Not only democracy but the free market economy is in danger in Hungary

We have often talked about the hundreds and hundreds of new laws and amendments Fidesz politicians “propose.” Naturally, very few of these laws and amendments are genuine in the sense of actually originating with the MPs who turn them in. Individual members’ proposals are just a convenient way of avoiding thorough preparation and discussion. The preparation of these laws and amendments is often farmed out to Fidesz-friendly law firms whose members with great speed throw together something that often turns out to be very poor legislative work.

The purpose of amendments is frequently obscure. It can happen that something that didn’t seem at all significant at the time it was adopted turns out to be of huge importance. It has happened more than once that the “evil” intent of the piece of legislation became clear only months later.

On October 11 László Koszorús, a Fidesz MP, turned in an amendment to the Competition Act of 1996 which entrusted the Hungarian Competition Authority (Gazdasági Versenyhivatal) with surveillance control of all mergers and acquisitions that might be “essential” from the point of view of the national economy. The Authority can scotch a merger or acquisition if it significantly reduces competition. Article 24 of the Competition Act defines the thresholds above which the authorization of a merger has to be approved by the Competition Authority. László Koszorús’s amendment to this article adds a new section which would allow the government to approve a merger without its being scrutinized by the Competition Authority “in case that merger is considered to be significant from the point of view of national strategy, especially in the case of mergers that would save jobs, would strengthen international competitiveness, and would secure basic supplies to the population.”

Hungarian journalists miss a lot of new amendments, which is not surprising given the tsunami of legislative work, but this one was not overlooked. Index immediately picked it up and explained to its readers what the amendment means. Even if a merger of two companies would contravene competitiveness, would negatively influence the price of products, would be harmful to the consumers, the government despite all that could allow the merger to go ahead. With this amendment the government would seriously limit the jurisdiction of the Competition Authority which is, after all, the guardian of competition and which serves the interests of the consumers. Index learned that this latest move of the Orbán government came as a surprise to the Competition Authority itself. But there is nothing unusual in that. This is how things go in today’s Hungary.

Hungarian Competition Authority / Photo István Fazekas, HVG

Hungarian Competition Authority / Photo István Fazekas, HVG

Speculation followed the announcement. What can possibly be afoot? Surely, as is usual in Orbán’s Hungary, the amendment serves a specific purpose. What large merger is in the offing which the Orbán government wants but which the Competition Authority would most likely veto? One thing is sure, concluded Index, Koszorús’s explanation of saving jobs is not the true reason; it has to be something else.

Today HVG picked the topic up and offered several possible reasons for the amendment and for the curtailment of the Authority’s competence. One is the potential nationalization and merger of the utility companies. The paper also pointed out that the merger for which the amendment was most likely designed must involve companies that belong to national competence, i.e. they are not so big that one would need the permission of the European Commission to go ahead with a merger. HVG learned from a Fidesz official in charge of economic matters that the government is currently working on the creation of “non-profit” utility companies. In the case of nationalization the government would have to determine the optimal size of these companies so they could be run on a non-profit basis with the least amount of loss.

Others speculated that this amended law would also be useful if the newly nationalized credit unions were to be sold to a single person or company. Some suggested the merger of Ringier, the Swiss media firm, and Axel Springer, the German newspaper giant. But others think that this is unlikely to be the case. When HVG turned to László Koszorús for an explanation, he sent them to the press department of Fidesz. A rather odd answer from someone who turned in the amendment as a private member proposal. So at the moment this is where we are.

Viktor Orbán’s interview in The Daily Telegraph coupled with recent domestic developments which have turned Hungary into a “laboratory” for an authoritarian nation state and state capitalism have aroused considerable interest in opposition papers.

This is the theme of Róbert Friss’s opinion piece in yesterday’s Népszabadság. He calls attention to the so-called “strategic agreements” certain companies are invited to sign with the government. These companies, foreign and domestic, really have no choice. Those who don’t get into this charmed circle don’t stand a chance of thriving financially in Orbán’s Hungary. Instead of true competitiveness an “informal struggle is developing for loyalty.” Some multinational firms, utility companies, and banks are in trouble because of their refusal to cooperate. These companies are threatened: either comply or receive more “punishment.” For example, for the time being the Bankers’ Association is resisting the pressure to “help the debtors in foreign currencies,” but Mihály Varga, minister of economics, already promised a further government squeeze in November if the CEOs of the banks don’t play ball. With his “strategic agreement” program Orbán is weaving  “a corporative net.”

Removing the threat posed by Viktor Orbán to democracy and the free market will be difficult. As the Baja by-election proved, Fidesz will make sure that one way or the other they will win the next national election. If necessary by fraud. Or, if not outright fraud, by legal maneuvering. In the next by-election in Békéscsaba on November 10 there might not be an opposition candidate at all because the local electoral commission found that the opposition’s candidate, Katalin Kovács, was ineligible because of a technical mistake committed by the Párbeszéd Magyarországért (PM), one of the parties supporting her.

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15 comments

  1. Orban’s appointees has occupied the state in the last three years, from landowners down to school principals and theater directors. Now he wants to appoint the remaining capitalists too.

    ————–

    Advertisement for a public job in Orbanistan. Your employer, the mayor of Érpatak has 191 questions for you, the applicant.

    He wants to know, among others whether you like or not:

    Budahazy [right-wing terrorist],
    Horthy,
    Peter Daniel [who does not like Horthy],
    Robert Alföldi [the fired theater director],
    “gay pride”,
    the new Fidesz law on agricultural land,

    who you think is the most respected politician in Hungary,
    which is my [mayor’s] favorite book [Mein Kampf?]

    An equal opportunity employer… 🙂

    http://onkormanyzat.mti.hu/dokumentum/85049

  2. The mayor calls the outgoing ombudsman, who criticized the him for giving out the “social” firewood not for the needy a “representative of the liberal legal protectionism serving the destruction of the nation”

    http://www.erpatakimodell.hu/

  3. The foreign companies with which the government signed a legally non-binding (and thus meaningless) memorandum of understanding do not care. They are here, and they just want to produce the widget and want to export quietly.

    All of these major multinational had or still have production sites in South Africa or China or Indonesia back in the eighties during gross human rights abuses to name a few examples. They don’t care, they just want to take advantage of the cheap labor, the good geography, perhaps relatively lower taxes. That is their mission and they know how to behave. They don’t want to meddle into “dirty politics”, only the American companies do that, the Europeans are too good for that. Who ever heard of lobbying?

    The utility firms and banks are different for Orbán, but it seems the foreign firms invite nationalization and tormenting as they have been as quiet as a possible. So tell me why Orbán should not torture them? It’s Pareto efficient, making the Government better off without making anybody worse off. I mean no utility company in Hungary has ever said they have a problem here, sorry, they never did, the banks did, but not too often. So if these companies (RWE, Eni, EDF etc.) are letting it, why not? That it is bad in the long term? Yeah, right, as if politicians are known to think in the long term, when they just want to survive the next crises and somehow make it to the next by-elections.

  4. One can measure the distance between a decent Catholic society and the Hungarian one:

    In Italy:

    “Police in riot gear go after protesters after scuffles broke out outside the Society of St. Pius X, a schismatic Catholic group, where funeral of Nazi war criminal Erich Priebke was scheduled to take place, in Albano Laziale, on the outskirts of Rome, Tuesday, Oct. 15, 2013. The bitterly protested funeral of Nazi war criminal Erich Priebke was called off hours after it was to have taken place Tuesday by his lawyer who said police prevented friends and family members from attending amid a noisy protest against the planned religious ceremony.

    * * * * * * * * * * * * *

    So, would the heroic Hungarian citizenry have so objected?

    What would the Hungarian police have done?

  5. I have heard many rumours of people getting their companies stolen or expropriated by friends of the powers that be. Is there any authoritative study of this? I assume not, but until there is, it is just passed off as sour grapes.

  6. MOLO :
    I have heard many rumours of people getting their companies stolen or expropriated by friends of the powers that be. Is there any authoritative study of this? I assume not, but until there is, it is just passed off as sour grapes.

    It seems that many true Hungarians are prepared to rob their non-true neighbours. The true Hungarians know that they are legally immune and trust that they will remain so for ever (which I doubt).

    I know a case where a minor Fidesz character has stolen a piece of his neighbours garden just by building an extension to his own house on it in the neighbours absence. The non-true neighbour turned to the court in vain.

  7. The Mussolini citation is still true though:

    „I trattati di pace non sono eterni.”

    Peace treaties are never eternal.

    ————–

    Mr Ur… meant that the 1920 Trianon peace treaty would be null and void.

    Does this mean that Mr Or… now repudiates the 1947 peace treaty?

    Will he wage a war against Romania for Transylvania? 🙂

  8. tappanch :
    Robert Alföldi [the fired theater director]

    He was not fired, his contract simply expired and was not renewed.
    The real question is: did you happen to not know this, thus you were mistaken?
    Or, you did know this, but you lied?
    Which one is true?

  9. Regarding the “technical mistake” in the Békéscsaba election: the PM simply failed to comply with the electoral law.
    Do you call it a fraud by Orbán?
    Karácsony Gergely, the PM fronthorse, also admitted they DID fail to comply with the law and the electoral committee had no other choice than to reject their appliance. Had they accepted it, they would have violated the law. And this passage has been in force in the electoral law since 1997 (! – Horn’s government).
    So, what now? How is this Orbán’s fault?

    Oh, don’t bother calling me a troll for these questions. This is perfectly valid and genuine reasoning. By calling me a troll instead of answering, you just unveil your inability of answering.

  10. Johnny Boy :
    Regarding the “technical mistake” in the Békéscsaba election: the PM simply failed to comply with the electoral law.
    Do you call it a fraud by Orbán?
    Karácsony Gergely, the PM fronthorse, also admitted they DID fail to comply with the law and the electoral committee had no other choice than to reject their appliance. Had they accepted it, they would have violated the law. And this passage has been in force in the electoral law since 1997 (! – Horn’s government).
    So, what now? How is this Orbán’s fault?
    Oh, don’t bother calling me a troll for these questions. This is perfectly valid and genuine reasoning. By calling me a troll instead of answering, you just unveil your inability of answering.

    Please let me know exactly what failure to comply with the electoral law you are talking about. Is it a small mistake in filling out forms or is it something deliberate that would give PM an unfair advantage? If you can explain it to me in truthful detail I may move you down from 10 to 9 on the troll scale.

  11. I don’t care for your idiotic rating. Look it up yourself. Check for valid jurisdical warrant. Look up what Karácsony himself said. I won’t do your work.

  12. tappanch :
    The original name of the village until 1908 was “Hugyalj”.

    And now we’re all know, why…
    Apparently this guy working pretty hard for that old glory again, I’d say, he deserve it!
    After all, he likes to keep the traditions alive, rather indiscriminately, mind you.

Comments are closed.