that many European countries apply legal distinctions between different religious organisations for various reasons. Quite often it is the Parliament who is entitled to grant them a special status (e.g. in Lithuania, Belgium). Besides, there are a number of European countries where the constitution itself places an established religion above the rest of the religious communities (e. g. in Denmark, Finland, Greece, Malta). For the record, it needs to be mentioned that the Parliament is involved in special recognition processes of the churches at different later stages also in Austria, Denmark, Portugal or Spain. In general, the European Union leaves the rules on the foundation of churches in the Member States’ competence.

As the post correctly recalls, the original Hungarian regulation on churches of 1990 was probably the most permissive in Europe. Uniquely in the world, more than 300 registered churches operated in Hungary for decades, enjoying the widest range of financial entitlements provided by the state, with no respect to their real social activities. The amended Church Act provides for a complete freedom of conscience and religion in Hungary, at the same time it eliminates errors of the uniquely permissive regulation.

When looking at international commentaries of the issue let us focus on the facts again. The relevant opinion of Venice Commission on the issue of religious freedom in Hungary stated that the Hungarian regulation in place “constitutes a liberal and generous framework for the freedom of religion.” The resolution of the Constitutional Court in Hungary referred to in your blog post did not make any reference to the freedom of religion in Hungary. On the contrary, the government’s intention with the new legislation was widely acknowledged by the Court. The US State Department’s report on religious freedem of 2013 does underline that the Fundamental Law and all legislation in Hungary defends religious freedom. Facts that have been disregarded by the author of your post.

Last but not least, the alliances of the non-incorporated churches in Hungary recognised and declared in a joint statement with the responsible Hungarian minister that they enjoy religious freedom in Hungary.

In contrast to the statements of your article, incorporated churches in Hungary include the Methodists: the United Methodist Church in Hungary is a widely recognised and active community in Hungary, as well as internationally. The fact is that Mr Iványi’s group has not been included in the UMC itself and is not recognised at all by the international Methodist bodies. Describing it as a “highly respected” church is again a serious factual mistake, reflecting a lack of information on the issue.

Coming finally to the issue of the European Court on Human Rights’ decision: some of the member judges formed special opinions to the appeal of the affected churches. Although the Hungarian government is challenging the decision, at the same time it started negotiations with the appealing communities on the remedy process.

In conclusion, I would highly recommend that your blogger B.C. pay wider attention to the facts to better understand regulations on church affairs that have been in place in Europe for decades and centuries.

HÖLVÉNYI György
Member of the European Parliament for Hungary / EPP Group

 * * *

H. David Baer’s reply:

Mr. Hölvényi writes to defend a church law that the ECtHR has found to breach the European Convention and which the Hungarian government refuses to amend.  He would thus have us believe that religious communities in Hungary enjoy religious freedom even as they are not protected by the rule of law.

Mr. Hölvényi urges that we stick to the facts. The fact is that in 2011 the government of Hungary retroactively “deregistered” religious communities already recognized as churches under Hungarian law.  The fact is that in 2013 Hungary’s Constitutional Court found this deregistration procedure unconstitutional.  The fact is that after 2013 the government of Hungary blatantly ignored the Court’s decision, refusing to treat unconstitutionally deregistered religious communities as legal churches.  The fact is that in 2014 the European Court of Human Rights found that Hungary’s unconstitutional church law also violated the right of religious freedom and the European Convention.  The fact is that the Hungarian government has still not, as of this day, acted to abide by the European Court’s decision.

Mr. Hölvényi knows these facts, because prior to being an MP in the European Parliament he was the state undersecretary responsible for dealing with the churches in Viktor Orbán’s government.  As undersecretary, Hölvényi worked closely with Zoltán Balog, Minister of Human Capacities, to obstruct implementation of the Constitutional Court’s decision so as to deny deregistered religious communities their constitutional rights. Just this past month, Péter Paczolay, the president of Hungary’s Constitutional Court, lamented openly in a public address that the Court’s decision on Hungary’s church law had never been respected or implemented.  Mr. Hölvényi bears direct responsibility for this.  Thus, to listen to him aver that Hungary’s deregistered churches enjoy religious freedom is a little like listening to a man caught stealing his neighbor’s shirt and pants aver that his neighbor has the freedom to wear underwear.

Religious communities in Hungary enjoy religious freedom the way NGO’s in Hungary enjoy freedom of association. Denied equality under the law and subject to opaque regulations, deregistered religious communities, like unpopular NGO’s, are subjected to arbitrary and expensive audits, hindered or prevented from raising money, attacked in the government controlled media, and harassed by local officials.  Mr. Hölvényi, a member of the European Parliament, should know that when citizens aren’t equal under the law they aren’t equally free.

Instead of defending Hungary’s indefensible church law, perhaps Mr. Hölvényi should encourage the government of his country to respect the rule of law, uphold its international commitments, and abide by the European Convention.

David Baer
Texas Lutheran University
USA

Ten Hungarian businessmen and government officials can never enter the United States

A bombshell: the U.S. government placed ten Hungarian businessmen and government officials on a blacklist of sorts. They are barred from ever entering the United States. The businessmen in question are known to belong to a small circle of people very close to Fidesz. As for the government officials, they are apparently employees of the Hungarian equivalent of the Internal Revenue Service.

As of now there are two narratives of the event circulating in the Hungarian media. One is the government version, leaked to Napi Gazdaság, a financial paper recently purchased by Századvég, a Fidesz think tank. The other comes from the U.S. Embassy in Budapest.

Let’s start with the government version of the story. The Hungarian internal revenue service became suspicious of some American firms doing business in Hungary and launched investigations into their  finances and tax returns. The U.S. government decided to retaliate by barring several Hungarians from ever entering the United States. Behind this “diplomatic duel” are the recent critical statements of former President Bill Clinton and President Barack Obama with regard to the Hungarian government’s attacks on NGOs. The two American Democratic leaders were especially upset over the fate of the Ökotárs Foundation, the distributor of the Norwegian Civic Funds, whose tax number was recently suspended. Why this particular concern? Because, the article contends, the Norwegians are also generous contributors to the Clinton Global Initiative.

At the end of the article Napi Gazdaság casually mentions that because of the link between the American Democratic Party and the Norwegian government, the Ökotárs Foundation “will not go against the interests of the Democratic Party.” So, the Hungarian government’s investigation of Ökotárs will actually have a beneficial effect. It may “place Hungary’s reputation on neutral ground in the political warfare between Democrats and Republicans.” Here Századvég is speaking, the think tank that owns Napi Gazdaság. Századvég just received a huge contract from the Orbán government to engage in public relations/propaganda in Washington over the next few years. But there might be a bit of a problem here; as we will see later, its CEO is barred from entering the U.S., which might crimp its effectiveness.

Napi Gazdaság contacted the U.S. Embassy, where they were told that they know nothing about any investigation of American firms and that the decision of the U.S. government to bar some individuals from entering the United States has nothing to do with alleged probes by the Hungarian internal revenue service. However, they have good reason to believe that the people on the black list were engaged in criminal activities. They tried either to force American firms to give them kickbacks or to extort special favors from them. They cannot release the names because of American laws prohibiting it.

It didn’t take long for one of the people involved to arrive at the doorstep of ATV and to offer some details about the case. According to him, he and nine others were asked to visit the U.S. Embassy where they were administered the bitter pill. ATV was not allowed to reveal the name of the informer, but the article described him as “an especially important partner of the Hungarian government who currently is participating in several important projects. In the last few years his name appeared frequently in the Hungarian media…. He considers himself a businessmen who is very close to Fidesz.” There is a sentence in this report that strongly suggests that our mystery businessman is not entirely innocent. After all, he found “the measure disproportionate, which further damages American-Hungarian relations.” So he did something illegal, but he thinks that the punishment is too harsh.

corruption4

Both the Fidesz parliamentary delegation and the Ministry of Foreign Affairs and Trade reacted promptly to the news. Fidesz sticks to the story leaked to Napi Gazdaság. The United States government is putting pressure on Hungary because they want to avoid the investigation of certain American firms by the tax office. M. André Goodfriend, the U.S. chargé d’affaires, was called into the ministry, but before his appearance Judit Fülöp, the ministry spokeswoman, gave a short press conference. She stressed the Hungarian government’s zero tolerance toward corruption. She announced that they  are ready to investigate the cases but are waiting for documentation from the American Embassy.

Meanwhile investigative journalists were hard at work. From unofficial sources 444 learned that in the last year and a half there were several instances where government officials and businessmen closely associated with the government party approached American firms for kickbacks. In one case a large American firm applied for an EU grant. At first the government turned them down, but in the second round the management was told that they would receive the money but only if they hire a certain consulting firm that would perform no work at all.

A few hours later some names also appeared. Among them is Péter Heim, CEO of Századvég, the think tank that was launched by Fidesz in its infancy and that is now tasked with improving Hungary’s image in Washington. The news about the Hungarian internal revenue service seems to have been on target. Ildikó Vida, the head of the office, is on the list. Vida is one of the original founders of Fidesz. She is the same age as Viktor Orbán and was a fellow student in the college where the party was born. This is not the first time that she is in charge of the tax office. She held the same position during the first Orbán administration between 1999 and 2002. One must keep in mind that the Orbán government uses the internal revenue service as a political club. Index reported that in addition to Vida two other employees of the tax office are also involved. And then there is Árpád Habony, the eminence grise of Fidesz. He has no official position, but  he is perhaps one of the most important men behind Viktor Orbán. I devoted a whole post to him a while back. Rumors about his shady financial affairs have been circulating for some time. His source of income is shrouded in mystery. According to the latest information, Habony denies being on the list and is planning to visit the United States shortly.

On the surface the affair is solely about corruption, but the American reaction to these cases is politically charged. One has to assume that in countries with rampant corruption such as Hungary the U.S. Embassy receives reports of bribery attempts often enough. There are several ways of dealing with such cases. For instance, one can pay a visit to the country’s foreign ministry and report that such behavior is unacceptable. At the same time the American official can express his hope that in the future there will be no discriminatory measures against American firms and that extortionist activities will stop. But in this case the United States government came out with the big gun. The Americans in Budapest must have known for years about the high level of corruption in government and its satellite business circles, yet it is only now that they decided to move into high gear. This is, in my opinion, a political message to the Orbán government and part and parcel of a new, more forceful policy being conducted by the U.S. government toward Hungary.

Gazprom stores some of its natural gas in Hungarian facilities

I guess it is high time to talk about Vladimir Putin and natural gas.

First, Putin’s trip to Serbia. Serbia and Russia have had close ties for more than a century. The only exception I can think of is the 1948-1954 period when Tito was considered to be the “chained dog of the imperialists.” But otherwise in all conflicts Russia stood by Serbia. Serbia’s financial situation is pretty grim at the moment, and I understand that without Russian help Belgrade would be in even greater economic and financial trouble than it is. The closeness of the two countries is demonstrated by the fact that the date of the celebration of the 70th anniversary of the liberation of Belgrade by the Red Army was moved forward to accommodate Vladimir Putin’s schedule. The military pomp on display to impress the Russian president was noteworthy, especially in view of Serbia’s insistence that she wants to become part of the European Union.

Putin decided to use this opportunity to deliver a stern message to Europe. He warned Brussels that as long as the Ukrainian crisis is not settled, naturally in favor of Russia, gas supplies to Europe might be disrupted just as happened in 2006 and 2009. He said that he himself will do everything to avoid such an eventuality, but if it does happen it will be the fault of the European leaders.

Almost at the same time news reached the West that Hungary will store Gazprom gas. You may recall that Hungary purchased the German-owned E.ON gas storage facilities in 2013 for an incredibly high price. The story of that purchase is well summarized in an article in the Budapest Beacon, according to which the Hungarian state-owned company, MVM, may have lost $2.6 billion as a result of the deal. Given the pervasive corruption in Hungary, analysts were certain that the purchase of E.ON’s business units was “a success story for certain business circles but a huge loss for the national economy as a whole.” This assessment might not be on target. It is more likely that Viktor Orbán’s eagerness to purchase E.ON at whatever price stemmed from a deal with Gazprom to use Hungarian storage facilities. Aleksey Miller, CEO of Gazprom, visited Budapest in October 2012. At that time Miller agreed to such a deal, but only if the storage facilities were in the hands of the Hungarian state. A year later Orbán obliged.

gaztarolok

So, what kinds of storage facilities are we talking about? E.ON Földgáz Storage Zrt. has five underground facilities in which it can store 3,740 million cubic meters of natural gas. According to Hungarian sources, these underground storage facilities are the best and the largest in the region and  fourth in size in Europe. As a result, in 2009 Hungarians were more or less unaffected by the gas shortage when Russia stopped the flow of gas through Ukraine to Europe.

I was pretty sure by the end of September that something was afoot concerning Russia’s use of Hungary’s storage facilities, but it was only on October 10 that I read an AFP report which noted that although Hungary is steadily buying gas from Russia, it is also storing Russian-owned gas. The article noted that “it is unusual for the company to store gas still owned by Gazprom, which is locked in a dispute with Kiev that some fear could see transit through Ukraine halted for the third time in a decade.” According to the spokesman of MVM, the owner of the facilities, “with this agreement Gazprom will be able to comply with its long-term contract obligations, should there be problems on the transport routes.”

Kyiv Post tersely noted the Russian-Hungarian deal without adding any editorial comment. But Kiev must see the deal as an antagonistic move because, with it, Russia can supply gas to Europe at the same time that it squeezes Ukraine.

As for the amount of stored gas owned by Hungary, this number is difficult to estimate. Throughout September the Hungarian media was full of complaints about Hungarian tardiness in filling the country’s storage facilities. In mid-September HVG claimed that they were only 58 percent full. Moreover, if one can believe MTI, a month later, on October 16, the situation was exactly the same. Opposition politicians naturally blame the Orbán government for its tardiness and predict terrible consequences come winter. But I suspect that something else might be behind the procrastination of the Hungarians. The Russian-Hungarian deal to store Russian gas in Hungary was signed only at the end of September, and it is very possible that in return for its “generosity” Hungary managed to get a lower price on Russian gas. I can’t think of any other rational explanation for not filling the storage facilities as quickly as possible. Especially since other European facilities are 80-90% full. Perhaps we will eventually learn the real story, although I’m sure that the Hungarian government will do its best to conceal it.

The Hungarian socialists at a crossroads

While Fidesz and the Orbán government are busy hatching their latest plans to further restructure the Hungarian state and Hungarian society we cannot do more than wait for the day, which should come soon, when we find out what kind of austerity program will be introduced. There is no use talking about, for instance, all the leaked information from Fidesz politicians concerning the huge reforms of healthcare and higher education. We will turn to these topics when there are enough facts to make an assessment of the government’s plans. I should note, however, that Hungarians expect the worst. Pessimism about the future has grown in the last few months.

So, for the time being, let’s concentrate on party politics. Yesterday I wrote about the Ferenc Deák Circle, comprised of those MSZP politicians who consider cooperation with other parties of the democratic opposition essential for an effective stand against the growing “dictatorship of democracy” that Viktor Orbán has introduced in the last four and a half years. On the other side are the MSZP politicians currently running the party who have moved in the opposite direction. According  to József Tóbiás, the party chairman, there is only one party on the left and that is MSZP. He made it crystal clear in the last few days that his party will never make any compromises and will never join any other party. MSZP will break with the “authoritarian leadership of Ferenc Gyurcsány.”

Tóbiás’s dislike of Gyurcsány is common knowledge. When Gyurcsány and some of his fellow rebels left MSZP, Tóbiás was relieved. He announced that “MSZP gained an opportunity to go its own way and define itself as a leftist party.” That was in October 2011. Mind you, the departure of the “alien” elements from the party did not increase MSZP’s popularity. But Tóbiás is not one to engage in self-criticism. The current message to the other smaller parties is: never again will we have anything to do with you because you are the cause of our decline.

József Tóbiás and other MSZP politicians have been lashing out, condemning “Gyurcsány’s peremptory Führer-like politics” (Gyurcsány hatalmi, vezérelvű politikája). Leaders of three “platforms” within MSZP–the “Left-wing Gathering,” “Socialist,” and “People’s Group”–announced their support of Tóbiás and his policies. (There is also a “social-democratic platform”; Ágnes Kunhalmi belongs to that group.) The leaders of these three platforms asked the party leadership “to free the left from the trap Ferenc Gyurcsány, the former prime minister, forced them into.” Tóbiás needs no urging. In addition to breaking all ties to other democratic parties, he is ready to completely reorganize MSZP.

Source: Index / photo by Levente Haralamposz Hernádi

Source: Index / photo by Levente Haralamposz Hernádi

What kind of a party does he have in mind? Interestingly enough, his MSZP would be structured like Fidesz. Currently, the key figures in the nationwide structure of MSZP are the county chairmen. Some of these chairmen have become extremely powerful over the years and, since they hold the purse strings, they are difficult to dislodge. These chairmen were the ones who elevated Ferenc Gyurcsány to be the party’s candidate for the premiership in 2004 and they were the ones who dethroned him in 2009. Fidesz, on the other hand, is built around electoral districts. In Tóbiás’s scheme, each electoral district will have a chairman who can be removed by the central leadership if he is found wanting.

Apparently Tóbiás can’t remove the county chairmen because that would require a revision of the by-laws. What he can do without any congressional approval is to take money away from them. With that move, these formerly all-powerful local party leaders will become mere figureheads.

It is not only the structure of Fidesz that the MSZP leadership is ready to copy. The new MSZP will be “nationally committed party (nemzeti elkötelezettségű párt). This shift is not entirely new. MSZP’s leadership under Attila Mesterházy already thought that since Fidesz is so successful with its nationalist propaganda and since Viktor Orbán and Fidesz politicians constantly accuse the socialists and the liberals of “internationalism” and “cosmopolitanism,” perhaps success for the socialists requires greater emphasis on the nation. Tóbiás even managed to smuggle the concept of “Christian values” into his speech when he equated them with the socialists’ “social sensitivity.”

The divide between the left-wingers and the liberals in MSZP is fundamental. The question is whether the Orbán government can be dislodged by a united opposition or by a single, large socialist party. A similar debate went on in LMP a year and a half ago. The party’s parliamentary delegation was almost equally split between those who followed András Schiffer, who saw his party’s future in going it alone, and the rebels who were convinced that Schiffer’s tactics were suicidal. It was this debate that precipitated the split in LMP. The current situation in MSZP closely resembles what LMP went through then, although the split is not so even.

At the moment it looks as if the majority of the top leadership agrees with Tóbiás. According to them, the party’s problems began the day Ferenc Gyurcsány took over. He was too liberal, and therefore supporters of the party whose hearts were on the left abandoned them. Well, we know the answer is not that simple. Most likely Ildikó Lendvai was correct when she said in her Facebook note yesterday that the dividing line in Hungarian society is no longer between left and right. And if so, the whole reshaping of the party by József Tóbiás and his friends is most likely an exercise in futility.

Post mortem: election results of the Hungarian municipal elections

Now that I’ve had a good night sleep and listened again to all the speeches by the various party leaders, I came to the conclusion that there are two points on which everybody agrees. One, that Lajos Bokros, the candidate of the united democratic opposition, did extremely well and, two, that the greatest loser in these elections was András Schiffer’s LMP.

So, let’s first talk about the mayoralty race in Budapest. We all know the handicaps Bokros had to overcome. Months of indecision, constant bickering, especially between the twin parties Együtt and PM, and only two weeks of campaigning. I think most people were prepared for a complete fiasco. Four years ago the socialist candidate received 29.47% of the votes but, the analysts predicted, Bokros who claims to be a liberal conservative will receive even less support. Behold, he got 36% of the popular vote. As Bokros likes to say, only 13% less than the victorious István Tarlós who was reelected with 49% of the votes as opposed to his 2010 achievement of 53.37%.

As for the LMP loss, we should keep in mind that LMP’s strength is confined to Budapest. To give some idea of what has happened to LMP in Budapest over the last four years, in 2010 Benedek Jávor, LMP’s mayoral candidate, received 9.9% of the votes. (Jávor since left LMP and joined PM. He is today Együtt-PM’s representative to the European Parliament.) This year’s LMP candidate, Antal Csárdi, received only 5.69% of the votes. I suspect that LMP lost its appeal among voters who came to the conclusion that a tiny party’s lonely fight against the Fidesz colossus is hopeless and perhaps even counterproductive.

Jobbik’s candidate, Gábor Staudt, received the same percentage of votes in both 2010 and 2014, around 7%.  The liberals’ candidate, Zoltán Bodnár, received 2.1% of the votes.

Tarlós’s decrease in support and the surprisingly strong showing of Bokros should give the Fidesz leadership pause, warns even the pro-government Válasz. Árpád W. Tóta, a sharp-tongued and talented journalist, approaches the same topic from the point of view of the opposition. He takes issue with Viktor Orbán’s claim that there is unprecedented unity among Hungarians. In Budapest one-third of 41% of the Budapest adult citizens voted for Lajos Bokros, “whose middle name is Package,” referring to the extremely strict austerity program Bokros introduced as minister of finance. Therefore, he argues, “there must be considerable bitterness” in the electorate for them to vote for Bokros.

onkormanyzati valasztasok

Just as predicted, Jobbik did well. The party’s mayoral candidates received about 100,000 more votes than four years ago. In 2010 the party’s candidates won in three smaller towns but in the last four years they added a few more larger villages, mostly in the northeast corner of the country. After these elections the party has more members in the city/town/county councils than ever before. Moreover, the party’s popularity is no longer confined to its former stronghold in the poorest districts of the country. Jobbik also did quite well in Transdanubia. For example, in Somogy County four years ago Jobbik received 9.83% of the votes while this year it got 19.34%. The situation was similar in Győr-Moson-Sopron County, which is considered to be a well-off district due to a number of large foreign-owned factories.

Finally, here are some general observations and comments. Voter participation has been steadily declining in Hungary ever since 2006. As Political Capital, a think tank, observed, Fidesz’s victories are due solely to the ineptitude of the opposition and voter apathy. Fidesz keeps winning while steadily losing voters. Although the opposition in Budapest didn’t do as well as they had hoped, Fidesz did lose two districts, XIV and XV, in addition to two “towns of county rank” (megyei jogú város). Political Capital published a long list of the towns where votes for Fidesz mayors dropped considerably. Take, for instance, my own hometown, Pécs, where Zsolt Páva won 68.59% of the votes in 2010 but this time got only 39.28%. Admittedly this was the largest drop in popularity but Kecskemét, the home of the Mercedes-Benz factory, was not far behind (79.12% versus 59.31%). Yet the democratic parties are incapable of enlarging their voting base.

There are a few success stories in the otherwise grim picture of the left-liberal parties. MSZP improved its showing in places it won in both 2010 and 2014–three Budapest districts and Szeged. For example, in Szeged László Botka (MSZP) received 52.51% of the votes and his Fidesz opponent 45.84% in 2010; this year Botka got 58.21% while his “independent” opponent with Fidesz backing received only 36.88% of the votes. I might add that while after 2010 Botka had to work with a Fidesz-majority city council of 28, this year there is a clear MSZP-DK-Együtt-PM majority. So, it seems that joint political action coupled with good past performance still works.

MSZP remains the strongest of the three opposition parties, followed by DK and Együtt-PM, but the differences between MSZP and DK are not that great. For example, in Budapest in districts I , XII, and XXIII, DK did better than MSZP, and in several others the differences were minuscule. The situation was the same in some of the larger cities, for example in Debrecen and Nagykanizsa where DK received more votes than MSZP or in Zalaegerszeg where they were neck to neck. So, it’s no wonder that Ferenc Gyurcsány seems to be satisfied overall, although he is disappointed that DK won only one district mayoralty in Budapest instead of the two they had hoped for.

I’m pretty sure that we will spend a great deal more time on the repercussions of the elections and on the intra-party struggles that most likely will follow. The present MSZP leadership seems to be adamant about following LMP’s lead and going it alone against the Fidesz machinery. I suspect, however, that not everybody will follow Tóbiás and the hardliners. Gyurcsány last night announced that a new union party should be open to every democrat, from Gábor Demszky to Lajos Bokros and Ági Kunhalmi! This morning on ATV’s Start Kunhalmi (MSZP) very cleverly deflected the question about her future political plans.

Hungary and the Russian-Ukrainian crisis

A couple of days ago I wrote about the Hungarian far right and Russia and mentioned the Russian accusation that Hungary has been supplying T-72 tanks to Ukraine. At that time the Hungarian government categorically denied the charge, but the case of the “missing” Russian-made tanks is still a subject of debate. First of all, the stories out of the Ministry of Defense were confused. The spokesman for the ministry first claimed that the tanks never left the country: they were just moved from one storage area to another. Then the story took a different turn. The ministry informed the media that T-72 tanks (70 in all) were actually sold to a company called Excalibur Defense Kft. of Székesfehérvár, which received permission from the Czech Ministry of Industry and Trade to transport the tanks to Czech territory.

That deal and the transportation of the tanks to the Czech Republic is most likely for real:  Magyar Nemzet published a facsimile of the “International Import Certificate” attesting to the arrangement. On August 25 the government informed the media that the tanks had begun their j0urney to the Czech Republic. Yet the documents published by Magyar Nemzet did not convince anyone about the final destination of the tanks. Vice Magazine published an article which took it for granted that the T-72 tanks did or will end up in Ukraine. The deal with Excalibur is only a decoy. And this belief is shared by the Russians. Vyacheslav Nikonov, a Russian political scientist and adviser to Vladimir Putin who also happens to be the grandson of Vyacheslav Molotov, in an interview on CNN accused Hungary of illegally selling military supplies to Ukraine.

Today several  newspapers reported that Csaba Hende, minister of defense, may leave his post sometime after the municipal elections. The exact reasons for his sudden departure are not known, but perhaps the clumsy handling of the T-72 tanks might be one of them. Given Prime Minister Viktor Orbán’s excellent relations with Vladimir Putin and his outright antagonism of any sanctions against Russia, providing Ukraine with illegal shipments of weaponry is more than strange. If true, Orbán’s relations with Putin might be greatly damaged and his tarnished reputation in the West is unlikely to improve.

This is not the only strange turn in Hungarian foreign policy. There is also the government’s sudden change of heart about its support for NATO’s anti-Russian moves. Already in his last radio talk Orbán hinted that there might be more willingness on his government’s part to spend 2% of the Hungarian GDP on defense. This figure is the minimum NATO members, including Hungary, agreed to. Since 2010 the government has spent less and less on the armed forces, with the current expenditure a mere 0.88% of the GDP. In that talk he admitted that the country is in noncompliance.

Indeed, two days ago Magyar Nemzet reported that Hungary will arrive in Newport, Wales for the NATO summit with several proposals concerning the Hungarian contribution to the common effort to contain Russian encroachment into Ukraine. The semi-official newspaper is usually very well informed, and therefore we can be pretty certain that the news is correct. Hungary will send a contingent of 100 men to the Baltics to join an international NATO force there. In addition, Hungary will develop the air force base near Pápa. Moreover, Hungary will spend more money to improve the Hungarian military.

Aerial photo of the Pápa Airbase

Aerial photo of the Pápa Airbase

Yesterday HVG reported that several NATO member countries would like to see additional NATO troops in all countries that define the eastern borders of the organization. That would naturally also involve Hungary. According to an unnamed diplomatic source, if such a request is addressed to Hungary it will be almost impossible to refuse it.

Given all these developments one can only marvel at László Kövér’s performance yesterday. The occasion was a meeting of four prominent participants in the change of regime in Hungary–Sándor Lezsák, László Kövér, Mátyás Szűrös, and Péter Tölgyessy–with 20 young historians, journalists, and artists who travel through European countries following the footsteps of 1989. The project, called Freedom Express, was organized by the European Network of Remembrance and Solidarity. The group arrived in Budapest yesterday from Gdańsk and Warsaw. Well, the young visitors were treated to quite a tirade from the third highest dignitary of the country. It was an extraordinary performance that revealed Kövér’s antagonism toward Ukraine and her aspirations.

First, Kövér got upset about some of the questions that had more to do with Hungary’s pro-Russian views than the fine points of regime change in Hungary twenty-five years ago. Then a Romanian participant in Freedom Express asked Kövér a question that included a reference to the Romanian occupation of Budapest in 1919. He indicated that the Romanian army came to Hungary to liberate it from the communists. That really set Kövér off. He began by saying that “there is no reason to bring up topics with which we only irritate each other.”  So, he was in a bad mood even before all the questions poured in about the Russian-Ukrainian conflict and Hungary’s role in it.

Kövér gave his own version of the conflict. “What is going on in Ukraine is a manipulated affair in which the Ukrainians have the smallest role,” he claimed. “The goal of this circus is that it should forever separate Europe from Russia.” Although Kövér expressed his satisfaction with the NATO umbrella over Hungary and although he understands the Poles and the Baltic people who are worried about Russian expansion, Russia has its legitimate security needs. “Who was the American or European politician who asked what the Ukrainians want?” As far as Western media coverage of the conflict is concerned, “the western press lies just as much as Pravda did in the olden days.”

Kövér is also convinced that no democratic developments can be expected from Ukraine because one of the first moves of the Ukrainian government was the suspension of minority rights. (Kövér failed to add that a day later that move was reversed.) As far as he is concerned, there can be no question about the outcome of a military encounter involving “the nonexistent army of the nonexistent Ukrainian state.” Instead, the real solution would be “normal cooperation between Europe and Russia,” but “the chance of that has been lost for the foreseeable future.”

If there is a circus anywhere, I’m afraid it is what Hungarian government politicians have managed to create in the field of diplomacy. And the clowns in this circus are not at all funny.