Just this morning Péter Róna, an economist who spent most of his life in the United States and Great Britain, said in an interview that he had given up trying to make sense of the Orbán government’s so-called economic policy. A few days earlier Ádám Gere, an American-trained economist and a follower of Friedrich Hayek’s economic philosophy, refused even to consider “whatever this gang is doing in economic policy.” When the reporter inquired whether Gere meant the government when he was talking about this bunch [társaság], Gere answered that it doesn’t deserve to be called a government and expressed his opinion that the “whole bunch” is actually a collection of communists. What he meant was that the leading Fidesz party members in their thinking are still followers of the state socialism in which they grew up.
Gere is not a diplomatic man. He doesn’t pussyfoot around. He calls it as he sees it. And twenty-four hours after this interview Viktor Orbán offered a perfect demonstration of what Gere had in mind.
The prime minister, claiming that his batteries needed recharging, spent two weeks relaxing. There was a faint hope that perhaps he would return a little wiser. Well, that’s not the case. He made another speech lasting an hour and a half containing announcements that were described by Privátbankár, an Internet financial paper, as “shocking.”
The speech was delivered in the inner courtyard of the Jurisics fortress in Kőszeg, very close to the Austrian border. The occasion was a festival called Tranzit–Festival on the Border. According to reports, an audience of 1,000 filled the whole courtyard. Among the shocking announcements let me mention first that Orbán finds “the direction of current economic policy the only possible one.” Moreover, this policy is so successful that “its revision is unnecessary.” What is needed is “more perseverance.” The policy will also include a further reduction of the income and corporate taxes.
When asked about the “economic war of independence,” Orbán explained that this strategy became necessary because of the high sovereign debt load and that “this war must continue.” Victory, as far as Orbán is concerned, is guaranteed against the European Union because Fidesz-KDNP has a two-thirds majority in parliament and “that two-thirds stands steady [áll mint a cövek], and even if there were some kind of problem the fifty percent is guaranteed.”
The two-thirds majority was also used to repurchase important companies. “We bought MOL shares from the Russians, some of the water companies from the French, Rába from the Malaysians, Ferencváros [football club] from the English, and momentarily we will buy E.ON from the Germans.” He quickly added that naturally Hungary doesn’t have only conflicts but also has allies.
As for higher education, Viktor Orbán seems to be convinced that his reforms will make Hungarian higher education the most competitive in Europe. He repeated the incredible idea that the entire cost of the country’s higher education must be borne solely by the students. They would be able to receive student loans that could be paid back over a period as long as thirty years at an interest rate of 1 or 2%.
He repeated his resolve to introduce pre-registration before actual voting. “The system must be changed … There are counterarguments and there will be an uproar [balhé], we will be attacked … We must stand and defend our point of view.”
I don’t think I have to spend much time on the claim that the government’s economic policy needs no revision. This time it was András Schiffer (LMP) who announced that the extreme heat must have affected the prime minister’s senses. While most analysts view the Orbán government’s introduction of the flat tax as its original economic sin, Orbán plans to compound that sin, further lowering taxes for both individuals and business. It sounds crazy.
One also wonders what Orbán had in mind when he announced that victory against the European Union is assured by his government’s two-thirds majority in parliament. On the face of it, the two have nothing to do with each other.
As for the government purchase of the MOL shares from the Russians, if I were in his place I would keep my mouth shut on the subject. If I recall properly, the Hungarian government bought the stock at 23,500 forints; it is currently trading at 16,15o. For a 21.2% stake the Hungarian government paid 1.88 billion euros or about 500 billion forints; if they were to try to unload their stake today, they would have lost about a third of their investment. The Russians, by contrast, who bought the stake in 2009, had a 40% return on their investment.
As for the repurchase of the E.ON gas and electricity company, the Financial Times Deutschland called the idea “madness” and added that it seems that “gulyás communism” is returning to Hungary. The high price of energy will not be solved by nationalizing the utility companies. They can offer cheaper prices only by receiving state aid paid by the same taxpayers who are getting cheaper gas and electricity. That is economic madness, said the paper. Moreover, with yet another nationalization Orbán is playing a dangerous game because foreign investors are already leery about Orbán’s Hungary. Just lately, the Coca Cola Company decided in the last minute not to open a new factory in Hungary. Instead they will be investing in Romania.
And boasting about buying Ferencváros, a football club, is truly ridiculous. It has been a losing proposition for years. Never mind, the government just decided to spend 20 billion forints building the club a new stadium.
What Orbán practically single-handedly is doing to Hungarian higher education is a crime. The brightest and most enterprising students are leaving the country to study in western European countries where they will most likely pay less for a better education than they could receive at home. Some talented students will never even get to college because of the extremely high tuition fees. Orbán, who received a free education and most likely even got a stipend, suddenly thinks that scholarships are unnecessary.
As for voter registration, we will hear endlessly that after all this is how it is in the United States. But in the United States there is no ready-made election list as there is in Hungary. Registration in Hungary’s case serves only one purpose: to limit the number of voters and filter out those who are not likely to vote for Fidesz.
And finally a few more gems from the speech. When talking about voter registration he announced that Hungary had become a “world nation” (világnemzet). “The socialists [szocik] are behind. They are still in Hungary squeezed between borders. Hungary has expanded like tripe beyond the pot.” The reaction to this kind of nonsense was predictable. Nándor Gúr (MSZP) said that Hungary hasn’t expanded anywhere, especially not from a pot. Hungary is not a dynamic country, but rather is lagging behind. András Schiffer (LMP) couldn’t make heads nor tails of some of the prime minister’s announcements. He couldn’t figure out what the pot and the tripe had to do with voter registration. Neither can I, but then I doubt that even Viktor Orbán knows anymore what he is talking about.