Month: April 2012

The Orbán government and the Hungarian Kennel Club

I would never have thought that one day I could combine two of my interests, Hungarian politics and dog breeding, in a single blog post. Although about ten years ago I gave up breeding and showing basset hounds, I’m still active in the Basset Hound Club of America (BHCA). I’m what you might describe as the club genealogist, in charge of the monthly stud books the club receives nowadays in electronic form from the American Kennel Club (AKC). AKC maintains a pedigree registry of purebred dogs and promotes and sanctions events for purebred dogs in the United States. Like The Kennel Club (UK) and the Canadian Kennel Club, its history dates to the nineteenth century.

In 1911 a group of European countries banded together to form the Fédération Cynologique Internationale (FCI). By now it is the umbrella organization for the kennel clubs of 86 member countries, located all over the world, including Hungary’s Magyar Ebtenyésztők Országos Egyesülete (MEOE). As a member of the FCI, MEOE can issue internationally recognized registration certificates that attest to the pure-bred nature of the animal. It can also organize dog shows held in Hungary.

All this is pretty straightforward, so I was greatly surprised when a friend who is an AKC delegate forwarded a letter that a fellow delegate had written to the AKC. The subject of the letter was the dreadful situation in which MEOE finds itself after the passage of a new Hungarian law on dog and cat breeding.

In order to understand the situation we must go back to the first Orbán government (1998-2002). Some “dog people” who harbored a grudge against MEOE turned to the Agricultural Ministry, in those days under the direction of József Torgyán (Smallholders’ party), a Budapest lawyer totally ignorant of everything connected to agriculture and I assume also of dog breeding. The malcontents complained that MEOE’s practice of registration wasn’t rigorous enough. The right to register dogs, they argued, should be taken away from MEOE and given to individual breed clubs gathered under a new organization, Magyar Ebtenyésztő Szervezetek Szövetsége (MESZSZ). (For those who don’t know Hungarian, the acronym is pronounced “mess.”) The forty-six dog clubs that were recognized by the government as entitled to register dogs became known as “elismert tenyésztő szervezetek” (ETSZ). MEOE, the official dog registry since 1933, was no longer recognized.

The good old days: All European Dog and Cat Show in Hungary in 2008

Not surprisingly, FCI refused to recognize the registration certificates and pedigrees handed out by forty-six different Hungarian breed clubs.

Although the 1998 law was never annulled, it wasn’t enforced either. Thus 90% of the registrations were still given out by the official Hungarian Kennel Club. Moreover, MEOE carried on with organizing dog shows according to FCI rules and with FCI approved judges.

But now that Viktor Orbán is back in power, the Ministry of Agriculture decided to return to the issue and make sure the law is enforced. Law XXXI of 2012 enacted on April 2 specifies the fines that can be collected for disregard of the law. The penalty in the case of an organization can be as high as 20 million forints (about $92,000).

As the Hungarian breeder who turned to a representative of AKC pointed out, “we are in a Catch 22 situation now. MEOE won’t be able to issue pedigrees, determine and control breeding after May 15, while the ETSZ (recognized) organizations and their umbrella organization (MESZSZ) have no FCI recognition.” The Hungarian breeders are worried about the future of Hungarian dog breeding. They don’t know whether “there is any future for us at all.”

Their worries are well founded. If the FCI doesn’t recognize the registration papers issued by those organizations sanctioned by the government, Hungarian breeders will be at a severe disadvantage. Their dogs’ registration papers will not be recognized at international shows so their animals will not be able to compete. And selling an animal abroad without official registration papers will be well nigh impossible.

Will it take place?

Moreover, after May 15 MEOE can no longer organize dog shows. The huge FCI World Dog Show, scheduled for Budapest in 2013, will be down the drain. Considering that the 2011 show in France had an entry of over 21,000 dogs, this cancellation will be a blow to Hungary’s tourism industry.

But this is how things go in Viktor Orbán’s Hungary where being different from the pack is all-important. And where iron-clad laws are passed based on ignorance and without any consultation.

By the way, an admittedly dated footnote: According to an article in Magyar Narancs from 2003 the government official in charge of dog breeding admitted that he knew nothing about pure-bred dogs. He had a mutt. Now there’s nothing wrong with owning a mutt, but an official in charge of dog breeding should know something about the world of pure-bred dogs.


Agricultural subsidies and the Fidesz oligarchs

The news about Fidesz oligarchs speculating on agricultural land simply doesn’t want to go away. The fascination is understandable. Both newspapermen and readers like dirt, and there is plenty of it in this story.

On center stage is József Ángyán, an agricultural expert and professor at Gödöllő Agricultural Academy, whom some consider a hero and others a madman. Ángyán is no politician even though he has been sitting in parliament ever since 2006. He got there through Viktor Orbán’s benevolence. Or, to be more precise, because his services were needed to implement the Fidesz strategy. His radical ideas about the future of Hungarian agriculture were useful at the time when he and some others, like István Jakab and Gyula Budai, managed to turn small farmers against the socialist-liberal government. He was useful when the pro-Fidesz farmers blockaded roads and drove their tractors to Budapest. Ángyán’s services were rewarded with a high government appointment. In 2010 he became undersecretary of agriculture. Orbán chose Sándor Fazekas, mayor of Karcag and an old Fidesz politico with no background in agriculture, to be the minister.

After reading a lengthy interview with József Ángyán, it seems that Ángyán believed that the ministerial post was going to be his. So he had to be sorely disappointed. However, he was assured by Viktor Orbán during his Felcsút “interview” that the agricultural policy of the Orbán government would be modelled on the Ángyán plan.

What was the Ángyán plan? Instead of large-scale agriculture he envisaged small, 40 to 50 hectare farms cultivated by individual families. Ángyán claims that this is the European model that is most appropriate for Hungary. Small farmers obviously found this idea very attractive and most of them were looking forward to a political change. They were enthusiastic supporters of Fidesz.

By contrast, many experts object in the name of efficiency to an agricultural model based on small holdings. They claim that Ángyán’s plan would have created a Hungary that would resemble an outdoor museum, something like Williamsburg in the United States, in which the designers recreated a world that no longer exists. Time is being artificially stopped.

Outdoor museum

Outdoor museum, Göcsej

Agricultural experts thus welcomed József Ángyán’s resignation about a month ago. At last, they said, Hungarian agriculture will move away from small, inefficient family farms of a few hectares and turn to the formation of large, profitable farms where expensive machinery can be efficiently utilized. It is also likely that Viktor Orbán himself wasn’t exactly heartbroken because one suspects that his embracing Ángyán’s plan five or six years ago served only political purposes: to gain the support of the countryside. It is likely that he himself knew that large farms of thousands of hectares are much better suited to the kind of agriculture practiced in Hungary.

So far so good. But in Orbán’s Hungary the good always has a dark side.

If large tracts of land are distributed for long-term lease at a low cost, the beneficiaries could be people who are committed Fidesz supporters and/or friends. This is exactly what happened while Ángyán, the idealist, watched the process in horror. Some people in the village of Felcsút, where Viktor Orbán grew up and to which he recently returned as a part-time resident, benefited enormously. I already wrote about the Felcsút scandal once. Here I would like to address the business side of the government largesse handed out to friends and supporters.

Obtaining large tracts of land via a low-cost, twenty-year lease translates into a huge profit potential. First of all, the food supply is shrinking and Hungary’s climate and soil are favorable to agricultural production. European Union subsidies also help considerably. Earlier Hungarian farmers got only a fraction of the subsidies handed out to western farmers, but by now they are pretty much on par with the sums a French or German farmer gets. That is, 300 euros or 100,000 forints per hectare. The annual cost of the lease per hectare is only 25,000 forints. So if a farmer manages to get 100 hectares, his yearly income from the subsidies alone will be 7.5 million forints even if he leaves the land fallow. If he has 1,000 hectares–as, for example, Lőrinc Mészáros, Viktor Orbán’s friend in Felcsút managed to get–he will receive the tidy sum of 75 million forints a year. On top of that comes the actual profit from the crops.

But, says Ángyán, it is possible to illegally pass on the land for cultivation to others who then pay rent for the use of the land. A hectare can be leased for about 25,000 forints. Thus, claims the former undersecretary of agriculture, without buying any equipment or investing any money in the land the lessee could easily realize about 100 million forints a year from 1,000 hectares.

According to Origo just in the county of Fejér where Felcsút is situated 90% of all the available land for long-term leases went to eight concerns while the other 10% to twenty-one other applicants. The lucky eight can now cultivate almost 5,000 hectares. Although on paper the maximum size of a plot was to be 1,200 hectares, one group, the Csákvári Mezőgazdasági Zrt., received 1,830 hectares, i.e. 37% of all available land in the county. Who is behind this business? György Antalffy and his family received 658 hectares. The current manager of the company received 192 hectares and one of the employees got 264 hectares. Thus, strictly speaking, the per-family limit was observed. In reality, these people formed a consortium to lease this farmland. Most of the people involved in the transaction live in Budapest and have practically no connection to agriculture. Obviously, these people are not small family farmers but business people making a killing.

The Orbán government is not even trying to hide its supporters’ insatiable appetite for enrichment. Members of the government and supporters of the party feel entitled to the benefits that being in power offers. After all, they stood by Fidesz through eight lean years. It is now time to take advantage of the situation. Wholesale corruption reigns in Hungary. We know what’s going on in agriculture and we’re starting to have a fair idea of what’s going on in industrial concerns owned by friends of Viktor Orbán.

Although certain people are getting very rich, in part thanks to the EU’s convergence program, the country’s economic growth has stalled. While the government lauds divergence over convergence, it is nonetheless eager for the handouts. How much flows to the coffers of Fidesz in one way or another is unquantifiable but I would guess not insignificant. To the victor (and to Viktor) belong the spoils.

Party strife in Jobbik

I must say I didn’t pay much attention to an article that appeared on April 16 in HVG about the resignation of the entire Jobbik political leadership in the county of Borsod. If I had read it more carefully, I would have recognized the name of Zsolt Endrésik, the Jobbik county chairman and member of the Hungarian parliament, because in March 2010 I wrote an article about Endrésik and a fellow Jobbik politician, László Holcman, Jr. The article’s title was “A Jobbik két arca” (Two faces of Jobbik). The conclusion of the article was that although both men are extremists, Endrésik is less belligerent and somewhat more realistic about the current Hungarian political situation than Holcman.

Endrésik began his political career in MIÉP, but in 2003 he became disillusioned with MIÉP and politics in general. A few years later, however, he met Csanád Szegedi, currently a Jobbik member of the European Parliament, who “opened his eyes” and convinced him to return to politics, this time as one of the early leaders of Jobbik.


Before anyone prematurely concludes that the party strife in Borsod is only a storm in a teapot I should mention that the county of Borsod is a Jobbik stronghold. It was here that the party managed to get 27.2% of all the votes cast, ahead of MSZP (15.9%) and second to Fidesz-KDNP with 47.9%. Both Endrésik and Holcman played critical roles in making these results possible. Today, they are against Gábor Vona and direction Jobbik is going. It also seems that Csanád Szegedi is no longer an idol of Endrésik. On the contrary, they seem to be the greatest of enemies. For the time being, Vona and Szegedi are winning. Zsolt Endrésik was expelled from the Jobbik parliamentary delegation and the party began proceedings for his exclusion from the party. The charge is collusion with Lajos Pősze, formerly Jobbik, today an independent member of parliament, and passing “false information” about the party to HVG.

If one can believe, the neo-Nazi Internet site, both accusations are correct. Someone, it seems, hacked into Endrésik’s gmail account and found plenty of evidence that Endrésik had contact with the “traitor” Pősze and also with HVG. From the exchanges among the participants it seems that some members of the party’s stronghold in Borsod view those leaders of the party recently in the limelight as belonging to the lunatic fringe.

Jobbik’s popularity hasn’t risen since the elections in spite of stories to the contrary. In fact, according to Tárki, in the last few months Jobbik has lost at least two or three percent of its voters. Although there are no regional polls, the Borsod Jobbik leaders sense that the popularity of the party has decreased in the county. They seem to blame Csanád Szegedi and Oszkár Juhász, the mayor of Gyöngyöspata, for this decline.

Although we didn’t discuss the case of Oszkár Juhász here, recently a tape surfaced on which one could clearly hear that Juhász and others are discussing the possibility of civil war “when the time is ripe.” When there is a good chance of winning that war. He also talked about the large sums of money that Jobbik is receiving from abroad. Although this might be empty boasting, it seems that there is a segment of the Jobbik leadership that is planning or at least expecting a civil war. Csanád Szegedi is one of them. He quite openly talks about such an eventuality. “If all remains the same, there is a real chance for a revolutionary situation.” Szegedi thinks big. That revolution, just as Mahmoud Ahmadinejad, president of the Islamic Republic of Iran, predicted, will sweep across Europe and from there to North America. For good measure he referenced the “shaman of Rábaköz” who “also predicted such a bloody event in the near future.” There was also mention of “the prophecy of Nyirka.” For those who don’t understand these references to pagan tradition and to the more modern Hungarian occult there is plenty of information about this nonsense online.

So, it seems to me that Endrésik belongs to the somewhat more moderate wing of Jobbik while the central leadership stands united behind Csanád Szegedi, i.e. the lunatic fringe. The messages of this lunatic fringe got as far as Brussels where Hannes Swoboda, leader of the socialist delegation in the European Parliament, noticed his fellow parliamentarian’s remarks and called on European public opinion “to fight against extremism in Europe.” He urged European politicians to raise their voices as soon as such extremist politicians express their unacceptable views.

Well, Szegedi is not easily intimidated. He declared that Swoboda “is talking nonsense.” He doesn’t know the real situation in Borsod. Naturally, he was talking about the large number of Roma in the county. He shouldn’t jabber about things he knows nothing about.

Two years ago when I did some research on Endrésik I found out that he taught in schools in which Roma children were in the majority. He even learned their language and had good relations with the parents of his students. According to Heti Válasz Endrésik doesn’t generalize about Gypsies as Szegedi does. Perhaps that is an element of what lies behind their differences. In any case, for the time being Endrésik is out and Szegedi is being supported by the Jobbik leadership.

Viktor Orbán didn’t give up: Again talks about a Chinese-Hungarian alliance

As I’m looking through my files it seems as if almost nothing has happened in Chinese-Hungarian relations in the last six months or so. It was in mid-November 2011 that Tamás Fellegi made his last trip to China where he negotiated with Chinese businessmen and bank presidents. After that not much could be heard about major Chinese investments in Hungary. The only things I can recall are the establishment of one medium-sized Chinese-owned factory and the setting up of a Chinese Department at the University of Miskolc.

But now China is back in the Hungarian media with a vengeance. In two days MTI released five reports on the newly blossoming Hungarian-Chinese relations. MTI even managed to report on a Le Figaro article on East-Central Europe’s special role in Chinese-European relations. They also found an article in China Daily that specifically noted that “Beijing has confidence in Hungary’s economic growth.”

Looking at the Poland-Central Europe-China trade summit in Warsaw from the perspective of Budapest one would think that Viktor Orbán was the leading light of these negotiations. It is true that MTI mentioned that the Hungarian prime minister attended a meeting where “other heads of East European governments were also present” but they neglect to say that it was a gathering of sixteen prime ministers in addition to the Chinese premier Wen Jiabao.

It was a large affair with three hundred Chinese firms in tow and 450 companies from across the region, including 300 from Poland. From these numbers it is clear that the main player was the host country, which has the largest economy in the area.


Did Viktor Orbán have any role in organizing this summit? Perhaps. The Hungarian prime minister often talked in the past about a kind of mini-union in Eastern Europe that would include Poland, Slovakia, Hungary, and Croatia. This “axis,” as he called the alliance of these countries, was viewed as a cooperative framework for developing the region’s economies. For example, he often talked about building out the infrastructure of the region from the Baltic to the Adriatic. It seems that China is willing to be a major player here, agreeing to set up a $10 billion credit line to support infrastructure and green-economy projects in the area.

It is also true that Orbán was interested in China as an economic player, but he envisaged Chinese economic penetration via Hungary and wasn’t thinking in terms of the whole region of sixteen countries. He wanted to be the chief player and not just one of many.

The current trade summit is different both in scope and in geography from Orbán’s earlier ideas although it definitely fits in with his conviction that Europe is declining and needs the infusion of Chinese capital. Orbán’s speech at the round-table discussion emphasized the indebtedness of Europe, which can be remedied with the assistance of China. In his usual overstatement of facts he claimed that Europe’s current problems can be compared only to the rebuilding of the continent after World War II. “In a new world new allies are born.”

As I see it, the Chinese have something else in mind. Although Wen said that “we have to face [the challenge of an uncertain global economic recovery] together,” the Chinese are seeking investment and bilateral foreign trade opportunities. Other than through their contributions to the IMF, they are not helping European governments free themselves of their indebtedness. As far as I know, they are not big players in Hungarian government bond placements.

As for allies, sometimes Orbán doesn’t seem to be aware of the meaning of words. The last time when Wen Jiabao visited Hungary he talked about a “strategic alliance” between China and Hungary that raised quite a few eyebrows.

Orbán also met Wen Jiabao alone, and after the meeting he announced that in the future “China might become the most important actor in Hungary’s economic life.” Considering that currently Hungary’s trade is almost exclusively with the countries of the European Union, such a turnabout would be dramatic indeed. According to reports, China wants to double its bilateral foreign trade with the region in five years. That projection is unlikely to propel China to the top spot among Hungary’s trading partners.

Last night Péter Szijjártó informed the Hungarian public on MTV’s Az Este (The Evening) about the events and the accomplishments of the Warsaw trade talks. He also announced that Viktor Orbán will be visiting Beijing in the second half of the year. This morning the prime minister reaffirmed that the Chinese are expecting him in Beijing. He added that he has been working on closer Chinese-Hungarian relations for years. “We are close to the fruition of our labor.” He added that Li Kequiang, the deputy prime minister of China, will be visiting Hungary next week when further economic agreements will be signed. He didn’t elaborate on the nature of the agreements.

Orbán’s critics often pointed out that he first tried to attract Russia as a major player in the Hungarian economy, but it didn’t matter how often Tamás Fellegi visited Moscow the only result was that the Russians managed to get rid of their MOL shares at a very good price. Then came the China card. Several trips to Beijing resulted, until now at least, in very little. There were trips to the United Arab Emirates and Dubai but the emissaries came back empty-handed.

This time around there is perhaps more of a chance of success, although it will be difficult for Hungary to compete with countries like Poland, the Czech Republic, Slovenia or even Slovakia for investment opportunities. But even if more Chinese investment arrives in the region it is unlikely that it can trump investments from the West. Yet, it is quite clear from what Orbán had to say in Warsaw and this morning in Budapest that this is what he would like to see happen.

The end of the “Hungarian Watergate”?

On today’s Galamus Zsófia Mihancsik wrote one of her superb opinion pieces (“The Hungarian judiciary against the country of mafiosos”) about yesterday’s stunning news that all four of the accused in the UD Zrt. case were found not guilty. The judge also gave a piece of his mind to the prosecutors about the politically motivated accusations and the shoddy investigative work. In Mihancsik’s opinion the news of the day wasn’t so much that the European Commission gave its blessing to initiating talks with the IMF but this not-guilty verdict. She called it a triumph of the still independent judiciary.

I must have talked about this disgraceful affair at least five or six times since September 12, 2008 when it became known that Fidesz, then in opposition, used a company headed by former leaders of the National Security Office to spy on the Hungarian government. The socialist government’s National Security Office became suspicious of a company called UD Zrt. and, after getting the appropriate warrants, began monitoring the company’s telephone conversations. Hundreds and hundreds of calls implicated leading members of Fidesz, including László Kövér, today speaker of the house, in the spying activities.

This was terrible news for Fidesz, at the time leading in all the opinion polls. If it turned out that the party was involved in criminal activity the case could seriously damage not only the reputation of the party but its chances of winning the elections in a year and a half. If a serious investigation had revealed culpability, important Fidesz politicians could even have ended up in jail.

Thus, Fidesz had to act immediately. Instead of going on the defense, it launched a full-fledged offense with the help of the Hungarian prosecutor’s office. I wrote about this on April 13, 2011 in “Return to the Hungarian Watergate.” To make a very long story short, the obviously guilty parties, UD Zrt. and the Fidesz politicians involved, were transformed into the injured parties and György Szilvásy, minister in charge of the secret service in the Gyurcsány administration, and Károly Tóth, MSZP deputy chairman of the parliamentary committee on national security, were sued for unlawful activities that were injurious to the good reputation of UD Zrt.

An offshoot of the UD Zrt. affair was a Fidesz attempt, again through UD Zrt., to ruin MDF and its chairman, Ibolya Dávid. One must keep in mind that Viktor Orbán held a grudge against Dávid, who refused to run in the 2006 elections on a common ticket with Fidesz. To everybody’s surprise MDF managed to cross the 5% threshold necessary for parliamentary representation. Orbán was certain that it was MDF and within MDF especially Ibolya Dávid who was responsible for his failure to become the next prime minister of Hungary. I guess that after Ferenc Gyurcsány, it is Ibolya Dávid whom Orbán hates most among his political opponents.

Fidesz through intermediaries–István Stumpf (today a judge on the constitutional court) and András Giró-Szász (today the government spokesman)–offered a couple of billion forints to a young MDF member vying for Dávid’s place as head of the party. The young man, Kornél Almássy, was picked to make sure that at the next elections MDF would not stand in Fidesz’s way. While monitoring the UD Zrt. telephone calls, a call was recorded on the very topic of the removal of Dávid from her post. This tape was subsequently sent by an unknown person to Ibolya Dávid who, without mentioning names, released the information to the public and asked the prosecutors to investigate. The prosecutors, instead of investigating UD Zrt., decided that the guilty parties were actually Ibolya Dávid and her deputy, Károly Herényi.


Károly Herényi, Ibolya Dávid, Károly Tóth and György Szilvássy

Szabolcs Kerék-Bárczy and József Debreczeni sitting behind them

The two cases, which were initially independent of each other, were combined by the prosecutors, apparently for political purposes. Fidesz, which I assume was behind the whole show trial, wanted to make sure that the Dávid-led MDF, a moderate right-of-center party, was being put on trial alongside an MSZP MP and a minister of the MSZP Gyurcsány government.

According to the judge, Csaba Vasvári, the accused parties acted in the spirit of the constitution and therefore they are not guilty. On the other hand, the prosecution’s witnesses were unreliable and the indictment was inadequate, sloppy, and biased.

Yes, they were found not guilty in the lower court but those prosecutors who usually handle political cases decided that they will appeal. Whether there will be such a brave judge in charge of the case at the higher court as Csaba Vasvári was no one knows.

A lengthy interview of Ibolya Dávid by Gyögy Bolgár can be read on Galamus: Lessons of an absurd trial.” Put it this way, Ibolya Dávid, although at the moment saying nothing about her future political plans, is fired up as a result of these past four years. She rightly pointed out in this interview and also on ATV’s “Egyenes beszéd” that the outcome of these political show trials is immaterial for those who order them. The real aim is to ruin the political careers of their rivals. Ibolya Dávid was found not guilty but the stakes go behind her individual fate. The ruination of the moderate right-of-center MDF was the goal, and Fidesz managed to achieve that.

The same is true about Szilvásy and Tóth. Szilvásy was a close political and personal friend of Ferenc Gyurcsány. Putting him in jail and parading him handcuffed strengthened the public image of MSZP as rife with criminal activities, particularly in affairs connected to Ferenc Gyurcsány. Szilvásy’s problems are far from over. He is still being accused of spying for the Russians. Another trumped up charge, in my opinion.

Meanwhile the blurring of distinctions between MDF, MSZP, and lately DK is proceeding apace. MTI in its description of the final outcome of the trial casually mentioned that in the audience one could see József Debreczeni and Szabolcs Kerék-Bárczy. The reporter “helpfully” pointed that that Debreczeni today is one of the deputy chairmen of DK and that Kerék-Bárczy attended the meeting that declared the establishment of Demokrata Koalíció. HírTV’s reporter after the trial approached Ibolya Dávid and asked her whether it is true that she was offered the deputy chairmanship of DK. Dávid in no uncertain terms told the woman that she does not give interviews to HírTV. It is against her principles.

And finally a footnote to this whole disgusting affair. UD Zrt. also sued the National Security Office and the Hungarian state for 1.8 billion forints claiming damages to the owners’ personal reputations. Yesterday, on the very same day Szilvássy and Tóth were found not guilty, the Hungarian state agreed on a full settlement. UD Zrt., a company that was illegally spying on the Hungarian National Security Office and other branches of the government, will receive 1.8 billion forints of taxpayer money in compensation!! I’m sure they will be appropriately grateful to Fidesz. Incredible.

After the Orbán-Barroso talk: Did Orbán win?

Yesterday I said something to the effect that a very short official meeting can mean only two things: the participants agreed on all points and therefore there was no need to waste time or they disagreed on everything and, after acknowledging their differences, they concluded the meeting.

I should have mentioned another possibility: the real negotiations took place earlier and the meeting was organized simply to reaffirm the understanding of the participants. I believe that this is what happened in Brussels yesterday.

Let me emphasize that it is very difficult to have any clarity in this matter because at least one of the participants wants to make sure that the Hungarian people don’t understand exactly what happened. Therefore one has to gather bits and pieces of news, often contradictory, from all over to try to put together a full picture.

This morning, after it became evident that the European Union had given its blessing to the start of negotiations between Hungary and the International Monetary Fund, my kneejerk reaction was: “Brussels caved in, after all.” By the afternoon I changed my mind. I decided that the EU had simply changed tactics. Viktor Orbán in fact laid down his arms, as Portfolio rather vividly described the end of the Orbánite war of independence. Orbán came to the conclusion that Hungary could survive without an infusion of cheap money for only a few more months and therefore it was time to call back the troops.

Little attention was paid to the negotiations over Hungary’s national bank conducted by experts of the European Central Bank, the International Monetary Fund, the Hungarian National Bank, a representative of the Hungarian Foreign Ministry, and a representative of the Ministry of National Economy. The meeting took place in Frankfurt, the financial capital of the European Union. The Hungarian government certainly didn’t advertise these important negotiations that took place between April 16 and 18. Other than one brief MTI news report that appeared on the 18th and a short sentence on the subject by Foreign Minister János Martonyi I could find nothing on the subject. Martonyi, speaking on April 16, minimized the importance of the negotiations: “The event is important but the conditions for beginning the negotiations don’t depend on it.The decision is in the hands of the European Commission. The question is whether the Commission regards the Hungarian counter-proposals to be satisfactory or not.”

As it turned out, the changes that were made in the law concerning the Hungarian National Bank on April 17 didn’t satisfy the European Commission and it was at the negotiations in Frankfurt that the Hungarian government was forced to retreat on several points. Now it looks as if even András Simor is satisfied and believes that the independence of the National Bank is assured. Thus, Viktor Orbán’s only job was to tell José Manuel Barroso that he stands squarely behind the changes hammered out in Frankfurt. The spokesman of the Commission announced today that the Hungarian government at last is ready to satisfy all the demands of the Commission concerning the law on the Hungarian National Bank.

Capitulation during negotiations

Capitulation during negotiations

Capitulation during negotiations

So, what will happen as far as negotiations with the IMF are concerned? The negotiations can begin but not as soon as Viktor Orbán optimistically predicted yesterday. Today Tamás Fellegi talked about setting the date for some time in May. As for the duration of these negotiations? I suspect that it will not be a speedy process because the successful conclusion of the negotiations also depends on the Hungarian government’s fulfillment of all five demands of the Venice Commission. To remind everyone, here are the five points: (1) The president of the National Judicial Office must justify its decisions and must provide legal remedy following a decision. (2) The president of the National Judicial Office, after her nine-year term, cannot be reelected. She cannot serve even in an interim capacity after the conclusion of her term. A vice-president must be nominated who can run the office while waiting for a new president to be nominated and elected. (3) Neither the president of the National Judicial Office nor any other judicial leader can have the right to move cases to other courts because this provision of the new Hungarian law violates the basic law of fair judicial treatment. (4) The current system of the president of the republic appointing judges for brief durations and many times for “trial periods” must be stopped. (5) Transfer of judges against their will must cease and the automatic termination of their services be forbidden. This will be a very hard pill for Viktor Orbán to swallow.

And we didn’t even mention IMF demands in the economic sphere. Tamás Fellegi, minister in charge of the negotiations, gingerly announced today that there might be an IMF demand to scrap the flat tax introduced with such fanfare by Viktor Orbán as the remedy for all of Hungary’s economic ills, the key to 6-7% economic growth and one million new jobs in ten years. Surely, Fellegi knows more than he is willing to say at the moment. If Hungary is forced to retreat here, it will be a terrible blow to Viktor Orbán.

In addition, let us not forget about the latest brainstorm of György Matolcsy, the so-called Kálmán Széll Plan 2.0. According to experts this new convergence program was thrown together in three weeks or so. The LMP spokesman described it as “a tale put together by Matolcsy and the Grimm Brothers.” There are pages that appear in the document at several places. There are subtitles that are not followed by any text. A quick look at the document revealed that three-quarters of the proposals are revenue-enhancing measures–the introduction of new taxes–and only one-quarter address cost cutting. And, by the way, this is the sixth time since December that the budget figures have been changed. Whether this will impress the members of Ecofin who are waiting for a creditable plan for reducing the budget deficit, I have no idea. Moreover, the IMF will undoubtedly also take a good look at the Kálmán Széll Plan 2.0.

The forced retirement of judges and the question of the independence of the ombudsman in charge of data production are not forgotten either. The European Commission is taking these cases straight to the European Court of Justice. Meanwhile the European Commission is asking the Hungarian government to suspend firing judges who reach their new compulsory retirement age.

So, all in all, I’m more optimistic than I was this morning. The ball is in Viktor Orbán’s court and the final decision is still in the hands of the Council of Europe and the Venice Commission. If Orbán doesn’t play ball there will be no money. And according to analysts Hungary would run out of juice by September without IMF help.

Orbán-Barroso meeting: A breakthrough?

Viktor Orbán arrived in Brussels early because of a scheduled talk at the European Policy Center. In the wake of widespread criticism of his authoritarian tendencies and wrong-headed economic policies, the Hungarian prime minister should have been somewhat humbled and subdued, but in typical Orbán fashion he answered attacks on his policies with attacks of his own on the European Union. In fact, he portrayed Hungary as a “laboratory” for transforming the European Union economically and politically.

I wonder how his audience reacted to this boasting. Here is a small, relatively backward and poor country in the throes of a serious economic crisis whose prime minister wants to lead the way toward the renewal of all of Europe. I bet that the common reaction was: “This man has gall.”

So, a combative Viktor Orbán went to visit José Manuel Barroso this morning at 11:30. We have only the Hungarian prime minister’s description of the meeting who, as his wont, was most optimistic. However, there are signs that perhaps not everything went as well as Orbán indicated.

First of all, the meeting lasted only half an hour. Such a short meeting can mean either that the two sides agreed on everything and there was no need to waste time or, just the opposite, they couldn’t agree on anything so there was no need to continue a fruitless exchange. I suspect that this particular meeting fell into the second category of short encounters.

First of all, it looks as if Orbán arrived in Brussels without a new, concrete agenda on the three infringement procedures. The Hungarian government is not willing to make further changes ensuring the independence of the judiciary and promises alone are unlikely to satisfy Brussels. As far as the independence of the Hungarian National Bank is concerned, Budapest is sticking to its guns on the salary and oath of the bank governor. The case of the ombudsman in charge of data protection is also an issue the Hungarian government refuses to deal with. Orbán made no secret either before or after the meeting that Hungary expects some of these issues to end up in the European Court of Justice. Thus it is unlikely that the infringement procedure against Hungary will end any time soon.

Although Orbán in his usual fashion talked about a real “breakthrough” and announced that “in essence” the negotiations with the IMF can begin within days if not weeks, I wouldn’t bet on such a happy outcome of today’s meeting.

Not only was the meeting short, the scheduled joint press conference was also cancelled.

Early morning in Budapest Tibor Navracsics tempered expectations of arriving at a political agreement between Hungary and the European Commission. In fact, Navracsics indicated that the prime minister doesn’t even want to have an agreement because “the issues at stake are just not that pressing.” But if they are not that pressing, why did Viktor Orbán look so mournful in Brussels?


Viktor Orbán’s arrival at José Manuel Barroso’s office

And the Hungarian prime minister didn’t look any better even later.


Somehow the scene doesn’t suggest that “there are no more obstacles in the way of an agreement,” as Orbán indicated to the newspapermen after the meeting. Orbán admitted that some of the questions will end up in court but was optimistic about the IMF negotiations. We know from Péter Szijjártó that Orbán made promises concerning all three disputed questions, but one is not at all sure whether anyone still believes Viktor Orbán’s promises in Brussels. Everything that has happened in the last three or four months suggests that promises will not do. Brussels wants to see the changed pieces of legislation, and for the time being I don’t see any Hungarian willingness to fulfill the demands of the European Union.

We won’t have to wait too long for the answer. Tomorrow the Hungarian issue will be on the agenda of the meeting of the European Commission. Perhaps the politicians of the Union are so tired of wrangling with Viktor Orbán that they will give the nod to the loan negotiations. I think this would be a mistake, but anything is possible in politics. It seems to me that Olli Rehn, European Commissioner for Economic and Financial Affairs, might be satisfied with a partial fulfillment of Brussels’ demands concerning the central bank. But that is only one of three issues on the table.

What does the Hungarian opposition think of the Orbán-Barroso meeting? Naturally, they are not as sanguine as Viktor Orbán seemed to be after his meeting with Barroso. Both MSZP and LMP are convinced that nothing was accomplished in Brussels because Orbán refuses to compromise. The euroskeptic Jobbik, on the other hand, is convinced that Orbán gave in to the EU and thus further enslaved the country to foreign interests.

Meanwhile the forex market believed Orbán Viktor and the Hungarian forint strengthened considerably today. We will see what happens tomorrow after the meeting of the European Commission.