On February 23 I wrote a post about the immediate reactions of the Hungarian government to the European Commission’s recommendation that part of the cohesion funds be withheld if Hungary doesn’t satisfy the requirement of having a budget deficit under 3% of GDP in 2012. And one-off measures to close the gap won’t count.
The reaction was an outcry that got more and more violent. At first, the Commission’s proposal was described as “unfounded and unfair,” but later the language got stronger. Viktor Orbán himself found the decision “illegal.” His office issued a statement that maintained that the Commission’s recommendation “contradicts the spirit of the Treaties since it imposes sanctions in response to a presupposed future event.” The statement ended on the standard stab at being conciliatory: “nevertheless the [Hungarian] government remains ready for continued consultations.”
There was still hope in Budapest that the Orbán government could garner enough support from the finance ministers of the member states, whose approval is necessary for the recommendation to be implemented. Orbán visited Germany while János Lázár was dispatched to France. Orbán in his speech on the occasion of the twentieth anniversary of Deutscher Wirtschaftsclub tried to show his best side. He set out to convince the politicians and businessmen present that investing in Hungary was a wise business decision. However, he couldn’t resist adding the following: “The Hungarian way of thinking makes a distinction between colonizers and allies. Those who are only interested in our markets according to our way of thinking are colonizers. Those who need our labor as well are our allies. Our relations with German businessmen are exceptionally good because they were the ones who understood most rapidly and most thoroughly this Hungarian way of thinking.”
The speech otherwise was full of criticism of the European Union’s “old-fashioned and obsolete ideas” that stand in the way of economic recovery. He also indicated that he was ready to speak before the finance ministers on March 13. Or, as he put it: “I’m ready to enter the lion’s den and enjoy myself there.” This was not just a turn of phrase. Orbán seriously thought that he could repeat his performance at the European Parliament where he showed his sensible and cooperative side. He was seriously planning to attend the meeting of the Council of Europe prior to the Ecofin meeting. There were many optimistic statements to the effect that Hungary will be able to convince enough finance ministers to support the Hungarian position.
The lion’s den: meeting of the Ecofin
Ildikó Csuhaj, the well informed journalist of Népszabadság, learned from reliable sources that Orbán was already working on his speech which he hoped would change the minds of Europe’s finance ministers. The Hungarian government was apparently hoping to win over the Austrians and perhaps the British in addition to some of the so-called Visegrád countries (the Czech Republic, Slovakia, and Poland). Orbán himself wanted to travel to Germany before the Ecofin meeting, but such a trip couldn’t be arranged and I’m almost certain that it was not Hungary’s choice. János Lázár also repeated the government’s position. They will not change course and “the battle is not yet over,” he said on February 27.
On March 1, Orbán was once again in Brussels to attend the summit of the European People’s Party. Here he made a rather puzzling statement about the dispute over the cohesion funds. “The whole thing is straightforward. It’s is a technical question that follows its own path and will be solved.” On the same day János Lázár reported from Paris that he had a meeting with Jean Léonetti, the minister in charge of EU affairs, who apparently assured Lázár that he doesn’t believe the charges of the media and the Hungarian opposition that democracy is endangered in Hungary. That’s all very nice, but it does not translate into French support of Hungary on March 13.
It became clear only on Friday, March 2, that Orbán’s efforts had failed. In his regular Friday morning radio conversation Orbán admitted that the Union’s finance ministers will most likely endorse the recommendation of the Commission. He assured his listeners that Hungary within six months will remedy the situation and therefore the country will not suffer a penny’s loss.
By the time Orbán returned to Brussels to sign the eurozone treaty later in the day he was enthusiastic about the Union’s economic and financial prospects. He even welcomed the strict rules imposed on the member states and admitted that strict budgetary policy will benefit Hungary in the long run. He no longer claimed that his government has pursued a successful economic policy but said instead that “the direction is correct and there are some signs of success already.” He promised that by the time the finance ministers gather in Denmark they will have in front of them the Hungarian proposals on adjusting the figures for the 2012 budget.
He added that Hungary had abandoned the idea of trying to get allies in Ecofin because he doesn’t want to make a political issue out of an economic question. A complete turnabout, and then Orbán wonders why his colleagues in the EU don’t trust him.
Our poor Viktor’s life is like that silly movie from the sixties: “Mardi? C’est donc la Belgique!” (“If It’s Tuesday, This Must Be Belgium” – “Ha kedd van, akkor Belgium”):
Victor doesn’t care what he says. If one ploy doesn’t work, well, he’ll try another tack. It’s like zig-zagging on the football field. Anyway, how could his followers not agree?
What he says is sacrosanct. What the people don’t know is that they’ve been mis-identified: they are not lobotomized sheep. No, they’re cows and they’re being milked now, and tomorrow and tomorrow and tomorrow….And of course, it’s not Orban, or the Fidesz hacks; no, it’s G*d’s gentle-fingers working their magic, at least, so says the Church…
“they will have in front of them the Hungarian proposals on adjusting the figures for the 2012 budget”
That should be a very interesting set of figures!
Paul: “”they will have in front of them the Hungarian proposals on adjusting the figures for the 2012 budget” That should be a very interesting set of figures!”
A very skeptical American friends of mine says: “No problem, they will falsify the figures. It is easy.”
Accepted, Éva, but a falsification that manages such a magic trick should be pretty obvious.
There’s no way OV can get the deficit under 3% using ‘normal’ economic methods, without drastically cutting public spnding and/or raising taxes even further.
The EU know that, so he hasn’t a hope – no matter what fairy tale he spins.
Thinking about it, the problem OV has got with this is pretty much the same one as he’s got with the IMF/EU loan.
He thinks he can bluff his way through, but he won’t be able to. He’ll either have to introduce the austerity measures the IMF will demand and made the legal changes the EU will insist on, or he’ll have to find the money elsewhere – or do without.
This looked like a fairly ‘token’ shot across his bows at first, but it’s actually a very carefully aimed reminder of the reality that is to come.
Let’s hope the Greeks keep quiet for the rest of the year, so the EU can concentrate on Hungary.
What really needs to be done is to assess data of the govt. tax money. Who is the highest paying tax contributer by percentage? I perceive that hungarian telecom is the biggest producer of tax revenue followed by the plainsmen and our businesses. Hungary really needs to revamp the tourist arena to keep us afloat. Higher taxes and severe austerity measures cannot function like it is perceived to do.
The brilliant education of Ersek Gyula Marfi by the lost soul, Gyurcsany:
I have no doubt that the Viktator and his little chums will falsify the figures. The problem for them is that the ‘Books’ have already been ‘Cooked’ at several different levels.
One of the Viktator’s problems will be that those parts of the budget which are allocated to ‘support his cohorts’ do not represent the ‘actual peculations’ which have already occurred.
In his speeches the Viktator will promise the earth, he will criticise conventional economic ideas, He will denigrate double entry book keeping. He and his minions will write in Hungarian using obscure words, but the alternative truths will not appear in the ‘Official Translations’.
The problem for him and his plans will be that the EU has its own people who will make truer ‘estimates’ than the figures served up by Hungary. This will be a source of dispute and fuel accusations made by the Hungarians.
What neither the Viktator nor the Hungarian public realise is that the whole business is because they have been ‘rumbled’ and have to be brought back into line.
The Viktator will have little option but to conform or to leave the E.U. and be isolated because of geography. which everway he turns he will have to wriggle like an eel.
When is Simon’s term as governor of the bank up?
Doesn’t it end in early 2013?
Won’t Victorious get his hand on the bank’s 32 billion euros then?
Could Victator be stalling for that very moment?
The above website is no longer accessible…
@Eve: “They will falsify the figures..”
Frankly, I don’t see how ANY deal is possible with Victor: who can trust him?
It seems that both the EU and Victor have the same stalling strategy in mind: Victor’s, to get at the central bank’s reserves; and the EU’s…hoping against hope that somehow
Victor will be replaced.
Politicians donot like opposing views. By the way, would Klubradio survive here? Remember Bill Maher, an articulate democrat, against the Iraqi war. He was silenced, sponsors to his show withdrew, (with some political pressure). We don’t need Media Authority here. Never use a frontal attack, outflank, bypass the opposition. Orbán should learn how things are done here.
Well, Bill Maher is alive – and on HBO …
Just look here:http://en.wikipedia.org/wiki/Bill_Maher
So what’s your problem, Joe ?
And Maher just gave 1 Mio $ to the Obama campaign – not your type of guy, Joseph, I’m sure …
PS: What I like most about Maher:
Maher received the Richard Dawkins Award for 2009 from Atheist Alliance International “for his efforts to further the values science and reason in the world.”
The award for Maher is well deserved. He IS my type of guy. The point is serious dissent is not tolerated here. We have monkeys like Ron Stewart or Howard Stern dominating the media and holding the attention of listeners until the next commercial. That is how the system works.
Please cut and paste the address for reading the Gyurcsany reply:
I can access the website.
@Joe “Never use a frontal attack, outflank, bypass the opposition. Orbán should learn how things are done here”
You mean like centralizing the news source (MTI), puting FIDESZ members in the leadership. Falsify the news in the public television and radio, also led by FIDESZ members, and pump taxpayer money into extra-right rags, like the MNO and the Magyar Hirlap? It seems Orban didn’t need you education, Joe.
Today the problem is not the Media Authority. They haven’t done anything serious besides assisting in the Klubradio scam. They took their ginormous bonuses last December and that’s it. I tend to think that this committee was just a diversion, the threatening censor image for west, while the mass public media was silently taken over. We were barking on the wrong tree.
This just in, the economy is now so bad in Hungary that the Russians have made OV redundent!!!
Mutt Damon wrote:
“Today the problem is not the Media Authority. They haven’t done anything serious besides assisting in the Klubradio scam.”
Absolutely true. The government has discovered that it is more effective to simply starve any oppositional press by denying them content (i.e no interviews with leading government members) and, more critically, denying them placement of government-paid advertising.
The media law can now be altered to conform to EU norms, the media council can be reduced to cushy patronage positions, doing nothing at all, and the government can still control the press in a way the EU probably cannot touch. Very effective. Undemocratic, but effective.
I would really like to see some figures published comparing the distribution of government ads in the last government and the present government. But I suspect the present government, in their spirit of non-transparency, will neither publish their figures nor explain the process through which private media are selected. Either open public bidding or a systems in which publication is evenly distributed across papers of record regardless of ideology would be fair, but without transparency, who knows?
Hate to say it, but manipulation of govt advertising budget is common in other EU countries. A lot of alternative or political newspapers and magazines publish as a labour of love and continually require support from rich or NGO backers (like Népszava). Remember in the last government, the mystifyingly awful Nap-Kelte, which only got the plug pulled once Fidesz established an early grip on public TV? This was part of the same nepotistic process.
This is the real Penny Sue Oswalt.I prefer not to be a non-govt. entity.Not to change the subject but what type of music klubradio is forced to play? I am a music buff, is it secular or christian?Does anyon know the difference?
It is apparent that Viktor Orban will always be in the lions den. But will he lie aside and sleep with the lions, like the prophet Daniel or….will he be eaten up alive! Best of luck….Premier!
@Wondercat Hey, It’s OK. Penny is probably Johnny Boy … Who cares? If she (?) says accidentally something smart who cares who she/he is. At least the fan of King Stephen … We are all faceless here.
I think all the European agencies are just giving Orban enough rope to hang himself.
I said in a previous response that the EU are hanging Hungary out to dry – and it continues. They can do something – and that’s nothing! He won’t get the IMF money – he will not get the cohesion funds from 2013.
Just one little fly in the ointment – I think the vote has to be unanimous and Poland has already promised its support.
Orban will have great difficulty amending his 2012 budget to a real 3% of GDP, without any of his tricks. Like a turkey voting for Christmas he voted for the new pact (while the UK and the Czech Republic didn’t) and this requires countries to reduce their future structural deficit to a maximum of .5% of GDP when the debt is reduced to below 60% (80% at the moment! So no hope there). As Hungary’s debt is 80% they will be allowed to run a deficit of 1% – some hope!
Austerity and tax increases beckon. (Whoops there goes the unflat-flat tax!)
The EU must be heartily sick of Orban and his dissembling – and his special ‘Domestic’ rhetoric which differs so much from his ‘International’ rhetoric. The EU know they just have to go through the motions – and that’s what they are doing.
Some of you think Orban is one step ahead – and is planning without the IMF funds. I don’t think so. He knows he needs the funds desperately – the bond yields will be unsustainable without the Insurance Policy. And yes he will brook no resistance to get his hands on the Central Bank reserves
Orban and his lacky’s are slowly slowly slowly walking into the trap – while they tighten the noose around their necks themselves – conveniently. And Orban is matching all this with bravado as is his character – but pride comes before a fall as he will soon find out. Of course he will say he doesn’t need the IMF again – but he will have messed up and he will know it.
(Penny Sue Oswalt – I don’t understand yr posts. “Real” “Non-govt. Entity”? “Klubradio forced to play music” (You don’t understand the situation – no one is forcing K-R to play music) “Does any one know the difference?” “Secular or Christian?” – You may have noticed but we haven’t dignified your questions with a response. What are you up to?)
@Charlie, time will tell if OV abandons the IMF path for not but I wouldn’t bet against him trying. They must be out probing the market makers to see if they can float the bonds. These intermediate bond offerings are also testing the markets. The results have been mixed but do suggest that they might be able to float without the IMF. What makes me believe this is the clock is ticking and it doesn’t appear to be doing anything.
Joseph Simon: “Remember Bill Maher, an articulate democrat, against the Iraqi war. He was silenced, sponsors to his show withdrew, (with some political pressure). We don’t need Media Authority here. ”
You are right. They were the conservatives who put pressure on the show, not he democrats (liberals). Conservatives, just like Orban… does it ring a bell? hmmm
Also, I though that you live in Canada. Am I wrong.? Why are you keep saying that “we” and “here”? Shouldn’t you say “we the conservatives” or “them” and “there”?
Penny Su Oswalt: “pparent that Viktor Orban will always be in the lions den. But will he lie aside and sleep with the lions, like the prophet Daniel ” Can you speak human language? Orban is ain’t a prophet and you are not his follower so get a grip and communicate on human level. NOBODY makes Orban walk into anywhere. He keep saying that he will handle it on his own. Send him a letter to ask him not to go. Case closed.
I think the reality now is that OV will need the money, and the only way he’ll be able to get that much money will be from the IMF/EU.
He has been hoping there’ll be some other way round this, but he’s running out of time. He’s also been hoping that he’ll be able to bluff and bargain his way out of the restrictions/changes the EU want. But, again, his luck has run out – there is no ‘clever’ way out.
So, he’ll have to take the money and he’ll have to make the changes.
But this is not the victory for democracy/sanity it might seem. For a start, it leaves OV in charge and with his power base (and the great majority of this changes) entirely intact. And, of course, it also gives him the money to carry on doing, more or less, what he wants to do to Hungary.
Once he’s swallowed his pride, his mind will turn to how he can make use of this turn of events (I suspect he is already starting on this new tack). The obvious thing will be to blame the EU and IMF for all the unpopular measures and for any targets Fidesz fails to hit. He has been effectively handed an everlasting Get Out Of Jail Free card.
So, what’s the bad news for Orbán? Quite simply, it’s not Fidesz that will reap the benefits of all this. Fidesz will stir up a huge swell of feelings against foreigners and against the EU, more and more nationalistic propaganda will be wheeled out, and times will get a lot harder for most people.
And only one party will benefit from all this – Orbán’s bastard political child, Jobbik.
Orbán will survive and may even prosper, but the price Hungary pays will be a huge shift to the extremist, nationalistic, racist loony right.
“Can you speak human language? Orban is ain’t a prophet…”
Orban is playing a no-lose game.
Don’t get money from the IMF? Turn to the Russians, or break open the $32 billion piggy bank in a year’s time.
Nothing works? Retire with his multi-millions. The country sinks? Who cares? “Serves does nasty ‘white’s right for 1000 years of bullying us poor gypsies…”
Paul: “I think the reality now is that OV will need the money, ”
Which one is it? Orban keep saying that he does not need money from the IMF, what he needs is a “line of credit”, a “guarantee”. If he only needs a “guarantee”, then he will not negotiate, if he is willing to negotiate, he needs more than a guarantee.
some1, I was surprised that OV did not join the dissenters (UK and Czech Republic), which makes it likely that he really needs the support from the EU. Why else such cooperation in the establishment of new rules that oblige Hungary – given that a not so number of Hungarians (or Americans from Ohio) already feel “walked over”…
I just read Orban’s statement in Germany that Hungary’s “dignity” has been injured. What dignity? Schmitt Pal as President and Orban Victor as Prime Minister!
Anyone detect any dignity in either of those two?
Joseph Simon:”Politicians donot like opposing views. By the way, would Klubradio survive here? Remember Bill Maher, an articulate democrat, against the Iraqi war. He was silenced, sponsors to his show withdrew, (with some political pressure). We don’t need Media Authority here. Never use a frontal attack, outflank, bypass the opposition. Orbán should learn how things are done here.”
Maher has had a show on HBO immediately after he was kicked off a commercial station. Politicians in the US do not control the press. If you imply that, you don’t know what you are talking about.
Joseph Simon: “The point is serious dissent is not tolerated here.”
How is this point made? Who or what does not tolerate dissent? Because a commercial station threw out Maher? If I remember correctly he made some very inflamatory statements about 9/11, those were not well received at that time and a commercial station does care about people watching its commercials. Nbody stopped Maher from standing on the street and expressing his views (or on another station that was interested in having him). Finally he did get on HBO.
@Joseph Simon “would Klubradio survive here?”
Do you own a radio? You should turn it on occasionally. It’s a pretty entertraining device you know … Check this out:
@ Charlie,From what I was reading off the different articles from the CEO of Klubradio. The government advertising for the station were taken away.As a result the station is forced to rely on monetary donations from listeners. I assume that this is custom. I do not have access to Klubradio so perhaps I do not know what their format was before all this started.As to what Iam up to is nothing sneaky,is it too much to ask the PM and Parliament to be blatently honest?
Penny Sue: “I do not have access to Klubradio”
If you have a computer you do have access: http://www.klubradio.hu/ click on Élő adás.
when will hungary return the propertys to it legal owners instead of selling them of to avid international monopolys and spend this moneys in surviving and not giving it to its legal owners…………………..
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