The first draft of a “party program” of the Hungarian democratic opposition. Part II

Yesterday when I left off I was talking about the opposition’s concern over the very low Hungarian birthrate, which is resulting in a steadily aging population. At the moment the Orbán government is discussing a scheme by which every woman over the age of 18 who gives birth to her first child would receive a sizable amount of money–the most often heard figure is 300,000 forints–in addition to a flexible scheduling of the subsidies already given to women after childbirth. Most people don’t think that this scheme would make families rush to have children given the current economic situation. As I mentioned, the democratic opposition doesn’t have any better ideas on the subject except that they want to put an end to the current unfair distinction between legally married and unmarried couples who have children. In addition, they promise to put an end to child hunger.

Naturally, they pay a great deal of attention to the welfare of the large population over the age of 65. They promise not only to raise pensions to match the rate of inflation; they also plan to reintroduce a “premium” that would be indexed to economic growth. They make a renewed promise of free public transportation to everyone over the age of 65. They would also again allow pensioners to work while drawing their pensions and would allow people to work beyond the retirement age. Out of these promises the only one I object to is free public transportation for everybody over the age of 65. I think that forcible retirement is untenable in a democratic society and that in certain professions it is outright injurious to the public interest. I am thinking of judges and university professors, for example.

The next topic of the provisional party program is healthcare, and I must say that it is one of the weakest points of the program. Here we have only vague generalities. I understand, however, from a television interview that the hospitals would remain in state hands and that the new government would stick with a single centralized state insurance system. Only yesterday I was listening to an interview with Erzsébet Pusztai (earlier MDF, now a member of Lajos Bokros’s conservative party) who was won over to the idea of privatizing healthcare. What does she mean by that? Basically, that doctors would be the owners of their own practices. Having doctors as state employees guarantees failure, she contends. I tend to agree with her. Therefore I don’t expect any great positive change in the quality of Hungarian healthcare as a result of a change of government. In the first place there is no money to raise salaries and, even if they did, the problem lies not only with low salaries but with attitudes.

The MSZP and Együtt 2014-PM negotiating team / MTI, Photo Lajos Soós

The MSZP and Együtt 2014-PM negotiating teams / MTI, Photo Lajos Soós

Naturally, the democratic opposition wants to put an end to the Kulturkampf introduced by the Orbán government and they make all sorts of promises of state subsidies to make culture readily available. As for the state of the media and the media law, which they surely want to change, they said nothing about MTV, MR, and Duna TV. I’m afraid that these organizations would need a complete change of personnel; otherwise the new government will end up with a far-right state media of low quality.

The Internet wasn’t left off the list either. They promise to pay special attention to making broadband available everywhere in the country and to encourage Internet usage and computer literacy.

These two parties at least don’t want to take away the voting rights of the new Hungarian citizens from Romania, Ukraine, and Serbia. The reason I didn’t include Slovakia here is that Slovakia introduced legislation that forbids dual citizenship and therefore there were very few people who applied for Hungarian citizenship and, if they did, it was in secret. I personally wouldn’t support that right and from what I read on the subject a lot of people would vote along with me on that issue. The document does make special mention of the democratic forces’ opposition “to the use of  the Hungarian minorities in the neighboring countries as instruments of Hungarian political parties,” but as long as voting rights are ensured there is no way of preventing party politics from spilling over the borders. On that issue, I’m with Ferenc Gyurcsány’s Demokratikus Koalíció.

Finally, the democratic opposition pledges its support of European values and Euro-Atlantic cooperation. They realize the changing nature of the European Union, but Hungarian national interests must be protected in cooperation with and not against the European Union. Hungary wants to be a partner in the building of a stronger and better European Union.

* * *

Commentators, on the whole, responded positively to the beneficial effects of the joint declarations and the parties’ willingness to work together. Most of them think that once the first step toward an electoral alliance is taken the number of undecided voters will drop and support for the opposition will increase.

In addition to this document the opposition came out with another one that deals with the nomination of MP candidates. I will spend some time on that document in the future, but until then suffice it to say that this particular document pretty well ensures that there will be a single common party list, which is an absolute prerequisite for any success against Fidesz at the next election.

Breaking News: Sándor Csányi, CEO of OTP, the largest Hungarian bank and the premier holder of Forex mortgages, dumped almost 2 million shares yesterday, allegedly to invest in his other businesses. OTP stock has been under pressure recently as a result of rumors about a new government scheme to help the approximately 100,000 people who are currently incapable of repaying their Forex loans. This generous assistance would come at the expense of the banks. Since details of the plan are unavailable, we don’t know how large a haircut the banks would have to take, but the hit might be substantial. I guess that Csányi, who by the way has been a big supporter of the prime minister, decided to bail while he still had some equity left. In the wake of his mega-sale (and I assume that sooner or later we’ll find out who was on the other side of that block trade–again, rumors are flying), OTP stock lost about 9% today.

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40 comments

  1. I did not have anything to say regarding the “promises” yesterday or today. I honestly believe that many of the ideas cannot be executed, often because the current government embedded itself to the system so hard that it will be impossible to drive through anything before the Fidesz Troopers will put a break on it. My other concern would be that if and when Fidesz leave the distraction behind, there would be such a financial whole that any “surplus” would be required to bring back the country to least at the 2010 levels.
    As far as Fidesz’ head money is concerned, it does not surprises me a least bit. After the forced labour scheme, the pig-raising, here comes the human-breading program. I guess Fidesz next slogan will be “For love or money”. I can also see how it will this backfire, as it is a known fact that the less financially fortunate was always ready to have larger families. Unfortunately the few thousand forints will not be enough to put a roof above their had, or to solve the problem of unemployment that would help to help with a sustainable living.

    And about Csanyi… Isn’t this considered insider trading?

  2. (a) “….but Hungarian national interests must be protected in cooperation with and not against the European Union.”

    A somewhat baffling statement. What exactly are “Hungarian national interests”? In light of the European Union, shouldn’t ‘national interests’ be a thing of the past? The only national interests
    I can think of are cultural ones that may need some protection–ie. language etc.

    (b) The news about Csanyi is interesting for one main reason: even an Orban ‘insider’, it seems, has no forewarning of what the great leader will do….or Csanyi might have taken some time to sell off his holdings.

    So, if Orban’s wealthy buddies don’t know what he’s planning, who does…?

  3. By the way, giving 300,000 forints for babies is one of those lovely, genius-like ideas. I can envision herds of teenage mothers giving birth for the monetary windfall–one a year–and abandoning them soon after payment, too.

  4. Some1 :

    And about Csanyi… Isn’t this considered insider trading?

    I will inquire but I don’t think so. However, I’m pretty much convinced that the sale had to be arranged a head of time .Csányi knew who the buyer will be and I wouldn’t at all be surprised that it was the Hungarian state. As is the Hungarian state has about 13% share in OTP but surely they wouldn’t mind being majority owners.

  5. Dear Eva,
    If Csanyi’s sale of OTP shares had been a prearranged block sale, the price would not have plummeted by 10% – of course I can easily be wrong.

    Looking at the chart, I can see huge sale volumes @ 4300 HUF in the morning, buy orders @4000, and again sales down to 4200 at the end of the day.

    I think Orban plans to give the chairmanship to a [potentially] less independent guy not through the marketplace, but by a new law, since he is not able to achieve this change in the stock exchange.

    The biggest shareholders on March 31, 2013 were:

    1. Rahimkulov family (residents of no other village than Orban’s Felcsut, if I am not mistaken). Megdet Rahimkulov is a former Gasprom executive, an ethnic Tatar from Russia.
    9.0% of voting rights.

    2. MOL 8.7%
    3. Groupama Group (insurance, France) 8.4%
    4. Lazard Group (former Lazard Frères) 5.6%
    5. Hungarian government 5.0%
    Management and employees totaled only 1.7%

    https://www.otpbank.hu/portal/hu/IR_Tulajdonosi_struktura

  6. Eva S. Balogh :

    Some1 :
    And about Csanyi… Isn’t this considered insider trading?

    I will inquire but I don’t think so. However, I’m pretty much convinced that the sale had to be arranged a head of time .Csányi knew who the buyer will be and I wouldn’t at all be surprised that it was the Hungarian state. As is the Hungarian state has about 13% share in OTP but surely they wouldn’t mind being majority owners.

    THat is an interesting point. If the Hungarian government in deed would be the buyer, then it is a possibility that Orban’s advertising of “basically cannot change” the way the government raises revenue, is happening in order to push down the price of OTP.

  7. Some1 :
    I did not have anything to say regarding the “promises” yesterday or today. I honestly believe that many of the ideas cannot be executed, often because the current government embedded itself to the system so hard that it will be impossible to drive through anything before the Fidesz Troopers will put a break on it.

    The so-called Democratic Opposition wouldn’t be able to execute their ideas even if Hungary were breaking even on the economy right now. Much of MSZP-E14’s document smacks of Orbanite populism to me — “If I win the election, there will be no breakfast, no lunch, and no supper… Just ICE CREAM AND CAKE all day long! And we’ll make the rich pay for it!!!”

  8. tappanch :
    Here is an article about the owner of the only savings and loan bank that was not nationalized a few days ago:
    http://nol.hu/belfold/20130716-fold_a_duna_penzen
    He is also the owner of Orban’s favorits soccer club, Videoton,

    In Canada the “savings and loan bank” you are referring to is called Credit Union. It is the equalent of the Hungarian takarekszovetkezet. I am not sure if it is the same designation in other countries. I jut s bring it up in case anyone wonders what you are referring to.

    Garancsi’s Duna Credit Union also is the credit union who provided the financing to Orban’s Felcsut Stadium that started out with an approximate 1000 Euro soccer foundation.

    Videoton, Garancsi’s soccer club is also the one who signed Orban’s son, Gaspar as a professional player in 2011.

    I am sure there is no conflict of interest in any of it…..

  9. Much of MSZP-E14′s document smacks of Orbanite populism to me

    Yes, given the jaded Hungarian electorate, the opposition is in a Catch-22: how to wrest their votes from Orban without having to become Orban to do so?

    Realistically, I don’t think there’s much chance they’ll become Orban, especially not Bajnai. So let them say whatever it takes: their illusions are infinitely preferable to Orban’s reality.

  10. Csanyi – the country is disintegrating, but the Csanyis are arranging the deck chairs before hitting the iceberg.
    Bajnai has been courting the stupid ones, but has to think of offering some plans to the intelligent and decent ones.
    I am waiting for a redressed LMP clone party, to win the election by capturing the imagination of many, or to assist Orban to hang on to the power.
    Painful to witness the collapse of a nation.
    Hungary advanced in the past 23-24 years, but remained a fragile entity.
    I hope it will not turn into a violent strife like the old Yugoslavia.

  11. Some1 :
    And about Csanyi… Isn’t this considered insider trading?

    This is *well* above the threshold to trigger an SEC investigation. Dido for the UK, Germany, France as well as anywhere else with a normal regulatory environment. Martha Steward did time and her case was far less obvious. I cannot see how this would not be in

  12. Just one of Simicska & Nyerges’s company, “Mezort” owns now 840 km^2 of agricultural land, almost twice as much area as the territory of greater Budapest. It is expected that they will be given further huge plots of state-owned agricultural land by the Orban government.

  13. Hungary is turning into a small-scale copy of Putin’s Russia – once we would have called it a “Banana Republic” …

    To have to watch this in the middle of Europe – it’s unbelievably sad!

    PS:

    Our Social Cemocrat ex chancellor Schröder once called Putin “einen lupenreinen Demokraten” – now that was a kind of really bad joke. But of course Schröder was a consultant to a Russian company – so it seems to be true: Everybody can be bought at the right price …

    I wonder if and how many people of the opposition will be bought off by Orbán’s goons …

  14. @Some1 : I don’t see at all why national interests should be a thing of the past. German Länder (in a federal State) have ‘Interessen der Bundesländer’, French Régions (in a decentralised State) have ‘intérêts régionaux’, and so on.

    @Seal Driver, Some1, Stevan Harnad: ice cream and cake indeed.

    Reminds me of France’s electoral campaign last year. But hey, Mr. Sarkozy was eventually ousted – and my guess is his successor, however unpopular to an unprecedented level, has begun to do the dirty job the right-wing didn’t do for ten years, while they were too busy with ‘national identity’ and scapegoating of various sorts…

  15. Left the government Fold: Csányi (OTP owner) and Demján (Granit Holding) are two of the most active Magyar business paricipants of the govenments economic system.

    Both have loudly cried FOUL regarding Orban Banking practices.

    Demján by via written harsh protest to Orbán against the forcible nationalization for of the Takaerészövetkezet banking association,

    Csányi got out of his major Hung. bank’s ownership poistion because Orban’s unanticipated and 10 year prolongation of the special high tax levvies on banks originally promised to last only two years.

    At an incredible speed Orbán is taking over direction of the entire economic lifeline.

    This will definitely scare off not only pot. investors but current foreign factory and company owners and will force them to move to neighboring countries !!!! Particularly as upcoming talent is moving to work in the West…

    Csányi and Demján, Hungarians are SHOWING the others the LOGICAL WAY top stopping a hemorrage – by Getting out fast…. first avoidiong nationalization of the banks and later to avoid nationalization and control of private comapnies.

    I can see the train coming at an alarming speed…

  16. Some1 :
    … And about Csanyi… Isn’t this considered insider trading?

    In case this question hasnt been clarified yet, Insider trading occurs via investment companies where brokers get advanced wind of major changes about to occur at various client companies that would affect the price of the shares.
    If these brokerage employees use this advance and privileged (‘secret’) information to notify other clients or use this information to their own advantage and trade on the basisi of this advanced (client-broker) privileged information that would be considered ‘insider trading’.

    however selling by the owner of shares of largte amounts of his/her stock is obviously at their own discretion. Other employeees of the company in question who are part of the process of decisionmaking on the named sale of stock could also join the sale, I believe, without prejudice because the knowledge is within the initital compnay itself. However if the mployee averts other brokers or stock-owners of the impening sale, I believe would constitute fraudulent behavior.

  17. To all who considered the “insider trading” question. According to the description of FT, it seems to me that Csanyi did in fact committed insider trading:
    “any confidential price-sensitive knowledge and data that can provide an unfair advantage when buying and selling shares of a publicly traded company.
    The definition of an insider depends on the country where the case arises. In the US insiders include any company employee, trader, or non-employees of the company who might be deemed to be in possession of insider information.
    In contrast, in other countries such as the UK, insiders refer to only the people who work inside the company, board members, i.e., executive and non-executive directors, former directors”
    http://lexicon.ft.com/Term?term=insider-trading

  18. The potential of insider trading in this instance.is particularly a fascinating topic.

    Particularly by a close crony or Orban who has knowledge of the most intimate thoughts of the “ruler” (Orbán) and acts in his own best interest having knowledge of what is coming…

    For the sake of some clarity, some of the facts of the Csanyi trading that occurred yesterday is described succinctly in: :
    http://index.hu/gazdasag/2013/07/19/otp_csanyi_szinte_mindent_eladott_9_-os_minuszban_a_reszveny/

    On a grander scale than Csanyis personal fortunes is the serious indications posed by the propsed actions of ‘Admiral’ Orbán. The seriousness and breadth of the propsed changes are underlined by the drastic nature of Csanyi’s “life-saving” action. When he built a full banking empire – the largest in Hungary including the foreign banks hungarian activities – and gets rid of it in a lighting instance – it forebodes a storm of changes that are potentially epochal..proportions.

    We are definitely at the EDGE of an ABYSS, Orbán’s directional changes are extremely aggressive and calculated with apparently Machiavellian finesse and agressiveness and planning.

    This novel is getting more exciting by the day.

  19. D-2013 :
    Hungary advanced in the past 23-24 years, but remained a fragile entity.
    I hope it will not turn into a violent strife like the old Yugoslavia.

    Impossible. First, the ratio of eggheads to football hooligans is much higher in Hungary than in the former Yugoslavia. Fidesz and Jobbik have gathered up virtually all the football hooligans, and the eggheads are not going to put up much of a fight. The only way Yugoslavia will replay itself in Hungary is if the football hooligans get divided and go to war among themselves.

    Second, there is no source of weaponry except the Hungarian Army and the police force (including TEK), all of which are entirely controlled by Fidesz. Arms could conceivably arrive through Ukraine, but that is hugely unlikely. And the Hungarian military is not going to attack the opposition unless the opposition deliberately picks a fight — and without weapons, the opposition is toothless.

    I do see the possibility of localized rioting in Hungary, accompanied by atrocities committed by both the police and TEK, plus face-slapping by garden-variety Orban supporters. But nothing on the scale of Yugoslavia.

  20. Csanyi also made some comments about the selling of his stocks as he wants to put more money into agricultural ventures.
    As we know so far the EU puts billions of Euros into grants and low interest loans to support the various agricultural sectors. THe Hungarian government also committed to finance and support agricultural start-ups, etc. In reality at this point if you are in the know, and depending on who you know you can literally make money with no investment and no risk or with as little as 10% input. (THere are also lots of investors who got their hands on the land leases with no previous farming experience.)
    Here are some links to various grants and loans provided by the EU and Hungary:
    http://www.szilberhorn.com/vissza-nem-teritendo-tamogatasok.html
    http://www.agroinform.com/tags/támogatás
    http://www.palyaz.hu/palyazat-archivum/2013/mezogazdasagi-palyazatok-2013/
    http://www.palyazatihirek.eu/mezogazdasagi-palyazatok
    SO, why on earth would Csanyi leave his money in the high-risk, overtaxed banks, when he can tenfold his investment without lifting a finger in a territory that is the second closest (after sport) to the heart of one of his best friends, who happens to be the Prime Minister.

  21. There is no comment at all today in Hungarian press about the OTP share sell off. Not even on Klub radio. There is complete silence. Government gagging order?

  22. Well, at least RTL (which we wouldn’t watch normally …) had on the news a report about the hooligans who attacked those people after the “gay parade”.

    I must confess that I felt the news to be quite good, objective and generally impartial – while on Kiraly TV (M1 etc) you see nothing but Orbán …

  23. Good news! Hungary’s struggle with its learning system and with on how to rebound the country’s economy is finally over. Gabriella Selmeczi the spokeswoman of the Hungarian government told today “from September, pupils in 200 primary schools will get the chance to learn to ride horse in the framework of the government’s Kincsem National Equestrian Programme”
    The government also wants to make riding therapy a part of the national health insurance system, she added.

    Selmezci said amendments to legislation allowing equestrian programmes in forests will create a network of riding trails that extends for 1,140 kilometres.”
    http://www.caboodle.hu/nc/news/news_archive/single_page/article/11/govt_aims_t-1/?cHash=5c9c2f4cdf

    Can anyone look into who is the Orban friend who has many horses? Maybe Csanyi is buying up some forests and some horse stables as I am typing away?

  24. Some1: Can anyone look into who is the Orban friend who has many horses? Maybe Csanyi is buying up some forests and some horse stables as I am typing away?

    Csanyi needs the money for expansion and upgrading the Bonafarm Group
    http://www.bonafarmcsoport.hu/en/bonafarm-csoport/bonafarm-zrt/

    The last few years a number of slaughter houses went bankrupt (notably: Kapuvar), which were classified as strategic importance to Hungary. In other words the bankruptcy went very quick and Csany took up the good parts, such as machinery and brands like Delhus. His son is currently in charge of the Group.

    As to people who have horses, look at the guys from CBA, the Lazar brothers and probably some friends of Lazar Janos of Hodmezovasarhely.

  25. wolfi :
    Just found the report on the OTP sale here (there’s more in Hungarian all over the web – but that’s too difficult for me …):
    http://www.portfolio.hu/en/equity/hungary_otp_chief_sells_eur_26_m_otp_package_share_price_plumments_reason_revealed.26371.html

    The report is from yesterday. What odds on there being govt gagging order today
    enforced by the media council “in the interests of national security”, in order to prevent countrywide understanding of what has gone on during friday and to further prevent a run on the banks on Monday with people withdrawing money from accounts across the country.

    Am I the only one thinking this?

  26. As to the agriculture market. As you may know US Food processor Smithsfields was acquired by the Chinese. Smithsfield was interested in Pick, but in the end no deal on investment could be made regarding Pick in 2004 and Csanyi took over.

    Smithsfields went then to Romania buying their largest slaughterhouses and deep freeze capacity and invested major amounts in new stables, husbandry and fattening for pigs. In 2012 slaughtered pig imports from Brazil and the USA went down significantly and price also, due to overcapacity in the EU market and the boycott by the Russians.

  27. OT. I skimmed the last issue of “Nök Lapja” in the hair dressers shop and found the backside covered with a splendidly designed ad marked Kormany Informacio with the Hungarian emblem topped by the Holy Crown between the two words. It said “We succeded. Hungary won”. And a lot more in the same vein. The victory referred to was the outcome of the “battle” with the EU about the excess deficit procedure.

    King Pyrrhus said after the battle of Asculum:
    “If we are victorious in one more battle with the Romans, we shall be utterly ruined”.

  28. Hoping :
    There is no comment at all today in Hungarian press about the OTP share sell off. Not even on Klub radio. There is complete silence. Government gagging order?

    I think it has more to do with the fact that it’s a Saturday in the middle of the silly season. All of Hungary’s fine journalists are on vacation or calling in sick.

  29. Jean P :
    OT. I skimmed the last issue of “Nök Lapja” in the hair dressers shop and found the backside covered with a splendidly designed ad marked Kormany Informacio with the Hungarian emblem topped by the Holy Crown between the two words. It said “We succeded. Hungary won”. And a lot more in the same vein. The victory referred to was the outcome of the “battle” with the EU about the excess deficit procedure.
    King Pyrrhus said after the battle of Asculum:
    “If we are victorious in one more battle with the Romans, we shall be utterly ruined”.

    Apparently, the government is not paying its debts (increased 4X since 2010) ruining many companies.http://www.politics.hu/20130720/legislation-planned-to-prevent-state-institutions-arrears/

  30. Hoping: it was not a coincidence to sell on Thursday so that the news would come the next day (Friday). So the Monday print media will not deal with it as it is not a news any more and nobody reads on the weekend. Electronic media is not concerned with economics, and even less with OTP which has good connections with all media (especially state owne/controlled media, they being one of the biggest advertizers). This is a non-item outside of HVG (444.hu was strong on it, but they don’t have good business writers and anway don’t dare to get tough with Csányi or Spéder, ie publicize real stuff).

    (Index is owned by Spéder and any news on the Takarékbank-steal by Spéder or the possible transactions by Csányi, even if the two are not the best of friends, are off the table.)

    Anyway editors don’t dare to deal with it or they dont get its importance of it.

  31. Seal Driver :

    Hoping :
    There is no comment at all today in Hungarian press about the OTP share sell off. Not even on Klub radio. There is complete silence. Government gagging order?

    I think it has more to do with the fact that it’s a Saturday in the middle of the silly season. All of Hungary’s fine journalists are on vacation or calling in sick.

    It is already “old” news, unless it has some impact on the share price of OTP on Monday. Btw google OTP Csanyi news and you have lots of it yesterday.

  32. Lots of news yesterday… exactly… yesterday. Share price of hungary’s main lending bank drops 14%… Owner and other members of the board sell half of their shares. They would have sold more but the stock exchange was at full capacity. An announcement expected from the govt on Weds re forced conversion of CHF loans to HUF.

    This isn’t about policy, it’s about cash and personal wealth. Anyone who has money now in OTP, has even a minor understanding of what is happening will be going to the cash point this weekend and Monday morning and withdrawing everything they have.

  33. Hoping: This isn’t about policy, it’s about cash and personal wealth. Anyone who has money now in OTP, has even a minor understanding of what is happening will be going to the cash point this weekend and Monday morning and withdrawing everything they have.

    I agree with you, but it will not happen. People are on vacation or in Balaton, on Monday everything is forgotten. There will be no bank run.

  34. Therin exactly the prob in Hungary. No interest from public in understanding or following the situation… No balls from opposition to exploit situations served to them on a plate.

  35. As to any run on the OTP to save ones ‘savings’… If you can call them that here… I have the GREAT news that average amounts are GURANTEED (guess by whom: The Government…) You wouldnt belittle a rock solid guarantee like that, would you now…. 🙂

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