European Union

The Putin visit a day after

Yesterday, shortly after the Putin-Orbán press conference ended, I summarized the events of the day and gave a brief account of what the two politicians had to say about their meeting. My immediate impression was that the winner of this encounter was Vladimir Putin. He received an invitation to a member state of the European Union where he has been a pariah ever since June 2014 and was treated well.

After forming his government in 2010, Viktor Orbán made no secret of his desire to have not only good economic relations with Russia but also close political ties. No country in the western alliance ever objected to trade relations with Russia, but Orbán’s political friendship with Russia has been watched with growing suspicion, especially after the events in Ukraine. During the last year or so Viktor Orbán has been busy trying to appease the European Union while hoping to get added benefits from Russia.

To his domestic critics Orbán’s performance yesterday was embarrassingly subservient. Attila Ara-Kovács, the foreign policy adviser to the Demokratikus Koalíció, described Putin as “a landlord” who came to look around his estate while Orbán the bailiff stood by, awaiting the master’s orders.

Putin’s visit to the cemetery has been drawing very strong criticism. Hungary seems to be in such a subordinate position to Russia that the government is unable to make the Russians change the objectionable word “counterrevolution.”  What happened yesterday was the humiliation of the nation, critics say. Barring the Hungarian media from the cemetery was also troubling.  Did the Russians insist on this? And if so, how could the Hungarian prime minister agree to such an arrangement?

The most substantive criticism of Orbán’s performance yesterday was his complete silence on Russian aggression against Ukraine. Two days after he visited Kiev he stood motionless next to Putin, who was “just rewriting the Minsk Agreement,” as István Szent-Iványi, former ambassador to Slovenia, aptly put it on ATV this morning.  Orbán’s message to the world was clear: “Hungary needs Russia.” That’s all he cares about.

Throughout the press conference he steadfastly supported the Russian position. Today’s editorial in Népszabadság on the Orbán-Putin encounter was titled “Shame.” What did the editorial board of the paper find shameful? The list is quite long. The “strong man of Europe” and “the living statue of bravery” listened while Putin accused the Ukrainians of starting the war and while he called the separatists “aided by Russian regulars armed to the teeth” simple miners and tractor drivers. Orbán didn’t move a muscle when Putin called on the Ukrainian soldiers encircled by Russian and separatist forces in Debaltseve to surrender. He didn’t mention the inviolability of territorial integrity and the sovereignty of a neighboring country. He said nothing about the concerns of the European Union or about the victims of the fighting. In brief, he behaved shamefully. Orbán chose Russia. The die is cast, says Népszabadság. 

What did Viktor Orbán get in exchange? Not much. Gas, which he would have gotten without all this humiliation from Russia, and scorn from the West. Since yesterday we learned that Hungary is paying $260 for 1,000m³, which is apparently higher than the open market price. At least he avoided signing a long-term contract which, given recent price volatility, would have been a particularly bad deal.

Unfortunately, we know almost nothing about what the two men discussed for two solid hours. It couldn’t have been the continued supply of Russian gas to Hungary because that was a done deal before yesterday’s meeting. Viktor Orbán himself admitted today when he talked to a group of journalists that what the deal needed was only the final nod from “the Indian chief.” It also looks as if negotiations about a new pipeline from Turkey to Hungary through Macedonia and Serbia are already underway. Orbán and Putin were completely alone without any of their aides. What did these two men talk about for that long?

Smiles all around

Smiles all around

Fellow politicians are suspicious. Especially since the Hungarian prime minister cannot be relied upon for an accurate account. Here is a case in point. Grzegorz Schetyna, the Polish foreign minister, gave an interview to a Polish radio station yesterday from which we learned that the week before Orbán went on and on about the absolute necessity of meeting Putin in person because of the extremely unfavorable terms of the present gas agreement. Well, today we know that not a word of Orbán’s lament to Schetyna was true. The meeting had nothing to do with a new gas contract.

Finally, another first can be recorded in the history of the Orbán administration. A few days ago Viktor Orbán called together the leaders of the five parliamentary delegations: Fidesz, Christian Democratic People’s Party, MSZP, Jobbik, and LMP. The meeting, of course, didn’t signify any change in the government’s attitude to the opposition, but it looked good. Today’s big news was that Viktor Orbán invited about 15 journalists who cover foreign affairs for a “background talk.” Gábor Horváth, who is the foreign editor of Népszabadság, had the distinct impression that such gatherings had been held earlier but without journalists from opposition papers.  Orbán talked for an hour and was ready to answer questions for another forty-five minutes. The prime minister called Russia “one of the most difficult partners” and claimed that “we would be worse off if we did not work with them.”

I for one wouldn’t take Orbán’s words about his difficult relations with Russia seriously. He seemed to be relaxed and happy on the same stage as Vladimir Putin. He looked as if he were basking in the limelight that he shared with the great man. Here was the president of a strong, important nation who didn’t pester him with checks and balances and democratic values.  Two weeks earlier he looked decidedly unhappy and annoyed when the chancellor of Germany somewhat undiplomatically announced that as far as she knows there is no such thing as illiberal democracy. Most likely he was humiliated and it showed. After he waved goodbye to Putin in front of the parliament building, Orbán and his close entourage looked extremely satisfied with their performance. It was a good day for Viktor Orbán. It started well and it ended well, as far as Viktor Orbán was concerned. Putin also seemed to be satisfied. Whether it was a good day for Hungary is another matter.

Vladimir Putin in Budapest

Four times today the Hungarian government had to revise the appointed hour of the Orbán-Putin press conference. At last the great event took place close to 8 p.m. Putin arrived late in the first place. Instead of 2 p.m. he landed at 3:20. Just to give you an idea of the scale of this visit, the Russians came with eight planes and carried along 30 some cars to protect Vladimir Putin’s armored limousine. Putin’s convoy moved to Heroes Square and from there to the Russian military cemetery.

Let’s pause here a bit because this cemetery became the object of great interest. Buried in most of the thousands of graves on this site are soldiers who died during the siege of Budapest during the winter of 1944-45. In addition, there are graves that belong to soldiers who died during the revolution in October 1956. In the cemetery there are monuments to their heroism during “the counterrevolution.” Most likely not too many people noticed these forgotten relics, which survived the regime change. But now, especially since belittling the greatness of the 1956 revolution is a punishable offense, most anti-government commentators are appalled. How is it possible that the Hungarian government didn’t manage to impress on the Russians that calling 1956 a counterrevolution is a sensitive issue in Hungary and that the inscriptions should be changed to something more neutral? After all, Boris Yeltsin apologized for 1956 and one would think that the new “democratic” regime in Russia no longer considers the Soviet intervention in 1956 justifiable. It turned out that Csaba Hende, minister of defense, suggested a change but to no avail. Knowing Vladimir Putin’s attachment to the Soviet past, I’m certain that he in fact considers the uprising in Hungary a counterrevolution. So, it’s no wonder that some of the speakers at yesterday’s demonstration denounced Viktor Orbán’s friendship with Putin as a desecration of Hungary’s proudest moment in the last century. Especially since Viktor Orbán claims pride of place in the events that led to a democratic regime thirty some years later.

As for the topics discussed by the two leaders, the public learned very little. On the Hungarian side almost no information was revealed. The little we learned was from Russian sources. According to one source, sputniknews.com, Yuri Ushakov, presidential aide to Putin, informed the paper that the 1998 gas contract that expires this year will certainly will be discussed. He also indicated that Putin would discuss an alternative to the Southern Stream. Otherwise, fairly mundane topics were on the agenda. Opposition circles guffawed over the news that Hungary will open a third consulate in Kazan, capital of the Republic of Tatarstan.

Putin and Orban Budapest2

Source: Reuters / Photo László Balogh

Five agreements were signed: on regional economic cooperation, on bilateral cooperation on healthcare issues and higher education, on the opening of the consulate in Kazan, and on the exchange of technical know-how on atomic energy issues. This last one is a first step toward building the second reactor in Paks. On the surface these are pretty meager achievements given the fanfare that preceded the visit.

After the press conference Hungarian talking heads announced that Viktor Orbán hadn’t achieved anything. Putin came empty-handed and didn’t seem to appreciate Orbán’s efforts on his behalf in the face of opposition by the European Union and the United States.

As I mentioned earlier, the press conference was held an hour later than originally planned. Between Putin’s arrival and the press conference more than four hours elapsed. That left plenty of time for a lengthy discussion between the two men. In my estimation Orbán had a much longer discussion with Putin than he did with Angela Merkel. If I had to judge, just on the basis of Orbán’s countenance, I would say that the Hungarian prime minister’s conversation with Putin went a great deal better than his conversation with Merkel did. At least from his point of view. Orbán certainly made sure that he would in no way show himself at odds with the Russian position. He talked about Ukraine as little as possible, and then simply repeated his desire for peace. At what price? He did not touch on any of that.

He was unctuous when he thanked Putin for the visit and stressed that his decision to come was “a great honor for us.” Hungary needs Russia because of energy. Cooperation and good relations are important not only for the two countries but also between Russia and the European Union. He emphasized the importance of “Eurasian cooperation” and expressed his delight that French leaders share his thoughts on the subject. He did not refer to Paks but said that a “political agreement was reached” on the use of the gas that Hungary had contracted for but had still not used. Hungary will be able to use this considerable amount of gas over the next few years instead of paying for it before the expiration of the contract. This “guarantees the future of Hungarian industry.” Unfortunately, we know nothing of the details–of the price of gas or the duration of the new contract. According to Magyar Nemzet, it is unlikely that Hungary will be able to purchase natural gas from Russia cheaper than, for example, Germany, a country that is not so heavily dependent on the Russian supply.

From Putin’s short speech we at last learned that it was, after all, Viktor Orbán who invited Putin to Hungary, a point of debate among Hungarian political observers. Putin talked about Paks and the 9 billion dollars Russia will lend to Hungary on very good terms. Paks will create 10,000 new jobs as an added bonus, he said. He found the talks very constructive. Putin made sure to mention that he invited Orbán to the celebration of the 70th anniversary of the end of World War II, which will take place in Moscow on May 9. Of course, Putin invited the leaders of all the countries that were involved in that war, but we don’t know yet whether, for example, Barack Obama will accept the invitation given “the deep chill in relations between Russia and the West, triggered by Russia’s annexation of the Crimea peninsula from Ukraine and its support for a rebellion in the country’s east.” North Korean leader Kim Jong-un was also invited to attend the ceremonies.

Viktor Orbán had the last word. He delivered a ringing speech attacking those people “who want to shut Russia out from the energy market of Europe, a proposition [he considers] utter nonsense (badarság).” Orbán I assume was referring to the United States. It is hard to fathom why it was necessary to attack Washington, especially after Péter Szijjártó expressed his hope for improved U.S.-Hungarian relations. Orbán said he was disappointed about the demise of the Southern Stream project but announced that Hungary has been negotiating with Turkey, Macedonia, Serbia, and Greece about a pipeline through these countries. According to Orbán, Vladimir Putin “has given us encouragement” to continue these negotiations. It was not quite clear what Orbán meant by claiming that between 1998 and 2002 “awful things happened in Russia.” Perhaps this was an attempt to explain why he as prime minister during those years was such a determined foe of Russia, despite the fact that Putin became prime minister of Russia in 1999. Finally he praised Putin’s Russia as a partner one can trust.

On the same day that Orbán met with Vladimir Putin, American Ambassador Colleen Bell gave a lunch in honor of Mykhailo Yunger, chargé d’affaires of the Ukrainian Embassy. Bell minced no words:

I find it significant and inspiring that the unity of effort among us has played such a critical part.  Our unity on sanctions has sent a clear message to Russia, that we cannot be divided.  And our collective message has also made clear that we do not accept the vision of “New Russia,” we do not accept Moscow’s explanation for the shooting down of the Malaysian airliner, we do not accept missile attacks on civilians in Mariupol, and we do not accept continued falsehoods about the recruiting, arming and equipping of separatists who are murdering and maiming innocent people including defenseless children.  We say no to this.  We say yes to Ukraine’s sovereignty.

As you are all well aware, President Putin is in Budapest today.  We could think of no better way to observe the day than to focus on our hopes for Ukraine’s sovereignty and its future, and to share those hopes with you, Mr. Yunger, among our friends and allies.

As a friend of mine, a well-known journalist, wrote to me: “after this speech they will wish Goodfriend back.”

Russia, Hungary, and the Hungarian minority in Ukraine

A few days ago an article appeared in Foreign Affairs with the somewhat sensational title “The Hungarian Putin? Viktor Orban and the Kremlin’s Playbook,” written by Mitchell A. Orenstein, Péter Krekó, and Attila Juhász. Orenstein is a professor of political science at Northeastern University in Boston and an associate of the Davis Center for Russian and Eurasian Studies at Harvard University. Krekó and Juhász are associates of the Hungarian think tank Political Capital. The question the article poses is whether Hungary entertains any irredentist plans as far as her neighbors are concerned, similar to the way in which Russia behaved earlier in Abkhazia and now in Ukraine. After all, the Russian attacks on those territories were preceded by a grant of Russian citizenship to Ukrainians and Abkhazians. To this question the answer is negative. Viktor Orbán may sound bellicose at times, but he is interested in the Hungarians living in the neighboring countries only as a source of extra votes and perhaps a reservoir of immigrants to a country with dismal demographic figures.

The authors claim, however, that there is “a delicate balance [which] could easily topple.” What created this delicate balance? Although “Hungary’s radical right-wing, fascist, and irredentist party, Jobbik, has virtually no support among Hungarians abroad,” it is still possible that “aggressive separatist political movements, especially those with external political support, could … act as though they have a majority beyond them, as in eastern Ukraine.”  I must say that the exact meaning of this claim is unclear to me, but the authors’ argument is that the “nationalist political use of Hungarians abroad in Hungary could set the stage for such extremism and instability in neighboring countries.” In Ukraine such a danger is real “where Orban has taken advantage of political chaos to press Hungarian minority issues … in the sub-Carpathian region of western Ukraine, adjacent to Hungary.” There are far too many “ifs” here, but it is true that Orbán did announce his claim to autonomy for the Hungarian minority at the most inappropriate moment, during the first Russian attacks on eastern Ukraine.

It is unlikely that Hungary could convince Ukraine’s western friends to force Kiev to grant autonomy to the Hungarians of Sub-Carpathian Ukraine (Zakarpattia Oblast) who constitute 12.1% of the total population of the province. In 2001 they numbered 151,500, but since then it is possible that many of them either left for Hungary or with the help of a Hungarian passport migrated farther west. On the other hand, one occasionally hears Russian voices outlining ambitious plans for Ukraine and its minorities. For example, in March 2014 Vladimir Zhirinovsky, head of the nationalist Liberal Democratic party that backs Vladimir Putin, suggested that Poland, Hungary, and Romania might wish to take back regions which were their territories in the past. Romania might want Chrnivtsi; Hungary, the Zaparpattia region; and Poland, the Volyn, Lviv, Ternopil, Ivano-Frankivsk, and Rovensky regions. Thus Ukraine would be free of “unnecesssary tensions” and “bring prosperity and tranquility to the Ukrainian native land.”

Or, there is the Russian nationalist ideologue, Aleksandr Dugin, the promoter of a Russian-led “Eurasian Empire” that would incorporate Austria as well as Hungary, Romania, Serbia, and Slovakia. Although Dugin’s specific recommendations were first reported on a far-right Hungarian site called Alfahir.hu, the news spread rapidly beyond the borders of Hungary. Dugin is an enemy of nation states and would like to see the return of empires. “If, let’s say, Hungary, Romania, Serbia, Slovakia, or perhaps even Volhynia and Austria would unite, all Hungarians would be within one country. Everything would return to the state that existed before Trianon.” Of course, Dugin’s argument is specious. Surely, a United Europe offers exactly the same advantages to the Hungarian minorities that Dugin recommends, but without the overlordship of Putin’s Russia.

One could discount these suggestions as fantasies, but something is in the air in Russia. The country’s foreign minister considers the fate of the Hungarian minority in Ukraine to be of such importance that at the Munich Security Conference a couple of days ago he spent a considerable amount of time on the minority’s grievances.

Mind you, Sergei Lavrov’s speech was met with derision by those present. As the reporter of Bloomberg described the scene, the “crowd laughed at and booed him.” Apparently, during his 45-minute speech he “rewrote the history of the Cold War, accused the West of fomenting a coup in Ukraine, and declared himself to be a champion of the United Nations Charter.” From our point of view, the most interesting part of the speech was the time he spent on the Hungarian minority in the Zakarpattia Oblast.

I think it is worth quoting Lavrov’s answer to a question that addresses this issue:

[The Ukrainians] are probably embarrassed to say it here, but now Ukraine is undergoing mobilization, which is running into serious difficulties. Representatives of the Hungarian, Romanian minorities feel “positive” discrimination, because they are called up in much larger proportions than ethnic Ukrainians. Why not talk about it? Or that in Ukraine reside not only Ukrainians and Russians, but there are other nationalities which by fate ended up in this country and want to live in it. Why not provide them with equal rights and take into account their interests? During the elections to the Verkhovnaya Rada the Hungarian minority asked to organize constituencies in such a way that at least one ethnic Hungarian would make it to the Rada. The constituencies were “sliced” so that none of the Hungarians made it. All this suggests that there is something to discuss.

Perhaps the most “amusing” part of the paragraph Lavrov devoted to the Hungarian and Romanian minorities in Ukraine is his claim that fate was responsible for these ethnic groups’ incorporation into the Soviet Union. I remember otherwise. The Soviet government kept the old Trianon borders without any adjustments based on ethnic considerations. The ethnic map of Zakarpattia Oblast shows that such an adjustment shouldn’t have been too difficult a task.

Ethnic map of Zakarpattia Obast  / Source: http://en.wikipedia.org/wiki/Zakarpattia_Oblast

Ethnic map of Zakarpattia Obast / Source: http://en.wikipedia.org/wiki/Zakarpattia_Oblast

The small Hungarian minority is obviously being used by the Russians to further their own claims, which in turn might encourage Viktor Orbán to pursue his quest for autonomous status for the largely Hungarian-inhabited regions of the oblast. The Orbán government supports autonomy for the Szeklers of central Transylvania despite the Romanian-Hungarian basic treaty of September 1996 that set aside the issue of territorial autonomy, to which Romania strenuously objected. The treaty had to be signed because NATO and EU membership depended on it. The Ukrainian situation is different because Ukraine is not part of the EU. Whether Orbán will accept the tacit or even open assistance of Russia for the sake of the Hungarian minority in Ukraine remains to be seen. In any case, to everybody’s surprise Viktor Orbán will pay a visit to Kiev where he will meet with President Petro Poroshenko.

János Kornai: Hungary’s U-turn

János Kornai, the renowned Hungarian economist, Professor of Economics Emeritus at Harvard University and Corvinus University of Budapest, has written a new paper about the situation in Hungary. He notes that the main direction of the changes up to 2010 was progress toward democracy, the rule of law, and a market economy based on the dominance of private ownership. Hungary is the first, and so far the only, member of the group of 15 post-socialist EU member countries to execute a sharp U-turn and set off resolutely in the opposite direction. The country has shifted from democracy to autocracy. The final version of this paper will be published in the October issue of Journal of Democracy. I’m grateful to Professor Kornai for allowing me to share this prepublication working paper with the readers of Hungarian Spectrum.

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Hungary’s U-Turn

János Kornai

 Prepublication working paper

January, 2015

Do not quote without the author’s permission

Hungary is a small country, poor in raw materials, with a population of only 10 million. No civil wars are being waged on its territory, nor is there any popular uprising or terrorism. It has not got involved in any wars, and it is not threatened by immediate bankruptcy. So why is it still worth paying attention to what is going on here? Because Hungary – a country that belongs to NATO and the European Union – is turning away from the great achievements of the 1989-1990 change of regime – democracy, rule of law, free-working civil society, pluralism in intellectual life -, and is attacking private property and the mechanisms of the free market before the eyes of the whole world; and it is doing all this in the shadow of increasing geopolitical tensions.

 

1

Let us consider the ensemble of the following countries: Albania, Bosnia-Herzegovina, Bulgaria, the Czech Republic, Estonia, Croatia, Poland, Latvia, Lithuania, Macedonia, Hungary, Romania, Serbia, Slovakia and Slovenia. All of these now independent countries reached a crucial turning point in 1989-1990. Previously, they had functioned as independent states or as separate parts of states within the socialist system, ruled by the Communist party. Then the change of system started. The structure and pace of the transformations varied from country to country. Severe failures occurred in all of them, including Hungary; one step forward was often followed by a period of regression. However, despite the colorful variations, the main direction of the changes was common up to 2010: progress towards market economy based on the dominance of the rule of law and of private ownership.

Hungary is the first, and so far the only, member of this group of 15 countries which has performed a sharp U-turn and set off resolutely in the opposite direction. At the 2010 elections the coalition formed by Fidesz – Hungarian Civic Alliance with the Christian Democratic People’s Party (henceforth Fidesz for short), led by Viktor Orbán, won a landslide victory. That was when the turn began.[1]

  1. By 2010 the fundamental institutions of democracy had been established in Hungary – however, with the U-turn their systematic destruction started. It has already been completed to a significant degree.

In actual practice the executive and legislative branches are no longer separate, as they are both controlled by the energetic and heavy hand of the political leader who has positioned himself at the very pinnacle of power: Viktor Orbán. No worthwhile preparatory work on bills is being done either within or outside the walls of Parliament.  Parliament itself has turned into a law factory, and the production line is sometimes made to operate at unbelievable speed: between 2010 and 2014 no less than 88 bills made it from being introduced to being voted on within a week; in 13 cases it all happened on the same or the following day. Without exception, every single attempted investigation of the background of a scandal that has just broken, which would have been carried out objectively by a parliamentary committee with the effective involvement of the opposition, has been thwarted. ‘Reliable’ people close to the centre of power occupy decision-making positions even in organizations which are not under the legal control of the executive branch and which, in real democracies, should serve as a counter-balance to monitor the executive and legislative branches: in the constitutional court, the state audit office, the fiscal council, the competition authority (the office in charge of enforcing pro-competition laws), the ombudsman’s office and the central statistical office, as well as the national tax and customs office.

  1. The basic institutions of the rule of law had emerged by 2010; however, since the U-turn they have been abolished or significantly weakened. The new Hungarian constitution was drafted by a small group within Fidesz, and no wide public discussion ensued. All protests were completely ignored, and it was dragged through the defective filters of the law factory in very short order. The text abounds with shortcomings, which were pointed out immediately (and in vain) by outstanding Hungarian and foreign legal experts. It contained so many clauses which served the immediate political purposes of the people in power that the document, officially called ’Fundamental Law’, has had to be amended five times. In 2011-2013 the Fundamental Law was complemented by the passing of 32 so-called ‘cardinal laws’, which future parliaments will be able to modify only by a two thirds majority. This collection of laws almost completely covers every aspect of the country’s life.

One of the fundamental principles of the rule of law is that no-one, not even those who hold the most power, should be above the law. The law must be respected. In Hungary, the situation has changed: the holders of power are able to elevate any decision to the status of law quickly and without let or hindrance, at the push of a button. They pass retroactive laws, disregarding the prohibition of such legislation which goes back to Roman times. If they wish to arrange especially generous treatment for an individual or an organization, they pass laws using legal tricks which ensure de facto favoritism.

Moving on to the juridical branch of the state, the Prosecution Service is a centralized organization in Hungary. It is theoretically independent, not under the control of the government. In practice, however, and that is what is important, the chief prosecutor is chosen by the holder of supreme power, followed by a purely formalistic appointment by the parliament, which from then on is unable to effectively control him. The chief prosecutor executes the central will through the hierarchy that he heads. With a few insignificant exceptions, the investigation of all public scandals and cases of corruption involving individuals close to the present government party has got stuck in either the investigative or the prosecution phase of criminal proceedings. The Prosecution Service has, on the other hand, brought its full powers to bear on other economic scandals and cases of corruption in which people belonging to the current opposition are implicated. Dramatic, spectacular arrests are carried out for the benefit of the cameras, which arrive in droves. Compromising facts are often leaked while investigations are still in progress. No effort is spared to make sure that these cases come to court, though it is true that all too often charges have to be dropped in the prosecution phase, for lack of sufficient evidence; in other cases the charges are rejected by the court. And it is noticeable that the timing of a leak, of the bringing of charges or of a court hearing coincides frequently with some event on the political calendar: the mine which will destroy a rival’s reputation is detonated just before an election.

We seem to be witnessing a decided attempt by the ruling political group to take control over the courts as well. The President of the Supreme Court, who had been appointed before 2010, was dismissed early, before his mandate expired. A new institution emerged, the National Office for the Judiciary, which from the very start acquired exceptionally wide powers: not only to appoint judges, but also to decide which cases should be heard by which courts. Later, as a result of protests in Hungary and from abroad, the sphere of authority of Office was reduced, but its influence has remained significant. The retirement age fixed for judges was conspicuously different from average age limits and from the previous norms, with the result that the older generation was expelled. This affected several judges in leading positions within the judiciary system, who had been appointed before the present ruling group came to power, and although this measure was subsequently annulled by the relevant international court, so that the people involved obtained at least moral redress, most of them were not able to return to their previous leading positions.

Numerous members of the judiciary are unable to escape from the intimidating effect of the government’s measures. Some cases which come to court have political ramifications, and impartial experts in the field believe that some judgments are biased in ways that favor Fidesz policies. Nobody ventures to express an opinion about the number of cases involved. What is sure, however, (and encouraging) is that the ruling regime has not managed to subjugate the judiciary to the same extent as they have done in other spheres.

  1. By 2010 private rather than state ownership had become the dominant form of ownership. Since the U-turn, however, private property has become the target of frequent legal, economic and ideological attacks; the weight and influence of the state sector is rising again. The nationalization of private pension funds financed from the obligatory contributions of employers and employees, which was carried out using unique legal tricks, dealt a heavy blow to the principle of respect for private property. A similar form of indirect nationalization took place in the sector of saving and loan cooperatives. The state-owned sector has expanded significantly in the branches of banking, energy, public works, transportation, the media and advertising. In these areas the harsh means of disguised confiscation were not so often applied: property rights were bought instead. In many cases the previous owners were forced into a position where they felt they had no other option but to sell their property to the state, and at a price well below its market value.
  2. Up to 2010, decentralized mechanisms played an increasing role in the coordination of various activities. However, since the U-turn the tendency to centralize has become noticeably stronger.

This is primarily true of government administration. One of the major achievements of the change of regime was a significant increase in the powers of local government. The most obvious sign of regression is the fact that schools and hospitals no longer belong to local authorities, but are run from the bureaus of the central government. It is unprecedented – even on a world scale – that a misshapen bureaucratic giant has emerged, which decides over the heads of teachers, parents and local governments about staffing, curricular and financial matters in thousands of schools.

The obsession with centralization, which is intertwined in many ways with the aforementioned tendency to nationalize, affects almost all spheres of society: more and more  questions are decided at the highest level. A pyramid-like vertical hierarchy has emerged and solidified, with the supreme leader at its summit. Below him, ready to obey his every command, stand his hand-picked henchmen, who owe him unconditional loyalty.  Moving on down, we find the next level of the pyramid, and the next: for each position people are chosen for their loyalty to the regime. Commands which take obedience for granted tightly bind each subordinate to his or her superior. It is only the leader at the top who does not depend on his superior, only those at the very lowest level do not give orders to anyone. Everyone else incorporated into the levels in-between is servant and master at the same time. It is in their interests to hang on in there, to move further up in the pyramid. Their position is not decided at elections, but depends on winning the trust of their superior by services and flattery, or at least by uncritical obedience. Hundreds of thousands of public employees, including those who work in the state-run educational and health sectors, feel defenseless: few dare to speak up, to protest, because they fear for their jobs. The regime is robust, partly because it can surely count on the fear of the majority of people dependent on it, as well as on the ‘keep a low profile and obey’ mentality.

A very important decentralized mechanism is represented by civil society, a number of non-market based organizations and associations which are outside the control of state bureaucracy. In twenty years these have developed too, and have also become a means of scrutiny without which it would be impossible to expose and fight abuses of power. One manifestation of the U-turn is the methodical harassment of civil society. When parliamentary bills are being drafted trade unions and other relevant organizations are not consulted. Or if the people concerned express their point of view, in declarations or at demonstrations, their voices are disregarded. The indignant protest of the Norwegian government against the Hungarian government’s plans to interfere in their generous offer of assistance to Hungarian civil society is widely known.

While describing the processes of reversal I did not discuss the causes that induced   the U-turn. There were several important factors here: the grave mistakes made by the governments between 1990 and 2010 and the political parties functioning within and outside the parliament, the spread of corruption, the trauma caused by the appearance of mass unemployment, the increase of social inequality and the disappointment of a large proportion of the population after the high expectations brought by the change of system. It takes a long historical process for democracy to mature, and Hungary has just begun that learning process. It would be essential to complete a thorough causal analysis of the historical past; this, however, exceeds the limits of this paper. Therefore I will only deal with the new period starting with the 2010 elections.

2

When describing the coordinating mechanism of economic activities we cannot apply the metaphor of the U-turn: it would be more precise to call it a half-turn. Market mechanisms became dominant in Hungary in the first two decades after the change of system, and remained so even after 2010. Just as before, state and market continue to coexist in a symbiosis: there is no modern economy where these two social formations would not coexist and exert reciprocal effects.  The change that Viktor Orbán’s regime introduced is that now the state impinges on the economy in a much more aggressive fashion than the governments before 2010 did: it exerts more efforts to rule over it. This is done in many ways.

We are not talking about a case of ‘state capture’ carried out by a small group of oligarchs in order to establish regulations and pass measures in their own interests.  The direction of the process is the reverse. Orbán and the people who are close to him at the peak of political power decide who should become an oligarch, or who should remain an oligarch if he already is one, and how far his sphere of authority should extend.  Something similar takes place at lower levels too. The natural selection of market competition is overwritten by political considerations. “The important thing is that our man should win the public procurement tender, get permission to run a tobacconist’s or a casino, obtain tenure of that state-owned piece of land”. Tobacconists, casinos and land tenure all work on capitalist principles, but at the same time clientelism, a kind of feudal master-servant dependency, is asserted between the politician/bureaucrat and the capitalist entrepreneur.

A new term has been introduced into everyday Hungarian: ‘Fidesz-közeli cég’, meaning ‘a near-to-Fidesz company’.  Such firms do not belong to the party, but the sole or principal owner of the company is a crony of the political center. Maybe the association began a long time ago, at university or when the party was founded; or an individual’s career may have included a succession of political, bureaucratic and business activities. ‘Crony capitalism’ evolves. The intertwining of the worlds of business and politics is a global phenomenon, and provides fertile soil for corruption everywhere. What comes on top of this in Hungary is the social environment created by the aforementioned U-turn: the very organizations which should be fighting, with the authority of the state behind them, against the intertwining of business, politics and government and against corruption are not independent: they themselves are cogs in the same machinery. Just like any member of the Mafia, a corrupt politician or bureaucrat knows that the Mafia state will protect him – unlike the ‘whistleblowers’, who take personal risks to unveil corruption. The latter are not sufficiently protected, but often harassed, and even ‘character assassination’ campaigns are launched against them.

Viktor Orbán and those who implement his economic policies are swift to emphasize that if the state needs more income this will not be a burden for the people, and there will be no  ’austerities’. The new tax will be paid by companies, out of their profits. The word ‘profit’ itself has as bad an undertone as it did in the good old times when Marxist political economics was an obligatory subject for study. Above the usual forms of taxation special supertaxes have been used to pillage whole sectors, especially banking but also telecommunications, insurance, houehold energy supply, and a few other sectors. The effect of special taxes contributes to the fact that the volume of investments by private companies financed from their profits stagnates or barely increases. An unpredictable tax policy, legal uncertainty and anti-capitalist rhetoric discourage the ’animal spirit’; the propensity to private investment.[2] The extra-ordinary tax burdens ensure that the budget is balanced, which is reassuring for international organizations and credit rating agencies who are extra-sensitive to this indicator, but it does undermine an extremely important factor promoting growth and technological development. Moreover, it is not true that the extra burdens hit on the companies only, as they pass the extra costs, if possible, to the consumers.

While companies are held to ransom, the individual tax burden based on dividends has been significantly reduced. One of the first measures introduced by the Fidesz government was the abolition of progressive personal income tax, which was replaced by a flat rate of 16 percent, while at the same time value added tax was raised to an unprecedented 27 percent. It is known that in relation to the income of a given household, these tax rates impose a much greater burden on the living standards of people with low incomes than on those who earn more. Government propaganda proclaims as a great achievement the reduction of household expenditure on utilities through price-cap regulation. In reality, this price-capping policy is far more beneficial for the rich, as the bigger the flat, the more electricity, gas and water it uses, and the more rubbish it produces, the more it saves. We are all too familiar with the consequences of artificially depressing prices from the days of socialism. Companies make a loss, which in the end has to be scraped together by the community of tax-payers.

Restricting the functioning of the price mechanism is an important feature of the general phenomenon which has just been discussed: the state leans heavily on the private sector, using, among other means, administrative micro-interventions, fine-tuning of control and excessive regulation. Every economist who has studied the theory of market failure knows that appropriate regulation and well-aimed intervention can correct many problems caused by an uncontrolled market mechanism. This theory, however, at least tacitly, supposes that the state is at the service of public interests, and that regulation is carried out professionally and without bias. What happens if the levers of regulation are seized by incompetent or even corrupt people? What happens if a state whose masters use the state mechanism to preserve their own power interferes in the economy? Such interventions happen so frequently and affect the coordination process of the economy so deeply that sooner or later the half-turn can become a U-turn in this field as well.

The economic policy followed by Fidesz cannot win the approval of the conservative economist because of the upheaval that it causes to market mechanisms and the way it threatens private property. At the same time, it arouses rightful indignation in the liberal economist who is sensitive to the injustice in the distribution of income. It is not only the tax policy mentioned above, but various other measures must be disagreeable for them. The adherents of Keynesian economic policy must not let themselves be deceived by aggregate employment statistics. The revival following the depression is dragging its feet, the private sector is creating few new workplaces. The growing number of people in ’public work’ is supposed to make up for that. But they are employed for rock-bottom wages, 31-33 percent of the average salary, under degrading circumstances; they are not guided into the employment market this way, but kept permanently in their humiliating condition. Poverty and social exclusion are increasing at a dramatic rate. Enlightened societies would never tolerate the tone of voice that is used to stigmatize the poorest, or the way the homeless are chased out of cities by mayoral decree.

Any attempt to squeeze the classification of the Hungarian government’s economic policy into boxes labeled ’right wing’ or ’left wing’ is off-track. There is no question of the government intending to restore the socialist system, even though some phenomena are surprisingly reminiscent of the socialist era. The Orbán regime is not only compatible with capitalism, but each member of the power pyramid uses the opportunities offered by capitalism to their own advantage. When they launch an attack on banks or other sectors, they immediately conclude a special deal with this or that bank, sign ’strategic agreements’ with this or that large company in front of television cameras. ’Divide and rule!’ Instead of the left-right division, let us put the economy into another kind of spotlight: what best serves the survival of the existing power structure, the power of the central will, the interests of the higher levels of the power pyramid, including their financial interests? Suddenly it all falls into place and we know why this new institution or that new law emerged.

3

Hungary’s friends abroad, intellectuals, journalists, political and economic analysts, diplomats and politicians who take an interest in the happenings here, do unintentionally fall into various traps or misunderstandings. One of these is to overestimate the value of the letter of the law.  At first, the Fidesz government created a law which failed to guarantee the complete independence of the central bank. Not only the media, but also the competent international organizations exerted pressure on the Hungarian state to change the law. This finally happened. Those who had demanded the change felt they had achieved success. The propagandists in Budapest used it to illustrate how flexible and ready to compromise the Hungarian government is. In reality, what happened to the law was irrelevant. Having resigned from his position as minister of finance György Matolcsy, who the prime minister publicly dubbed “his right hand”, stepped out of the ministry, walked a few hundred yards and entered the doors of the Hungarian National Bank, as its theoretically independent governor. Without exception, every single member of the highest body of the central bank, the Monetary Council, was hand-picked by the supreme leader and his advisers; they are all loyal members of the consolidated machinery of power.

According to the letter of the law, every single selection process conforms to various seemingly neutral legal regulations. For example, for one position the current Prime Minister nominates a candidate, the competent parliamentary committee expresses an opinion, and he is appointed by the President of the Republic. For another position the parliament not only expresses an opinion about the candidate, but also makes the final choice. Does this matter? The parliamentary committee, the majority of the complete session of parliament (a two thirds’ majority, at that), and even the President of the Republic are all cog-wheels in the same machinery of power.

Another important example is how the regime leans on the press, television, radio and other means of telecommunication. This is about nothing less than the independence of the ‘fourth branch of power’, the liberty of one of the most important checks and balances which function in real democracies. The competent bodies of the European Union and the international press dwelled at length upon the question of whether the rights allocated  to the centrally appointed media authority were excessive or not. Finally, a few regulations of the law on the media were amended. The critics considered this a victory. Viktor Orbán and his colleagues, however, knew perfectly well that it was irrelevant. What really mattered was the fact that they had put their own people in charge of all television channels and radio stations owned, controlled and financed by the state, who then purged their staffs and turned all of them into the collective mouth-piece of government propaganda. The government or near-to-Fidesz entrepreneurs seized the freely distributed and very popular advertising broadsheets and other free local media products. The state media are obliged to use material provided by the news agency controlled by the government. This is not obligatory for the country’s privately owned media, but the latter are offered new state-produced material free of charge, while purchasing news from independent international agencies or trawling the foreign press is expensive. It is hardly surprising that they are reduced to using the free material. Self-censorship, a form of behavior all too familiar from the communist era, is becoming widespread.

There are newspapers, television channels and radio stations which are independent of the government, and critical of it. This is very important; it is part of the impartial description of the present Hungarian situation. However, many obstacles are raised to their functioning, for example during the distribution of broadcasting frequencies, when licenses are granted. Their main source of revenue is advertising. Not only the government’s own agencies, but also private companies which wish to maintain friendly relations with the political masters refrain from advertising with them. Discrimination manifested in the advertising market has been compounded by an advertising tax piled on top of the existing corporation tax. The relevant decrees were worded in such a way that 81 percent of the advertising tax was to be paid by one broadcaster, RTL, even though its share of the advertising market is only 15 percent. This is how one company has been punished for its dogged independence and regular criticism of Fidesz politicians.

No matter how hard the authorities try to subdue the organizations which form public opinion, the IT revolution has made their task more difficult. Stalin was able to surround his empire with almost impenetrable barriers, but nowadays this is impossible: computers, tablets and mobile phones connect the individual with the world through the internet, hundreds of thousands can express their opinions and organize themselves on social networking sites. The Fidesz government would love to find a way to prevent this too.  Not long ago it proposed the introduction of an internet tax. Each gigabyte data transfer would have been taxed to the tune of 150 forints (roughly 55 USD cents). Within a few days, mass demonstrations had been organized; images of the protesters circulated in the international press. Viktor Orbán retreated – half-way: as I write these lines it is not yet clear if the plan has been abandoned for good or merely postponed. Whatever may happen, the image of tens of thousands of demonstrators raising their mobile phones to the sky has become a symbol. The light from the tiny screens might even have illuminated the clouds of the internet – today no regime is able to raise impassable barriers to the flow of free speech.

 4

Here is another frequent intellectual fallacy: certain recently established Hungarian institutions, or new procedures that have been introduced lately, are similar or even identical to the parallel institutions of a traditional Western democracy – at first sight. Many changes have been made in the Hungarian judicial system. What is wrong with that? After all, even after these recent changes, in many ways it still resembles the systems of some European countries. The tobacco trade used to consist of small shops competing with each other. Now  only the government is allowed to issue a license for the sale of tobacco. What is wrong with that? After all, in Sweden a state monopoly with similar or even greater powers covers the trade in alcoholic beverages.

What we have is a mosaic, many pieces of which are original Hungarian products, while others have indeed been imported from democracies abroad. However, if we look at the mosaic as a whole, the outlines of Viktor Orbán’s Hungary emerge. It is actually better to move away from the static image of a mosaic to represent the relationship between ‘part’ and ’whole’. It is not a fixed state that we have to interpret, but a dynamic process. What we have to recognize is the direction that has been followed by each small component of the machinery since the starting point in 2010. From then on, at every new change, we, the observers, must notice which direction the change has taken. In the US, the mandate of the members of the Supreme Court lasts for the rest of their lifetime. There, this regulation has emerged within the framework of a stable democratic order, with many checks and balances in operation. In Hungary, on the other hand, for the first time now the vast majority of members of the Constitutional Court were chosen by the current prime minister – and in a few years all the members, without exception, will be Viktor Orbán’s nominees. If their mandate, is being extended right now, this move, along with other similar moves, will shift the legal status of the country towards irreversible power relations. Thousands (yes, the number is no exaggeration) of discrete changes, all moving together in the same direction, create a new system. Understandably, the Budapest correspondent of a foreign newspaper might write about only one outrageous measure without putting the event into the whole context of Orban’s system. An international organization or a foreign government might be justified in protesting against a specific measure taken by the Hungarian government, and in trying to exert its influence to have this measure modified or withdrawn. This article is intended to help those who form public opinion abroad and those who plan and implement measures taken in the world outside that concern Hungary to a better understanding that more is at stake than a momentary event:  this is now a strongly forged system, whose essential properties cannot be altered by partial modifications.

Another intellectual fallacy is the faulty evaluation of the legitimacy of the Orbán government. “Although I don’t like what is taking place in Hungary, it seems to be what the Hungarians want.” This opinion is further reinforced by the official propaganda, which is busy announcing that the regime won a two-thirds majority for two successive parliamentary cycles; there is no other government in Europe that enjoys such strong support.  Yet let us take a closer look at the facts.

Kornai table
At the last election only every fourth person entitled to vote expressed the wish that Viktor Orbán and his party should govern the country. The others either voted for another political faction or expressed their weariness and disappointment in politics by abstaining. By staying away perhaps some people wished to indicate that they found the regime repellent, but they did not believe that their vote would bring about any change. Political legitimacy is not a binary variable: no government is simply either legitimate or not – but measured against the continuous scale of legitimacy, support for the Hungarian government is low. The election system itself, introduced after the change of regime, has offered the opportunity for a considerable difference between actual political support and the proportions among the representatives.[3] That gap has further widened as since the 2010 elections the electoral laws have been modified seven times; while Fidesz lost more than half a million votes, and the fraction of all eligible voters who voted for Fidesz dropped from one third to a quarter, the regime used legal tricks to maintain a proportion of deputies which is higher than the critical minimum needed to pass laws requiring a two-thirds majority.[4]

There is another intellectual trap connected to the misinterpretations that I have just mentioned; those who have fallen into it may see the Hungarian state of affairs thus: “It is true that the Fidesz regime has abolished many democratic achievements. However, the present form of government must still be considered a democracy.” At this point the debate about what we call ‘democracy’ begins. There is no consensus between academic political philosophers and political scientists. The terminology used by people who are actively engaged in politics is interwoven with elements of political rhetoric. Where the term ‘democracy’ is an honor, the status of democracy is awarded or denied to the Hungarian form of government by the journalist, political analyst, politician or diplomat according to whether they hold a favorable or an unfavorable opinion of the present Hungarian system.  The terminological confusion remains even when ‘democracy’ receives a defining attributive. The expression ‘illiberal democracy’ was originally introduced to political science with pejorative connotations, while Viktor Orbán uses the term ‘illiberal state’ with self-assured pride to describe his own system.

An apt description of the present Hungarian political system / Source 168 Óra

An apt portrait of the present Hungarian political system / Source 168 Óra

Let us look at the set of previous and present historical forms of government that have characterized recent history. In one group we find democracies. Members of the European Union before its expansion, the US, Canada, Australia, New Zealand, Switzerland and Israel surely belong to this group, and as far as this article is concerned the question of which other countries might also belong can be left open for the time being. What is sure is that the essential common features do not exist only in theoretical texts, but can actually be experienced.  ‘Checks and balances’ are not merely requirements supported by arguments put forward by political philosophers – they really do exist, and their functioning can be experienced by observation. We can say the same about respect for minority rights; there are written and unwritten limits to what the majority, however large it may be, can do against the will of the minority. We could go on listing other important common features.

In the other group we have dictatorships.  For me, and for several hundred million other people, this is no abstract theoretical concept: it is a cruel, personally experienced reality.  Thirty years ago 28 countries belonged to one kind of dictatorship: totalitarian communism.

In between the two extremes, the set of all kinds of governments includes a subset; countries which belong here are neither democracies nor dictatorships, though they bear characteristic features of both. In my own work I have joined other authors in calling them autocracies.[5] This class is made up of a colorful multitude: I would place in it the pre-war regimes of the Hungarian regent Miklós Horthy and the Polish statesman Jozef Pilsudsky, or that of the Argentinean president Juan Domingo Peron in the post-war era. In our own time, besides the Russian president Vladimir Putin, the leaders of Belarus and many Central Asian post-soviet states rule over countries which belong to this subset.

I believe that under Viktor Orbán Hungary has moved from the subset of democracies  into the subset of autocracies. I am not talking in the future tense, about the danger of the country becoming an autocracy. The move has already taken place: the change has happened.

To consider Orbán a dictator would be to misunderstand the present Hungarian situation. Hungary today has a multi-party system, opposition parties function legally, newspapers opposing the government can be published. Political opponents are not imprisoned en masse; nor are they liquidated. We know all too well what real dictatorship is; we have experienced it, and what we are experiencing now is not that. However, to believe that Orbán is the leader of a democracy, and that although he breaks the rules of democracy from time to time, in the end he still behaves like a democrat, would also be a misunderstanding.  I do not even want to raise the question of whether Orbán, in the depths of his heart, is a true democrat or not. This may be an important question for his future biographer, but it is irrelevant for our analysis. We have to investigate what has actually already happened. And what has already happened is enough for us to say that Hungary now belongs to the wide subset of autocratic countries that are “neither democracies nor dictatorships”.

It would be a mistake to believe that Orbán is copying Putin. All autocracies are built on different historical traditions; they have emerged in different domestic and international environments, and the personalities and aspirations of their highest leaders differ. Orbán is not an imitator of others, he is a self-determining personality. This does not alter the fact that both the Putin and the Orbán regimes belong to the same subset of autocracies.

Hungary is the first of the post-socialist democracies that has joined the autocracies, but there is no guarantee that it will be the only one.  The balance of power might shift in other countries in such a way as to turn them into autocracies. There are foreign politicians who see Orbán as a model; there is a real danger that this contagion, leading to the loss of democracy and of the rule of law, will spread.

5

One of the sources of Viktor Orbán’s support is the fact that many see him as the staunch defender of the sovereignty of the Hungarian state, and of Hungary’s independence.  However, anyone who wishes to understand the Hungarian situation must realize that the problem cannot be shrugged off by simply labeling Orbán as a nationalist.

Worldwide, we can see two opposing tendencies. Globalization, the internet, the technical ease with which we travel, the emergence of transnational integration are all making the world more international. At the same time, national sentiments within the boundaries of a nation-state or in communities which reach beyond national frontiers but use a common language, and share common historical traditions, still persist; indeed, they are growing ever-stronger.

The change of regime not only brought about internal revival, but also coincided with the restoration of Hungarian sovereignty. “Russians go home!” was the first slogan; a happy separation from the East, an expectant turn towards the West. Western exports and imports were becoming more and more significant. Plenty of foreign capital was flowing into the country. Hungary joined NATO in 1999, and became a member of the European Union in 2004. In both cases, the intention to join was confirmed by a referendum, and in the campaigns leading up to these all the parliamentary parties, Fidesz among them, encouraged their followers to support the move. Although counter-opinions have always been present and voiced, for twenty years the direction of changes in foreign policy remained unambiguous. Hungary must be an organic part of Europe: it must unambiguously belong to the Western world; it must further strengthen the links binding it politically, economically and culturally to the West.

The year 2010 saw a peculiar U-turn in this area as well: unambiguity has been replaced by ambiguity. This emerges mostly in the rhetoric of official statements. Leading politicians grieve at public meetings about the crisis of world-wide capitalism and Western civilization. The leaders of the regime make use of the anti-EU, anti-American atmosphere; sometimes they go as far as to compare directives from Brussels with the pre-1989 dictates of Moscow. But if yesterday there was talk of the emasculation of the West and of the great things to be expected from the East, today’s discourse will be just the opposite. Orbán is proud of his Janus-face, and considers it the sign of his political shrewdness.[6] The content and tone of the words change, depending on whether they are intended for the Party faithful or spoken in Munich or Vienna at a conference for businessmen.[7] It is hardly surprising that both followers and opponents, both Hungarian and foreign observers, are mightily confused.

In the world of foreign policy and diplomacy official or semi-official statements can carry a lot of weight. Hungary is still member of NATO and the European Union; there has never been the slightest hint of any intention to leave either body.[8] The Hungarian government is happy to receive the plentiful financial support that flows from the EU; the only thing it insists on is full control over its distribution. (We have already mentioned the real motivating forces and intentions which govern state allocations.) At the same time the representatives of the ruling political regime regularly support Euroskeptic declarations.

The Hungarian diplomatic corps resolutely attempts (without much success) to establish business relations with various Asian autocracies and dictatorships, from Azerbaijan, Kazakhstan, Uzbekistan and the Arab Sheikdoms to Vietnam and China, pointing out that other countries do the same. This is purely about business; taking a stand for democracy and human rights is another issue. But they sometimes ’rise above’ this point: recently Orbán called Azerbaijan a “model state” when its dictator was on an official visit to Budapest.

Understandably, other countries take the keenest interest in Hungarian-Russian relations. As we noted earlier, the present Hungarian and Russian forms of government share several features; in this respect both regimes belong to the same subset of autocracies. But now we are not focusing on this similarity, but on the economic connections and relations in foreign affairs between tiny Hungary and huge Russia. In this relationship, how far can the sovereignty of Hungary be maintained; to what degree is it committed now and for the future to its Russian partner? The corollary is another question: how far do these present tendencies endanger Hungary’s commitment to the European Union, to NATO, to the Western world?

In order to be able to answer the question, we would need, for example, to know more of the conditions under which in January 2014 the Hungarian and Russian governments reached an agreement over the expansion of the largest Hungarian power plant, the Paks nuclear power station. I am not in a position to judge whether this large-scale expansion of Hungarian nuclear power capacity is justified, and if it is, whether the Russian proposal was the most advantageous in technical, financial and geopolitical terms of the possible alternatives.  What many people in Hungary and abroad object to, and with good reason, is the way in which the decision was brought. It was not preceded by public debate among experts; the government’s plans were pushed through the parliamentary law factory without the least publicity.  In this crucial issue, which will have a deep impact on the lives of many future generations, on European integration, on the foreign affairs of the country, on its commitments to its allies, the government confronted the public with a fait accompli.

Reflecting on the relationship between Hungary and other countries, the following question must be considered: what can Hungarians who worry about the U-turn, who fear for democracy, for the rule of law and for human rights expect from their foreign friends? A new development may be followed by cries of: “the West won’t put up with any more of this”. I am afraid many people nourish false hopes. The learning process is painfully slow; it takes years for foreign observers to realize there is anything wrong, and even longer before they put the different elements of the phenomenon into the right context.  And comprehension is only the beginning, what else is also needed if recognition is to be followed by some kind of action? This is a task that international organizations are not used to; they are at loss as to how an allied state can be forced to abide by the rules of democracy. Not many means are available. The European Union is unprepared for a situation where one of its members keeps turning against the value system and formal and informal norms of its community. And let us not forget that Hungary is only one small point on the map of the world; conflicting interests influence the motion of political forces. The special interests of countries, political groups, social classes and professions pull the main actors in many different directions. Threatening situations more important than the Hungarian one have proved impossible to solve reassuringly by peaceful agreements.

6

I have left the survey of the changes which have taken place in the ’ideological sphere’ to the end. A fundamental characteristic of communist dictatorship is the existence of an ‘official ideology’. The roots of its ideological history go back to Marx and Lenin, its terminology comes from the language of Marxist-Leninist party seminars. The communist party kept it up-to-date, and adapted it to the propaganda needs of whichever party line prevailed at the time. The citizen, especially the ‘cadre’ with a role in the system, was obliged to accept the ideology; he had to articulate it both verbally and in writing.

Following the fall of the old regime, the same main direction of change unfolded in this sphere too: the dominance of ‘official ideology’ was replaced by pluralism in the ideological world. Compared to this main tendency, we can observe a U-turn here too. The government strives to limit and discredit the principle of pluralism. It tries to force on society those theories, beliefs and norms of behavior that it considers the only acceptable dogma.

First of all, it vigorously established institutions which promote the execution of the central will. For the world of artists, pluralism and diversity are essential elements. Accordingly, in free societies many kinds of associations and unions, schools and groups coexist side by side, competing or even fighting with each other. The regime which seized power in 2010 selected a small group and invested it with powers that would be unimaginable in the West. Their main organization is the Hungarian Academy of Arts (Magyar Művészeti Akadémia). Other organizations and groups do still exist, but the name of this privileged body appears even in the constitution. It was given one of the most beautiful palaces in the capital as its headquarters, and made responsible for distributing the majority of publicly-funded cultural grants, as well as most awards and marks of recognition which come with financial rewards.

In the scientific world, the situation is similar. The Hungarian Academy of Sciences boasts a long history, and though its independence was severely curtailed by the party state under communism, its autonomy strengthened after the change of regime. It used to exercise considerable influence over decisions about which research projects should be funded by the state, through an institution which, like the American National Science Foundation, relied on expert opinion. Now, however, centralization has taken place here too. The National Innovation Office (Nemzeti Kutatási, Fejlesztési és Innovációs Hivatal), a leading state organization, was established. The Academy and other scientific organizations might try to express their opinion before final decisions are taken, but the days of a decentralized, professional and civil approach to funding allocations are over – the president of the office has sovereign decision-making powers. And who is that president? None other than the minister of education from the first Orbán government.

Turning to the sphere of education: the change of regime made the emergence of a real text-book market possible. The writers and publishers of school books could compete with each other; schools, or even individual teachers, could decide which books to use. Right now, competition is being abolished here too: a mammoth state text-book publishing house has been set up and granted what is effectively a near-monopoly.

What ideas is this increasingly centralized, nationalized, standardized machinery trying to promote? A return to the past is perceptible here too; not to the previous regime with its Marxist-Leninist ideology, but to an earlier ideological past. The official ideas of the pre-1945 Horthy period are being revived in various forms, with increasing strength. It is impossible to describe these with a handful of concise expressions such as nationalism, chauvinism, ethnic or religious prejudice or a conservative view of the family, because they appear in a variety of shades. Official politicians never make open and extreme declarations that would offend the ears of the civilized world; there are, rather, many covert hints and indirect expressions. But in that muted music, the marching tune for boots tramping out the same rhythm can be heard. To the ears of my generation the sound is familiar and frightening.

The images of cultural and academic life and of the world of ideas that I have highlighted here dovetail with the general description of the present-day Hungarian system, which was summarized in an earlier section of this article.  This sphere too bears the mark of an in-between state that is ‘neither democracy nor dictatorship’. The regime is trying to encroach in an increasingly aggressive fashion. Luckily there are large numbers of writers, poets, musicians, film-makers, artists, scientists, teachers and free-thinking intellectuals who will not allow themselves either to be intimidated or to be bought by money and rewards, and who protect their intellectual autonomy. Any visitor to Hungary can testify that intellectual life is thriving: great artistic works are born and significant scientific advances are made.

7

When I was giving lectures in the USA on a delicate and complicated situation, during the post-socialist transition, I was always asked the question: what should be done? What can we do? I admire and respect this readiness to act, but it is not my task to answer the question. My paper solely aims at revealing the situation; I wished to contribute to our American and other foreign friends’ better understanding of the Hungarian scenario.

What does the future hold for Hungary? One of the theories of democracy, linked mainly to the name of Joseph Schumpeter, deserves close attention. It does not dwell on how far a certain form of government expresses the ‘will of the people’, or at least of the majority. It considers democracy primarily as a procedure which enables the people to get rid of a government, not through the murder of a tyrant, not through conspiracy, military coup d’etat or a bloody popular uprising, but in a peaceful and civilized way, through elections which are well defined in legal terms, with many competing parties. The feasibility of dismissal is not a sufficient condition for a viable democracy, but it is a necessary one: it is the minimum condition.

It will be some time before we can say for sure whether this minimum condition is met or not. In Sweden it took forty years before the social-democratic government was dismissed at the 1976 elections. In Britain the conservative party ruled for eighteen years, from 1979 to 1997, before it was voted out of office. The historians of the future will give a final answer to the question of whether the minimum conditions of democracy are met in Hungary or not. However, many things are already clear.

Viktor Orbán and his party have ‘cemented themselves in’  – to translate an expression which has become commonplace in Hungary. The repeated modifications made to election laws were intended to favor a Fidesz victory, or rather, to make it an absolute certainty.  Should the need arise, the laws can be further modified without any hindrance. Fidesz was prepared for the unlikely but not impossible event of its failing to win a parliamentary majority at the elections. The mandates of many key positions, most importantly that of the chief prosecutor, the president of the republic, the head of the central bank, of the audit office and of the judicial office, extend beyond the current parliamentary cycle; they can all sit tight , even if the opposition wins. The Fiscal Council, a body appointed by the present government, but which would remain in office even in case of an election defeat, has not only an advisory role but also the right of veto over the budget submitted by a new government, and if that veto is used, the president of the republic may dissolve the parliament and call for new elections. In other words a few hand-picked men loyal to the present government would be able to overturn the next government.

All of this leads to the logical conclusion that it would probably be extremely difficult to effectively dismiss the government at parliamentary elections. In this sense, the situation that has emerged is nearly irreversible. Historical experience shows that an autocracy can only be brought down by an ‘earthquake’ that rocks the very foundations of the system.

Other future scenarios are also possible. The great events of history cannot be predicted on the basis of mathematical probabilities; every constellation is unique and unrepeatable. The situation could turn out a lot worse than today. The present Fidesz autocracy could react to the growing protests by hardening the repression. Or another way of events is also possible. Jobbik, the party of the extreme right, already represents a significant force; in more than one city its candidates have been elected as mayors. They speak undisturbed in parliament and in the street. What would happen if in a future election Fidesz did not manage to win a parliamentary majority? Would they be prepared to make a coalition with the extreme right? There is a historical precedent: towards the end of the Weimar republic the moderate right-wing conservative party entered into a coalition with Hitler’s party; together they constituted a parliamentary majority.

At the same time, favorable scenarios are not impossible either. What if more moderate groups within the ruling party are getting the upper hand, who are ready to stop on  the wrong track and turn back, in the direction to democracy and the rule of law? What if the opposition pulls itself together? What if new political movements emerge and win over millions? What if somehow, in spite of an electoral system which almost guarantees the defeat of future democratic forces, the tables turn?

Let us not give up hope.

—–

The printed text here contains very few footnotes. Further footnotes as well as a list of sources on the topic, in both English and Hungarian, will be available in a Web version of this article, available on the authors website: http://www.kornai-janos.hu.

[1] A few months after Fidesz took over the government I wrote an article entitled “Taking Stock”(“Számvetés”), which gave a summative overview of the main characteristics of the changes that had already taken place and which could be expected. Two volumes in Hungarian, edited by Bálint Magyar, were published under the title The Hungarian Polyp – The Post-Communist Mafia State.

The text here contains very few footnotes. Further footnotes as well as a list of sources on the topic, in both English and Hungarian, will be available in a later Web version of this article.

[2] The spectacular new projects inaugurated with pompous ceremonies by political leaders are mostly financed by European Union funds or are established by multinational companies.

[3] About half of the seats are divided among the parties in direct relation to the proportion of the votes. The other half are allocated in every constituency following the ‘winner takes all’ or ‘first past the post’ principle best known in the British system. That secures a large number of seats for a party which has even a small relative advantage over their rivals in several districts.

[4] Compare these figures with German data from 2013. The CDU/CSU received 29.7 per cent of the vote (41.5 per cent of those eligible actually voted). This is only slightly lower than the Fidesz results. But the actual proportions of votes are represented by parliamentary proportions in the Bundestag. Thus, Merkel did not have a majority, and a coalition with the Social Democrats is governing that country.

[5] In the related debates in Hungary, referring mostly to international sources, diverse terms have been in use, for example, ’managed democracy’, ’Führer-democracy’, or ‘elected despotism’.

[6] Viktor Orbán said the following in 2012: “There is a dance routine in international diplomacy. This dance, this peacock dance … has to be performed as if we wanted to be friendly. These are, let’s say, exercises in the art of diplomacy. … So we accept two or three out of seven proposals, those two or three that we have followed already, except they didn’t notice, and we reject the remaining two we didn’t want, saying ‘C’mon, we have accepted the other ones.’ This is a complicated game. Unless you insist, I’d rather refrain from entertaining you with the beauty of the details.”

[7] A characteristic scene of the ’peacock dance’ is the duplicity shown by Fidesz and the government towards Jews. More than once the government has emphatically  declared that it will not tolerate anti-semitism, and if necessary it will defend its Jewish citizens against any kind of attack. At the same time several government measures gravely profane the painful historical memories of Hungarian Jews. For example, it is falsely suggested in various ways that the deportation of hundreds of thousands of Hungarian Jews was forcibly imposed by Nazi Germany, while in fact Horthy’s state machinery was actively involved in it.

[8] A noteworthy exception: the Speaker of the parliament, a Fidesz member, at one point publicly referred to the possibility of ”backing out” of the EU.

Thoughts in advance of the German and Russian visits to Budapest

Yesterday the Neue Zürcher Zeitung published an article about the forthcoming visits of Angela Merkel and Vladimir Putin to Budapest titled “Orbans Tanz auf zwei Hochzeiten,” indicating that Viktor Orbán will be able to have his cake and eat it too. He will remain a member in good standing of the European Union and will be a close friend of Russia at the same time. I, on the other hand, maintain that he will not be able to pull off that extraordinary feat. There are many signs that the Hungarian prime minister is already in retreat.

Let’s start with the Merkel visit. Hungarian and foreign observers have come up with all sorts of explanations for her trip, starting with the simplest one–that she could no longer postpone it. After all, she has not visited the Hungarian capital in the last five years, ever since Viktor Orbán’s Fidesz, which professes to be a Christian Democratic party, won a stunning victory in 2010. Her last trip took place in 2009, on the twentieth anniversary of the Hungarian opening of the Austro-Hungarian border for East German refugees, when the socialist-liberal government of Gordon Bajnai was still in power. If the purpose of the trip was to have a serious discussion about the Russian-Ukrainian crisis and Hungary’s role in it, Merkel’s five-hour stay, with very little face time with Viktor Orbán, would not suffice. She is coming because she promised to and because, according to a 1992 agreement between Hungary and Germany, she has to.

There are analysts who are convinced that Angela Merkel will not even mention the erosion of Hungarian democracy under Viktor Orbán’s regime, the systematic transformation of a fledgling democracy into an autocratic regime akin to the political setup that existed in Hungary between the two world wars. She has more pressing issues on her agenda: Greece, the sanctions against Russia, and the growth of the German anti-immigration movement–PEGIDA (Patriotische Europäer gegen die Islamisierung des Abendlandes / Patriotic Europeans Against the Islamization of the West), especially popular in the former East Germany. It is unlikely that Merkel will waste any time on the woes of Hungarian democracy. Her only aim is to make sure that Viktor Orbán stands by the extension of the sanctions. This hypothesis, in part at least, is outdated: Hungary obediently voted for the extension on January 29.

Others are more optimistic. They maintain that the trouble with Angela Merkel’s visit is that it seems to put a stamp of approval on the illiberal regime of Viktor Orbán. This is certainly how the Orbán government is portraying it. If Merkel says nothing about the state of democracy in Hungary, Orbán’s regime scores a victory. There is pressure on Merkel at home, however, to do something about the Hungarian situation. She has to give the appearance that her visit is something of a warning to Viktor Orbán.

There is some truth in this interpretation. In fact, there are signs that behind the scenes some “disciplinary measures” have already taken place. The successful negotiations with the leaders of  the RTL Group indicate that Orbán got the message: there will be consequences if the Hungarian government blatantly and illegally discriminates against a media outlet just because it doesn’t like RTL’s news broadcast. Orbán caved, and I for one am certain that he didn’t get much in return. I find it interesting that the official announcement of Merkel’s visit occurred very late, on January 28, the day when according to Népszava‘s information the Hungarian government agreed to a substantial reduction in the enormous tax it had levied on RTL Klub. Was this agreement the price, or part of the price, of Merkel’s visit?

Because that’s not all. In his regular Friday morning interview Orbán announced that the exorbitant tax levies on the banking sector will most likely be gradually reduced because the Hungarian economy has greatly improved. “If possible, the interests of the country and the businessmen must be reconciled,” said the man who until now had laid all the financial burdens of his erroneous economic policies on businesses, especially foreign ones.

There might be several reasons for Orbán’s cooperation in addition to German negotiations. One is that the Americans undoubtedly know more about the Hungarian mafia state and Viktor Orbán’s role in it than they let on, but the Hungarian prime minister doesn’t know how much they know. That must be a powerful incentive to stick with the countries that provide Hungary with economic aid and military shelter. Another consideration might be the effect of the sanctions and the sinking price of oil on the Russian economy, which makes close ties with Putin’s Russia a less desirable option than, let’s say, a year ago.

And that leads us to the Putin visit on February 17. It was almost a year ago, in March of 2014, that the United States and the European Union began applying sanctions against Russia. Although Hungary agreed to support the move, in August Viktor Orbán declared that “Europe shot itself in the foot,” meaning that the sanctions actually hurt only the West and did nothing to weaken the Russian economy. Just about this time, however, oil prices began falling. The combination of sanctions and falling energy prices has made the Russian economic situation close to desperate by now.

Orbán was initially very proud of what he considered to be the crowning achievements of his Russia policy: the Southern Stream, which would have brought gas to Hungary circumventing Ukraine, and the Russian loan for the extension of the Paks Nuclear Power Plant. Since then, Russia abandoned the Southern Stream project because of lack of funds, and many people think that the much heralded Paks deal is also in trouble. Thus, the rationale for close relations with Russia has more or less evaporated, which leaves Viktor Orbán in the unenviable position of suffering the ill effects of his overly cozy relation with Putin while reaping practically no benefits.

Depiction of the Trojan Horse at the Schlilemann Museum in Akershagen, Germany

Depiction of the Trojan Horse at the Schliemann Museum in Akershagen, Germany

Under these circumstances I doubt that the initiative for the Putin visit came from Budapest. It is no longer to Orbán’s benefit to make a lavish display of friendship with Russia. And indeed, the government is trying to downplay the importance of Putin’s visit, noting that it is only a working trip and not a state visit with the usual fanfare. For Putin, by contrast, it is an important trip at a time when nobody wants to have anything to do with him. Just think of the humiliation he suffered in Brisbane, Australia. He wants to demonstrate that he has at least one good friend  in the European Union.

Putin’s second reason for the trip, I suspect along with others, is to find out how much he can rely on Viktor Orbán. Will he deliver as promised? Or it was just talk? Perhaps Orbán oversold his usefulness to Putin and is turning out to be a useless ally from the Russian point of view. Last August Jan-Werner Müller wrote an article in Foreign Affairs titled “Moscow’s Trojan Horse: In Europe’s Ideological War, Hungary Picks Putinism.” Well, the Trojan Horse may be just an empty shell and the damage it can cause within the European Union little to none.

Signs of internal divisions within the Hungarian governing party

In the last few months, as the popularity of Fidesz has been steadily declining, signs of serious internal divisions within the party have been proliferating. Ever since November one opinion poll after the other has reported serious losses in popularity for both Viktor Orbán and his party. Fidesz still leads, but the parties on the left are gaining ground. In fact, for the first time, the number of voters favoring all the democratic opposition parties combined is slightly higher than that favoring Fidesz.

It was almost inevitable that Fidesz’s political leadership would start looking for explanations for the waning popularity. Of course, the most obvious target should be Viktor Orbán himself. After all, Fidesz is a monolithic party where, according to grumbling party leaders, all decisions are made by the prime minister, who is also the head of the party.

His confidants nowadays are not the grand old men of Fidesz but upstarts like Antal Rogán, János Lázár, or the mysterious Árpád Habony who allegedly has no position either in the party or in the government yet is privy to the most confidential information if not state secrets. The old Fidesz leaders who joined the party twenty-five years ago either left a long time ago or Viktor Orbán set them aside. The less important characters had to be satisfied with positions inside state companies or insignificant administrative offices; the more important ones were either given positions that have clout on paper only, for example János Áder and László Kövér, or were shipped off to Brussels. Zoltán Pokorni, who at one point was chairman of Fidesz, had to be satisfied with a humble district mayoralty.

Until last November Fidesz spoke more or less with one voice, the voice of Viktor Orbán. If there were doubting Thomases, they became convinced by the cleverly orchestrated elections that, after all, “Viktor was right.” In fact, he is a political genius who can overcome all obstacles and lead the party to victory not just for the next four or eight years but for a very long time. Now, however, it looks as if Orbán has lost his touch. Instead of being able to correct his mistakes, he piles new ones on top of earlier ones. Moreover, several times in the last few months he had to retreat, which must have shaken the confidence of his closest associates.

I suspect that we are still not at a point that we will hear open criticism of Viktor Orbán himself. Instead, the criticism is directed against the men around him. The first public quarrel occurred in December when Zoltán Pokorni said a few disapproving words about the extravagant lifestyle of János Lázár. Kövér chimed in, taking Pokorni’s side. It is a well known fact that Kövér is no friend of Lázár, who runs the government’s daily business, serving as de facto prime minister, while Orbán himself acts like its all-mighty president, moving effortlessly on the stage of world politics. The quarrel didn’t end there. Lázár shot back and told Kövér that “a political veteran should think twice before he attacks us out of personal resentment or for political gain because he not only weakens us but also weakens or even executes himself.” I guess in this instance “execution” means the end of this veteran’s political career. This is not an idle threat. When after the lost 2006 election Orbán found out that some of his political friends at a party had discussed the desirability of replacing him because of his mistaken election strategy, they were promptly sent into political exile. The most prominent victim was János Áder. More recently, Tibor Navracsics, who as minister of justice criticized the legislative practices introduced by the prime minister’s office, soon enough found himself in Brussels.

arrows

In January we learned that József Szájer and János Kövér also have their disagreements, primarily over Hungary’s relations with the European Union. Szájer is an old timer all right. He was one of the founders of Fidesz but, as opposed to the provincial Kövér, is now serving his third five-year term as MEP in Brussels. In his case, Brussels is not a political exile. He is still a very close associate of Orbán. In fact, Szájer’s wife is perhaps the most important person in the Hungarian judicial system today. In any case, the two old friends from college don’t see eye to eye on the European Union. Kövér belongs to the right wing of Fidesz, a Euro-skeptic who ordered the removal of the EU flag from the parliament building and instead put up a newly-designed flag of the Szeklers living in Romania. About three weeks ago Kövér in an interview expressed his dislike of the European Union and said that it might not be a bad idea to think about leaving. Szájer openly expressed his dissatisfaction with Kövér’s ill-considered statement in an interview on ATV.

Then came another open disagreement, this time between László L. Simon, undersecretary of János Lázár in the prime minister’s office, and Gergely Gulyás, the right-hand of László Kövér and head of a parliament commission dealing with legislative matters, who talked about the likelihood of modifying the law on freedom of assembly. This announcement was unfortunate. It looked as if the Orbán government was planning to restrict the current law and was thereby intending to limit the kinds of demonstrations that took place recently on the streets of Budapest. L. Simon immediately announced that the idea was Gulyás’s private opinion. The government has no intention of revisiting the law on assembly. A very wise move on the part of the government.

Then about ten days ago Zoltán Illés, earlier undersecretary in the ministry of agriculture in charge of the environment, decided to go public with his criticism of the Orbán government’s nonexistent environmental policies. Illés is a committed environmentalist and was useful to Viktor Orbán when Fidesz was in opposition as he attacked the socialist-liberal governments for their neglect of environmental issues. Illés was everywhere a tree was cut down. He organized demonstrations and blocked several projects because of environmental considerations. In 2010 he most likely saw himself as the next minister of the environment and must have been taken back when the ministry was abolished and he became only an undersecretary in the ministry of agriculture. But, as he explained recently, he still hoped that even in this position he could be effective. That turned out not to be the case. His position was stripped of practically everything that used to belong to the minister of the environment. Between 2010 and 2014, while in office, the formerly vocal Illés was quiet as a mouse for example when hundreds of trees were cut out overnight around the parliament building. Eventually he no longer could stand it. He was the only Fidesz member of parliament to vote against building a new reactor at the Paks nuclear power plant. That sealed his fate. Not only is he no longer an undersecretary, he didn’t even receive a cushy job. Now he “tells all” everywhere he has the opportunity.

In the last few days there have apparently been open disagreements between Lajos Kósa and Antal Rogán on immigration; between Zoltán Balog and Károly Czibere, his undersecretary, on the segregation of Roma children; between Antal Rogán and László Trócsányi, minister of justice, on the necessity of new legislation in defense of religions.

Finally, newspapers reported yesterday that János Bencsik, a Fidesz member of parliament, published a long critique of his party and the government on his own website.

The parrots are starting to learn words of their own.

The European Anti-Fraud Office is a bit slow: The case of the Heart of Budapest project

Well, we are back in Budapest’s District V, which is known by many names: Lipótváros (Leopoldstadt), Belváros (Downtown), or lately for a little political propaganda “The Heart of Budapest.” At least this was the name of the mega-project undertaken within the boundaries of the district that made the historic district mostly traffic-free and repaved the streets between Kálvin tér and Szabadság tér, stretching 1.7 km, with fancy cobble stones. Like everything else, the project was largely financed by the European Union.

It was Antal Rogán, the newly elected mayor of the district, who came up with the idea of revamping downtown Pest shortly after the municipal election of 2006. He convinced the City Council of Greater Budapest to apply to Brussels for a grant, and it seemed that at least on the surface the SZDSZ-MSZP city and the Fidesz district were of one mind. We mustn’t forget that at this time Antal Rogán was considered to be a moderate and reasonable man. Later the Fidesz media praised him as a truly remarkable Fidesz mayor who managed, despite the fact that the city of Budapest and the government were in SZDSZ-MSZP hands, to receive a huge sum of money for the development of his district. Well, the Heart of Budapest project really was impressive. A good portion of District V became something of a showcase.

The renovated Károly körút - Photo András Földes

The renovated Károly körút – Photo András Földes

As we know, Antal Rogán has had his share of his political trouble ever since Péter Juhász, who was Együtt’s candidate for mayor last October, decided to investigate shady real estate deals during Rogán’s tenure. I wrote about corruption in the district in December and again in January. Juhász, unlike most Hungarian politicians, doesn’t give up. Whether he will succeed in putting Rogán in jail remains to be seen.

What Rogán did not need was another scandal. But he’s under attack yet again, this time in connection with the Heart of Budapest project. The internet site vs.hu reported yesterday that OLAF, the European Anti-Fraud Office working under the aegis of the European Commission, found serious irregularities in connection with Rogán’s project. According to vs.hu, OLAF finished its investigation at the end of last year and called upon the Hungarian Chief Prosecutor’s Office to begin an investigation of the case. Naturally, OLAF’s findings were also sent to the European Commission. The Chief Prosecutor’s Office admitted that they received the documentation that supports OLAF’s case but said that “currently work is being done on the translation of the material.” Knowing the Chief Prosecutor’s Office, they will work on that translation for months if not years. Moreover, some opposition politicians learned that in the last few years the Chief Prosecutor’s Office received several dozen such complaints, but as far as we know Chief Prosecutor Péter Polt’s crew did nothing about them.

This is not the first time that questions have been raised about the project. At the end of 2012 OLAF found that not everything was in order. There was a good possibility that both District V and the city of Budapest would have to pay sizable fines: about 900 million forints each. The charge? The officials of the district and the city who were handling the bidding process demanded such unnecessary qualifications from the applicants that only one combined firm, Reneszánsz Kőfaragó Zrt and Bau Holding 2000, forming the Heart of Budapest Consortium, could possibly undertake the work. The bidding was theoretically open to foreign firms as well, but I doubt that much effort was put into finding non-Hungarian companies for the job.

What kinds of unreasonable demands did the authorities insist on? To qualify, a company had to have references for 1.2 billion forints worth of work on historic buildings even though the new project focused on repaving streets. There was absolutely no restoration of historic buildings. This ploy is commonly used in Hungary to make sure that the “right” company is the successful bidder. In Hungary 40% of all projects end up with a single bidder. Every time such a thing happens we can be pretty sure that corruption is not far away.

In 2012, when this story broke, Rogán and his deputy András Puskás, who has since left the district under the cloud of possible corruption, argued that there was nothing wrong with the project. It was done properly. The problem, they countered, was that the European Commission didn’t like the Orbán government and concocted this case to attack Viktor Orbán and his politics.

Now that OLAF finally got to the point of calling on the Chief Prosecutor, the district is trying to shift the blame to the current opposition. After all, the argument goes, the first phase of the project was finished in 2009 when Gordon Bajnai was prime minister. And Gordon Bajnai was present at the official opening. I guess that, according to the brilliant logic of the editorial offices of Magyar Nemzet, Bajnai had something to do with passing on the job to an earlier designated firm just because he cut the tricolor ribbon at the opening ceremony. For good measure, Magyar Nemzet added that Viktor Szigetvári, co-chair of Együtt and then Bajnai’s chief-of-staff, participated in the negotiations. Szigetvári calls the accusation a lie.

In addition, Magyar Nemzet blames the SZDSZ-MSZP administration of the city of Budapest. “All this happened during the era of Demszky-Hagyó-Steiner.” Pál Steiner was the whip of the MSZP caucus on the city council while Miklós Hagyó was the MSZP deputy mayor. Hagyó was later accused in a vast corruption case, which is still pending. The lurid details of the case tarnished MSZP and helped Fidesz coast to an overwhelming victory, resulting in a two-thirds majority in 2010.

OLAF has been investigating for the last six years. Right now, the Chief Prosecutor’s office is busily, or not so busily, translating. When do you think we will know exactly what happened? If you ask me, never.