A sinking ship? Is it time for Orbán’s Hungary to turn westward?

Just as I feared, we will have to return to Azerbaijan, not so much as a diplomatic issue but as a part of the financial plans that may have been behind the decision to release a convicted murderer to Baku. Because surely no one will believe the story the Hungarian Foreign Ministry came up with yesterday, that Hungary was conned by the Azeris. The current claim is that the Hungarians believed in the honesty of the Azeri president and his ministry of justice. And look what happened. Surely, a very unlikely story.

The talk about negotiations with the Azeri government over the purchase of 2-3 billion euros’ worth of Hungarian government bonds turned out to be true. After all, the Turkish bank that was supposed to issue the bonds confirmed it. However, on September 3, the State Oil Fund of the Republic of Azerbaijan issued this statement: “Regarding the news about the purchase of Hungarian debt obligations, the State Oil Fund of the Republic of Azerbaijan publicly reveals that SOFAZ is not considering any investment into debt obligations or other financial tools in Hungary.” Since then we learned that SOFAZ, even if it had wanted to, couldn’t have bought junk bonds in such quantities. Because, let’s not forget, about two years ago Hungarian government bonds were downgraded to junk status. According to Portfolio.hu, SOFAZ’s official investment strategy specifies that only 5% of the fund can be invested in highly speculative assets.

I’m sure that we will never know what was promised. Something had to be, because I can’t believe that Viktor Orbán would be so naive as to let loose a much coveted “national hero” simply as a favor. Just yesterday I heard an interview with Orbán’s old roommate and political ally Gábor Fodor, who knows him well. According to Fodor, to Orbán the notion of making a gesture is a totally unfamiliar concept. He doesn’t even make a secret of the fact. In fact, he boasts about it.

So, I am still going on the assumption that Orbán one way or the other was expecting big bucks from Azerbaijan, the prospect of which now appears to be fading by the hour. Thus it seems that Viktor Orbán is ready to change course yet again. Most likely because he cannot do anything else.

The last time I wrote about the stalled IMF/EU negotiations the prospects for an early agreement seemed grim. The IMF spokesman announced at the very end of August that there was no date fixed for the renewal of the talks that had been interrupted at the end of July. The sticking point was apparently the transaction tax on the Hungarian National Bank, on which Viktor Orbán was insisting. Analysts excluded the possibility of an agreement in the fall and predicted a possible conclusion of the talks sometime next year. Portfolio.hu was even more pessimistic. The economic journalists working for this financial paper were certain that the aid talks will not continue at all. Details of the state of the negotiations a week ago can be found in my August 31 post

So, great was my surprise when I read in the September 3 issue of Magyar Nemzet that the office of Mihály Varga had informed them that negotiations will continue in September. This morning Viktor Orbán himself talked about the resumption of negotiations and expressed his firm belief that a favorable conclusion to the negotiations is  just around the corner. It will occur sometime during the fall. He added that, although there are still outstanding issues that must be ironed out, the negotiations are proceeding well. “The ball is now in Hungary’s court,” he added. As for the transaction tax on the Hungarian National Bank, Orbán indicated that “there is intention on both sides to find a middle ground.” A few minutes later Mihály Varga, the chief Hungarian negotiator, decided to chime in and emphasized that Hungary cannot afford not to have an agreement. Actually, he used the expression “nem úszható meg az IMF-hitel.”

Why this sudden eagerness to talk with the IMF? One reason might be the possibly empty promises of the Azeri government. However, there is another piece of news that most likely reached the Hungarian government sometime in the last twenty-four hours. Bruxinfo.hu reported from Brussels today that the paper had received news from reliable sources that the European Commission may launch an infringement procedure against Hungary on September 27 over the financial transaction tax Hungary plans to introduce in 2013. European Union sources confirmed that, in addition to the European Central Bank, the European Commission also has very strong doubts that this planned transaction tax is in line with EU regulations. As soon as this news hit, the Hungarian forint began to fall. At 2:30 p.m. the euro/forint cross was trading at 284, an hour later at 286.

It is quite possible that Viktor Orbán is becoming desperate. He tried to get money from China, Saudi Arabia, and Azerbaijan and came up empty-handed. He also tried to get out of the obligations that bind Hungary to the European Union. It doesn’t matter how often he tells his followers that Hungary’s economic war of independence against the European Union has been successful, the fact is that without EU assistance Hungary would immediately collapse. Almost everything that’s being built in Hungary is being done with European funds. If these funds were to disappear, Hungary would end up high and dry.

The potential loss of  revenue from the transaction tax is a problem by itself. Without Orbán’s cherished transaction tax on the Hungarian National Bank there will be an even larger hole in the 2013 budget.  As it is, the budget is more than shaky because it is based on overly optimistic economic growth numbers. Orbán got rid of the Budgetary Council that was supposed to be the watchdog over the government’s handling of the budget because he feared that they would look too hard at the government’s figures. So instead of an office with a staff of forty he appointed three men to oversee the budget. Surely, he thought that these men would not disturb much water. Well, he was wrong. Árpád Kovács, the head of the new Budgetary Council, is demanding reliable data from the Ministry of National Economy; he refuses to accept the figures offered by the ministry. Right now the ministry and the budgetary council are at loggerheads.

According to analysts, as it now stands the proposed budget is short by about 500-600 billion forints.  Without changing course it is unlikely that the country can survive economically. It seems that Orbán might have to give up some of his “unorthodox” policies. For example, the flat tax. Moreover, he seems ready to turn his ship from its eastward course back toward the old, decrepit, tired Europe that is incapable of handling its own problems but ponies up a lot of money for Hungary.

Of course, there are still people who are skeptical about Orbán’s real intentions. Péter Oszkó, finance minister in the Bajnai government, is one of these. In an interview this morning he expressed his belief that because of the forint’s fall this afternoon Orbán and Varga came out with these optimistic stories about the negotiations in order to calm the nerves of the markets. Nothing will come of the negotiations.

I’m a little less skeptical. Mostly because I heard this afternoon that Viktor Orbán will be paying an official visit to Berlin in October where he is going to meet Chancellor Angela Merkel. They will be talking about bilateral diplomatic relations and the further strengthening of  economic ties. These forthcoming negotiations were prepared by Péter Szijjártó in Berlin where he met Christoph Heusgen, foreign adviser to Merkel and a member of the staff of the chancellery; Cornelia Pieper of the foreign ministry; and Peter Hintze of the economic ministry. Szijjártó told his negotiating partners that Hungary agrees with Germany on the necessity of a strong Europe and Hungary will support all German efforts in this direction. According to Szijjártó, there was agreement that “after the crisis is over the European Union’s economic engine will be cooperation between Germany and Central Europe.”

So, is Orbán getting desperate or is this just another one of his typical games? We will see.

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44 comments

  1. I stated in March that there would be no deal this year… we’ve got less then 4 months left and it appears as if the government is still no closer to a deal.. and that has now cost well in excess of 600,000,000,000HUF.. humm doesn’t seem close to the hole in the budget?

  2. London Calling!

    What is a puzzle is that Hungary has no intention of using the IMF loan – it will be there just as a backstop – but Orban will still need to raise an enormous amount of money elsewhere.

    “No austerity here.”

    He intends to spend spend spend by nationalising the energy companies – and banks (and waste companies too!) in time for the next election – so he can reap the dividend of concessions to their customers. (Apparently the energy companies are experiencing large outstanding customer’s arrears – so will he buy them off?)

    So he will issue more bonds – admittedly at a more realistic rate to subsidise this activity.

    This is the direct opposite of what the EU – the ‘troika’ – is asking (demanding) of Greece. Greece must have smaller government.

    Hungary it seems must have bigger government.

    So will they even get the money with this strategy too? (..will the EU pony up the money? – nice phrase Eva!) They brazenly announce these plans which they must know conflict with EU policy.

    And if the EU reschedules the cohesion funds – simply because (we) they can’t afford it – then Orban will be well and truly in the Brad.

    And of course this is the point where Matolcsy’s pheonix starts to rise from the ashes and Hungary becomes the financial hub between East and West.

    And when Orban has created his million jobs. (30.000 done only 970, 000 to go plus any further job losses.)

    This fairytale will end in tears! Cinderella will NOT be going to the ball.

    Regards

    Charlie

  3. “So, is Orbán getting desperate or is this just another one of his typical games?”

    That’s the one million dollar question…I have the feeling that they are just trying to survive financially until March next year, when the mandate of the current President of the National Bank expires. Then, after putting their own man there as president, they will have access the forex reserves of the National Bank and ease the financing pressures (at least that’s the idea… a very dangerous one, btw).

    So, keeping the investors calm with continuing the talks with the IMF is paramount so that there is no panic and the forint doesn’t start its free-fall again…. I guess Orban is keeping the talks alive with the IMF and is praying for some miracle that they could hold out till next March… very unlikely, since some of the forex debt that is maturing this year needs to be refinanced this year. Orban is definitely getting desperate, but I still can’t see him agreeing to all the stipulations for an IMF loan.

  4. “Orbán one way or the other was expecting big bucks from Azerbaijan,”

    I am not worried about Great Victor.
    Perhaps, he got those big bucks into his private account or into the account of his party.
    With a paraphrase – Hungarian nationalism became “the last refuge of a scoundrel”.

  5. Great piece, Éva, thank you.

    My well-informed contacts insist that Orbán is not ready to make a deal with the IMF, unless there is a global crunch which is then a vis major.

    Some 10 months ago Orbán commissioned a study from OTP to investigate the fate of Governments which made a deal with IMF. The study looked into 17 cases. It apparently revealed that out of the 17 governments worldwide, 16 were kicked out by the electorates at the subsequent general election.

    This can be one of the reasons why Orbán is so reluctant to enter an IMF deal – unless it is absolutely necessary…

  6. The independence of the Hungarian National Bank is guaranteed by EU treaty and so, even if Orbán does appoint a more obedient head when Simor’s term comes to an end, he cannot simply raid its coffers and fund more lunatic schemes on the proceeds.

    He must know this in his more lucid episodes, which is why I agree with Éva that he knows he has no choice except to reach a deal with the EU and IMF

  7. London Calling!

    An Your prognostication about Orban trying to get his hands on the reserves (Forex AND Forint) is very compelling but it has been the elephant in the room during the extended ‘dance’ which has been the whole context of the IMF negotiations. (Excuse the mixed metaphors, please!)

    The IMF (and ECB and EU!) are keeping a keen eye on Orban’s Central Bank ‘footwork’ simply because they need to protect their current ‘investment’ in Hungary. I’m sure, like any loan facilitating organisation, they are keeping an eye on the credit-worthiness of their ‘client’.

    Turkmenbas’s observation is a bit late – Orban is already in hock to the IMF (very interesting contribution though T!).

    Orban is in a scissor trap – The ECB/EU will ensure he leaves the reserves alone through cohesion-fund threats and other means if he doesn’t complete the loan negotiations. If he does proceed with the IMF – then they will enshrine Central Bank protection measures in the loan agreement.

    The EU must have been watching bemused how Orban has been ‘spivving’ around the world – “Lend us a few bob, for a cup of tea mate?”, “Give us a fag, Guv?” – as we have done in the West who have even the slightest interest in Hungary.

    To overdose my response completely with metaphors (including this one) the EU know that Orban is a trapped squirrel in the loft – they just know the problem will go if they just leave it well alone – and concentrate on their other problems.

    If they try and contain the squirrel he will attack.

    Regards

    Charlie

  8. The soft reaction of both the USA and the European Union could let us think that the game is a little wider than the one discussed so far.
    Azerbaijan is a strategic country in a strategic region. If some ‘friendly’ forces were to attack Iran, Azerbaijan could be a good/convenient/well located logistical platform.
    This ‘technical’ assistance has a price.
    So don’t you think we could take into consideration the fact that the ‘naive’ Orban found a good way to play with both the US/EU which is (through/with the support of Israel) about to launch attacks against Iran and the azeri government which is full of money?

  9. London Calling!

    MMJ – I don’t think Orban is a strategic thinker at all.

    Saforov was just loose change rattling around the bottom of the tin. I think it was probably one of Matolcsy’s crazy creative brain-storming sessions that made them realise they could leverage some cash from the oil-rich Azeris.

    But they couldn’t even protect their negotiations properly with safeguards before they released their ‘hostage’.

    In addition Orban is an ‘autistic’ National leader – he is oblivious to the ‘noises off’ occurring around him regarding the concerns others have with Iran.

    He blindly allows the cosying up of factions within his own country who are sympathetic to Iran – much to the embarrassment of the EU.

    No, no strategy. Just lurching from one crazy idea to the next – quickly executed without due consideration – only to find the consequential problems later.

    “The essence of strategy is choosing what not to do.”

    Regards

    Charlie

  10. tappanch :
    “Orbán one way or the other was expecting big bucks from Azerbaijan,”
    I am not worried about Great Victor.
    Perhaps, he got those big bucks into his private account or into the account of his party.
    With a paraphrase – Hungarian nationalism became “the last refuge of a scoundrel”.

    Outside of you and I, no one is willing to hazard this hypothesis,
    yet when one puts together the parts of the puzzle….

    Part 1: Orban creates a special ‘roaming foreign minister’ for Szijjarto

    Part 2: Szijjarto goes hopping around the world and we ought
    not to mention his trips to a special banking capital called Cyprus

    Part 3: Some months back, there are discussions with floating
    a government bond on the Turkish market in manat–the Azeri
    currency

    Part 4: Orban (once) and Szijjarto (several times) visit Azerbadjian

    Part 5: Both the Ministry of Foreign Affairs and the Ministry
    of Finance are totally excluded from talks with Azerbadjian

    Part 6: Orban releases the axe murderer without consultation.

    Part 7: Orban goes to the media to declare that Hungary
    has been lied to.

    Oh, yes, and one last thing. Orban declares that the matter is closed and has been dealt with with as much significance as it
    deserves. As he finishes talking there’s just the slightest hint
    of a smile on his lips–the smile of a man who banked millions.

  11. “…because of the forint’s fall this afternoon Orbán and Varga came out with these optimistic stories about the negotiations in order to calm the nerves of the markets. Nothing will come of the negotiations.”

    This would normally be my reaction as well, but this is the first time I’ve heard Orbán admit that “the ball is now in Hungary’s court”, so maybe it really is a final recognition of reality?

  12. “I have the feeling that they are just trying to survive financially until March next year, when the mandate of the current President of the National Bank expires. Then, after putting their own man there as president, they will have access the forex reserves of the National Bank and ease the financing pressures (at least that’s the idea… a very dangerous one, btw).”

    Knowing OV as we do, this has a frightening ring of probability about it. But, even by OV’s standards this would be a desperate, if not insane, act – it’s effectively eating the seed corn.

    But is OV just a cunning and dangerous politician, or has he crossed his personal Rubicon and now become just a desperate despot who will do anything to hang on to power – never mind the consequences?

    I fear it is the latter.

  13. Paul :
    “I have the feeling that they are just trying to survive financially until March next year, when the mandate of the current President of the National Bank expires. Then, after putting their own man there as president, they will have access the forex reserves of the National Bank and ease the financing pressures (at least that’s the idea… a very dangerous one, btw).”
    Knowing OV as we do, this has a frightening ring of probability about it. But, even by OV’s standards this would be a desperate, if not insane, act – it’s effectively eating the seed corn.
    But is OV just a cunning and dangerous politician, or has he crossed his personal Rubicon and now become just a desperate despot who will do anything to hang on to power – never mind the consequences?
    I fear it is the latter.

    And what if Orban is a Russian mole…

  14. New developments: press reports leaked the “IMF condition list”… which is brutal and politically impossible to commit to. Analysts are highly skeptical that the list is authentic and is coming from the IMF. They argue that the list would result in a 1000 bn HUF adjustment in the budget, while Hungary only needs 300-400 bn adjustment. They think that the “list” was leaked and fabricated by the government, to make the government look better when they finally agree to the much less strict, actual IMF conditions.
    http://www.napi.hu/magyar_gazdasag/bloffol_a_kormany_hamis_a_brutalis_imf-kivansaglista.530319.html

    So, maybe Orban is in fact getting ready to strike a deal with the IMF, but wants to come out looking good…it is a possibility. I’m still skeptical and on the opinion that we won’t see an IMF deal while he is in office, but I maybe wrong. He may get desperate enough to sign, and this alleged “list” could be one indication of that.

  15. My guess is that the alleged IMF list is for the party – Orban feels, that he needs reinforcing.

    After all, there is a limit what even the most seasoned FIDESZ soldiers conscience can take.
    OK, I may exaggerating a little, but still, there must be a few decent people who can see, where the country is heading under Orban’s rule and may think, that time has came to change, before they run out of options totally.

  16. London Calling!

    I’ve tried to post the Portfolio.hu link article in English – without success – not even awaiting moderation!

    The leaked list is there if you need to see it in English.

    Regards

    Charlie

  17. London Calling!

    I’ve tried to post the Portfolio.hu link article in English – without success – not even awaiting moderation!

    The leaked condition list is there if you need to see it in English.

    Regards

    Charlie

  18. The transformation of Hungary is on hold.
    Like in 56, in 89. it was a quick push forward to civilized liberal democracy, but the conservative forces beat it back. The Soviet supported fundamentalists won in 56, and the national old alliance won now.
    Orban is just an actor. A perfect Hindenburg. Without power. The real leader is waiting in the dark, to come out on a white horse. He will get a crown, he will be king for 50 years.
    Teheran and Cairo demonstrated that the Islamists are the power there. They are the professional oppressors.
    Hungary is textbook case of lost liberty, as long as a sordid alliance of the politicians and churches can rule.

  19. The theater is on… Orban announced that Hungary does not want the IMF deal at this “price”. The government is going to come up with an alternative list that they are willing to consider and present that to the IMF….
    http://index.hu/gazdasag/magyar/2012/09/06/ujrakezdene_az_alkudozast_az_imf-fel_orban/

    They are trying to put IMF in a very bad light so that the government can come across as the “successful negotiator”

    As I said earlier, analysts are highly skeptical of the presented “IMF condition list”. They say that what the IMF left behind after the July talks was an assessment of the situation and areas where they suggest something needs to be done, expecting the government to come up with specific suggestions to address the problem areas… so there was no specific list of conditions. And since July, the ball has been in the Hungarian government’s court.

  20. konga honga :
    The transformation of Hungary is on hold.
    Like in 56, in 89. it was a quick push forward to civilized liberal democracy, but the conservative forces beat it back. The Soviet supported fundamentalists won in 56, and the national old alliance won now.
    Orban is just an actor. A perfect Hindenburg. Without power. The real leader is waiting in the dark, to come out on a white horse. He will get a crown, he will be king for 50 years.
    Teheran and Cairo demonstrated that the Islamists are the power there. They are the professional oppressors.
    Hungary is textbook case of lost liberty, as long as a sordid alliance of the politicians and churches can rule.

    I find this a very astute observation. But can we honestly believe, no that is the wrong word, could we actually hope that Hungary was ready for democracy? I have been thinking for a while now that perhaps Hungary could fare a little better under a soft dictator? No? Not like Orban of course, he has no direction, he plays the people against each other, no, someone “on a white horse” with a vision and clear cut perimeters for civilized conduct.

    This near anarchy milieu that is in Hungary at the moment could explode… just like my last conversation with hazafi relative ended listening through an uninterruptible rant against Roma atrocities concluding with an are you finished and you have no idea what goes on here and therefore have no right to comment. I hate to parallel my personal failure to communicate with relatives to an entire country… but would a little oppression with clear cut rules not put a halt to the growing paramilitary convergence against Hungary’s minorities, would it not hold in check this neighbour against neighbour mindset? How could this play with democracy end in Hungary without bloodshed? Hungarians could be in need of a king.

    Maybe the song was spot on “Mast itt a nep meg nem ert csak tulerot. Nem erti a multat es nem sejti az eljovot” – this might not be an exact quote from Istvan the King, or the translation for that matter: The people here understand only overwhelming power. They cannot comprehend the past and see what is to come.

  21. Considering that both the EU and the US economies are in shambles, the Euro/$ ratios are vacillating daily (sometimes more then the HUF/Euro) and an 0.7 % oscillation of the HUF is not an earthshaing event. The EU couldn’t come up with a reliable solution to the PIIGS crises for more than a year, and even the Northern economies growth is faltering. The USA is 16 trillion in debt… and merrily spends more every day. The current regime’s comparative economy does not look as bad as it is painted here. It is certainly not clearly defined, but pray tell me is the EU’s or the ECBs or the IMFs is consistent with the crises they face?

    The facts are not showing improvement on Hungary, and maybe Orban will use the Obama slogan give me four more years to improve the economy the first four was not enough.

    I have read here more guessing on what is going on with the Hungarian economy than facts.

    But I like the sinking boat with the $ on the flag…..

  22. London Calling!

    ZsuZsa – I have always thought that ‘the new saviour’ of Hungary would be someone who we have not yet considered – a sort of candidate from left field.

    But only as circumstances evolve – and time has elapsed – A Long Time.

    Orban has stitched up all the components of power and democracy.

    I don’t think there will be riots – The King will emerge from a ‘velvet’ revolution – eventually.

    But only after a long time

    Regards

    Charlie

  23. I don’t understand. Orban said only yesterday that he expected an IMF deal in the autumn. Now he’s rejecting the IMF? What’s he doing?

  24. Bowen :

    I don’t understand. Orban said only yesterday that he expected an IMF deal in the autumn. Now he’s rejecting the IMF? What’s he doing?

    I simply cannot follow him anymore. Everything he does defies logic.

  25. Eva S. Balogh :

    Bowen :
    I don’t understand. Orban said only yesterday that he expected an IMF deal in the autumn. Now he’s rejecting the IMF? What’s he doing?

    I simply cannot follow him anymore. Everything he does defies logic.

    Well, it is clear. One day he gets out of bed with his right foot, the next one with his left foot. And maybe some days he just jumps out onto his four…

  26. Zsuzsa :

    konga honga :
    The transformation of Hungary is on hold.
    Like in 56, in 89. it was a quick push forward to civilized liberal democracy, but the conservative forces beat it back. The Soviet supported fundamentalists won in 56, and the national old alliance won now.
    Orban is just an actor. A perfect Hindenburg. Without power. The real leader is waiting in the dark, to come out on a white horse. He will get a crown, he will be king for 50 years.
    Teheran and Cairo demonstrated that the Islamists are the power there. They are the professional oppressors.
    Hungary is textbook case of lost liberty, as long as a sordid alliance of the politicians and churches can rule.

    I find this a very astute observation. But can we honestly believe, no that is the wrong word, could we actually hope that Hungary was ready for democracy? I have been thinking for a while now that perhaps Hungary could fare a little better under a soft dictator? No? Not like Orban of course, he has no direction, he plays the people against each other, no, someone “on a white horse” with a vision and clear cut perimeters for civilized conduct.
    This near anarchy milieu that is in Hungary at the moment could explode… just like my last conversation with hazafi relative ended listening through an uninterruptible rant against Roma atrocities concluding with an are you finished and you have no idea what goes on here and therefore have no right to comment. I hate to parallel my personal failure to communicate with relatives to an entire country… but would a little oppression with clear cut rules not put a halt to the growing paramilitary convergence against Hungary’s minorities, would it not hold in check this neighbour against neighbour mindset? How could this play with democracy end in Hungary without bloodshed? Hungarians could be in need of a king.
    Maybe the song was spot on “Mast itt a nep meg nem ert csak tulerot. Nem erti a multat es nem sejti az eljovot” – this might not be an exact quote from Istvan the King, or the translation for that matter: The people here understand only overwhelming power. They cannot comprehend the past and see what is to come.

    Just governance with even the thinnest sliver of competency would be great at the moment… if you read the Portfolio link you see that 5 minutes before Orban pronounced his opinion the regime’s propaganda supremo said there would be no pronouncement until Monday.

  27. “Just governance with even the thinnest sliver of competency would be great at the moment… if you read the Portfolio link you see that 5 minutes before Orban pronounced his opinion the regime’s propaganda supremo said there would be no pronouncement until Monday.”

    So whatever is his game or his shortcoming, the emperor has no clothes… buck naked in fact. We have a history here in British Columbia to elect clowns for premier, but even Amor De Cosmos had more respectability than this Orban fellow.

  28. petofi :

    tappanch :
    “Orbán one way or the other was expecting big bucks from Azerbaijan,”
    I am not worried about Great Victor.
    Perhaps, he got those big bucks into his private account or into the account of his party.
    With a paraphrase – Hungarian nationalism became “the last refuge of a scoundrel”.

    Outside of you and I, no one is willing to hazard this hypothesis,
    yet when one puts together the parts of the puzzle….
    Part 1: Orban creates a special ‘roaming foreign minister’ for Szijjarto
    Part 2: Szijjarto goes hopping around the world and we ought
    not to mention his trips to a special banking capital called Cyprus
    Part 3: Some months back, there are discussions with floating
    a government bond on the Turkish market in manat–the Azeri
    currency
    Part 4: Orban (once) and Szijjarto (several times) visit Azerbadjian
    Part 5: Both the Ministry of Foreign Affairs and the Ministry
    of Finance are totally excluded from talks with Azerbadjian
    Part 6: Orban releases the axe murderer without consultation.
    Part 7: Orban goes to the media to declare that Hungary
    has been lied to.
    Oh, yes, and one last thing. Orban declares that the matter is closed and has been dealt with with as much significance as it
    deserves. As he finishes talking there’s just the slightest hint
    of a smile on his lips–the smile of a man who banked millions.

    Interesting observation – looks like Szijjártó made his entrance into the inner circles.
    As it happened earlier on: the participants of the decision regarding the memorable Gripen-affair still the most trusted ones around Orban, – old habits die hard, obviously.

  29. Turkmenbasi :
    … The study looked into 17 cases. It apparently revealed that out of the 17 governments worldwide, 16 were kicked out by the electorates at the subsequent general election…

    But perhaps OV should still not infer from this that governments in trouble that did not approach the IMF survived… :-).

  30. Zsuzsa: ” I have been thinking for a while now that perhaps Hungary could fare a little better under a soft dictator?”

    An “enlightened dictator” is the dream of many people on the Continent. Unfortunately for them, it is very unlikely that such person would ever appear (and moreover deliver “democratic education” so as to make people fit for rule by the people, ie the opposite of dictatorship and rule by a few). People can learn “democracy” at some point, but it is a process and the current experience of Hungary, however disappointing, will teach a number of people important lessons about the preconditions and viability of democracy. It is that part of the society that will be able to (re)build democracy. In the West, there are also people with prejudices, lack of knowledge about the political process, people who spread hatred and discord. But there is a sufficiently large number of people who keep them in check. (It is then also less widely appreciated if people share their most simple “insights” about who runs the world and who is “responsible” for all evil. But OV has strongly encouraged people to use their simplest “instincts”, and what you hear is the consequence of it. Perhaps five years back you would not have heard it said so openly.)

    What we are currently witnessing in Hungary, I consider to be part of grass-roots democratic education – through both the negative experience with OV but also through the activities of those people who still search alternatives to OV. You may find that they “only talk” or write, but what is also being done by that is “brainstorming” and in the best case at some moment also an agreement between those people who oppose OV.

  31. Kristen you are right of course, the benevolent dictator would have his own axe to grind and who knows what part of Hungarian society would pray the price for that type of governing. But is it not too tall an order to expect from Hungary first to produce a good leader and then collectively choose wisely at the ballot box?

    Kristen, I don’t know where you reside, so this may not mean anything, but I have to go back to B.C. politics. The Socreds made a mess under new Bennett so we threw them out of office and elected the NDP. That didn’t go well so we picked Van der Zalm. He made a mess too and we elected NDP again. That went sour so we have been stuck with the same ultra right wing government ever since. But I am not sure who sold us down the river more, the left or the right? I have a hunch that Glen Clark may have acted more right wing than Gordon Campbell.

    Meanwhile, all the meanwhile the poor, the disabled, the pensioners keep getting the shaft. Our unions are destroyed and many of our public sector has been privatized. Service went down; pay is less for more work, [child protection workers have case loads up to 60] and meanwhile the cost of the lesser service went up. In B.C. you can now employ children for three bucks an hour. They call it the learning wage.

    I am not trying to waylay the topic, only that people keep voting out rather than voting for politicians. One is as bad an apple as the other. So while our illustrious leaders line their pockets, the people keep sinking lower and lower. I predict the next guy in Hungary will be as bad as all of his predecessors.

  32. Zsuzsa, my answer will disappoint you but I cannot report of a wealth of talented policians either. For me it is not yet clear whether our politicians are so disappointing because there are few political talents or because the current tasks are so difficult. My approach is a bit fatalistic (If we are unable to generate better politicians we have to live with what we have and work towards an improvement; sounds better to me than giving up democracy and participation for good.) but on the other hand I would not consider even small improvements futile. Paul here from the blog thought earlier that I am an incurable optimist, but I just think that it is of no use to declare bankruptcy too early. In particular, as a democracy requires some participation of the broad public.

  33. “Some 10 months ago Orbán commissioned a study from OTP to investigate the fate of Governments which made a deal with IMF. The study looked into 17 cases. It apparently revealed that out of the 17 governments worldwide, 16 were kicked out by the electorates at the subsequent general election.”

    A simplistic ‘understanding’ of cause and effect. Is it not more likely that governments that have to call in the IMF get kicked out because they made such a mess of things that they had to call in the IMF?

    A government that cocks-up the economy so badly that they need to call in the IMF isn’t going to get away with it just because the DON’T cal in the IMF.

    Or at least they don’t in countries with a functioning opposition, a fair election system and a free media…

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