hungarian government

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.”

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Mária Schmidt is on the warpath again

Last summer I wrote at least five posts about Mária Schmidt, a historian of the Holocaust and director of the controversial House of Terror museum established during the first Orbán administration (1998-2002). Why is Mária Schmidt so important? Why is it necessary to spend time on a historian not held in high esteem by her colleagues? It is true that as a historian she would not deserve much attention, but as the chief adviser to Orbán Viktor on matters of modern Hungarian history her ideas cannot be ignored. I don’t think I exaggerate when I claim that Schmidt’s interpretation of German-Hungarian relations in the 1930s and the first half of the 1940s is crucial to understanding the Hungarian government’s reevaluation of the Hungarian Holocaust. The newly erected memorial to “all the victims” of the German occupation of Hungary on March 19, 1944 was a direct result of Mária Schmidt’s views on the period.

The other reason that I give her so much space is that every time she opens her mouth, or puts pen to paper, she says something outlandish. She begins radio and television interviews with syrupy sweetness and ends with shrill diatribes.

She has been lying low on Holocaust issues since last summer, most likely because it looks as if János Lázár, Viktor Orbán’s deputy, decided to remove her from the job of spearheading the creation of a new Holocaust museum, the House of Fates. The government realized that no compromise could be reached between the administration and the Jewish community as long as Schmidt was in charge of the project.

They are working on the building of the House of Fates but the concept is still missing

The construction of the House of Fates is proceeding apace

She refocused her attention on more recent events. Last month she wrote an essay on “geopolitical games” between Russia and the United States in which she didn’t spare the U.S. This was not a topic that excited too many people in Hungary.

But then came an exchange of letters between Schmidt and the office of the German chancellor that she made public on February 4. Since the publication of this exchange she has given two interviews, one to György Bolgár on Klubrádió and another to András Kovács of Origo.

Let’s start with a summary of Mária Schmidt’s letter, dated January 20, to Chancellor Angela Merkel. In it Schmidt invited Merkel while in Hungary to a reception in the House of Terror honoring “ordinary citizens who [in 1989] risked everything as opposed to the political leaders of the regime who were only following the lead of the heroic civilians.” Of course, she was talking about the East German refugees in Hungary. In addition, she expressed her hope that together they “could light a candle for the victims of communism.” The answer from Councilor Maximilian Spinner, on behalf of the chancellor, was brief and to the point: “Unfortunately, such a visit is impossible due the limited amount of time available.”

I have the feeling that even if Angela Merkel hadn’t had such a tight schedule she wouldn’t have wanted to be associated with the reception Mária Schmidt organized. The Germans ever since 1989 have repeatedly said how grateful they were to the Hungarian government at the time, and here is an event that belittles the role of the Németh government and Foreign Minister Gyula Horn, whom the Germans revere. And that government, whether Schmidt likes it or not, was the last government of the Kádár regime. By that time the dictatorship had mellowed to such an extent that it was not a brave, heroic act to help the East German refugees. Thousands and thousands of ordinary citizens lent a helping hand alongside the Hungarian government. Schmidt’s invitation was something of a trap, which I assume the Germans noticed and wanted to avoid.

Well, Schmidt was furious. She called Angela Merkel “the heartless chancellor.” She accused the Germans of never thanking these “brave civilians,” of thanking only the Hungarian government that existed “during the still functioning communist dictatorship.” Not only did Merkel not go but no “official representative” of Germany made an appearance when Schmidt gave memorial plaques to the few people she found worthy of the honor.

And then came the interview with Origo. She accused Merkel of “insolence,” which ought to “shock all well-meaning Germans.” According to Schmidt, “the chancellor obviously did not know what country she was visiting.” Otherwise, surely she would have wanted to meet ordinary citizens. She also found Merkel’s words about democracy, freedom of the press, and civic groups puzzling. In her opinion, Merkel talked like a “left-liberal” instead of a Christian Democrat.

Schmidt had a few not so kind words for the United States as well. According to her, M. André Goodfriend, the chargé d’affaires until the arrival of the new U.S. Ambassador Colleen Bell, “misunderstood his role and became enamored with his media appearances.” Everything has changed since the arrival of the ambassador, a claim that is most likely based on Colleen Bell’s frequent appearances at markets or social events, which of course may not indicate a policy change.

According to Schmidt, Hungary is a true ally of the United States and “it would be very sad if there were people in Washington who would like to disrupt that bond.” She is certain that Hungary would like to restore good relations between the two countries, but “we must not forget that the Hungarian nation is a proud one that does not like it if an American diplomat comes here and tells us how we should or should not remember our past,” a not too subtle reference to the memorial that on Viktor Orbán’s insistence was erected despite international protest, a memorial that falsifies the history of the Hungarian Holocaust.

Otherwise, at the moment Schmidt is organizing a conference, “Test of Bravery” (Bátorságpróba). The odd title seems to be lifted from a well-known picture book for children suffering from cancer. The conference will focus on the second Orbán government’s accomplishments between 2010 and 2014.

The House of Terror’s director is a tireless supporter of the government despite the recent slight she suffered when the much contested House of Fates projet was removed from her hands and taken over by the prime minister’s office. Her “concept” remained, however. It is, in the words of László Karsai, a Holocaust researcher, “two hundred pages of nothing.”

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.

The “miracle piano” and the Hungarian entrepreneurial spirit

January 22 was designated the Day of Hungarian Culture in 1989. Why January 22? Because it was on that day in 1823 that Ferenc Kölcsey (1790-1838) wrote the final version of his poem “Hymn” (Himnusz), which became the lyrics of the Hungarian national anthem composed by Ferenc Erkel (1810-1893) in 1844.

This year the event was used by employees of cultural organizations, libraries, archives, and related organizations to express their dissatisfaction with the Orbán government’s cultural policies. As we have discussed earlier, education and culture (unless, as the prime minister suggested, sports are part of culture) don’t enjoy governmental support. In fact, with each passing year cultural and educational institutions receive less money. The organizers gathered in front of the National Academy of Sciences, moved on to the Museum of Folklore, from where they went to the ministry of human resources to turn in a petition for higher wages and greater financial resources for education and culture. It was a nice idea, but only a few hundred people showed up. As formerly enthusiastic participants of these demonstrations now believe, too many small demonstrations are actually counterproductive.

The other event that was scheduled to coincide with the Day of Hungarian Culture was the long-awaited public unveiling of the “miracle piano,” a Hungarian invention described by Reuters as a “space-age piano.” A four-man team developed the new piano conceived by Gergely Bogányi, a Hungarian pianist. The piano bears his name. Some experts are enthusiastic about the sound of the “Boganyi” and there seems to be some interest in the Hungarian invention, but no buyer as yet. The piano was financed mostly by money coming from the European Union (New Széchenyi Terv) that gave the developers 217 million forints. The Hungarian National Bank contributed another 60 million. Apparently the four men put 75 million into the project from their own pockets.

Considering the financial involvement of the Hungarian government, it was predictable that Viktor Orbán would deliver a speech in the Ferenc Liszt Academy. In preparation for his arrival the police closed off two whole streets for a day and a half. The prime minister has always been paranoid, but lately his paranoia has become outright pathological.

In the speech he “with due modesty but with pride” pointed out the number of “cultural sanctuaries” that his government either built or renovated. What he neglected to mention was that all of the projects, like the Ferenc Liszt Academy where the gala performance took place, were financed with EU money. He described culture as “the thread that weaves together parts of the nation that drifted to or were torn away to different parts of the globe.” Somehow he must talk about the unification of the nation across borders. A space-age piano is good enough reason.

According to Orbán, “in this miracle piano there is everything that characterizes the Hungarians: ceaseless entrepreneurial spirit, inventiveness, a restlessness of the Hungarian spirit that strives for perfection and is never satisfied with what exists at the present.” I guess all that with “due modesty.”

The Boganyi piano

The Boganyi piano

Most of the speech was the usual fluff, but there were a couple of sentences that were particularly objectionable. He talked about “our greatest scientists, Ede Teller, Jenő Wigner or János Neumann who were born and went to school in Budapest but somehow (valahogy) could not make good use of their knowledge in Hungary.” Somehow? All three were of Jewish background and all three left Hungary in the 1920s. They ended up first in Germany and later, after Hitler’s rise to power, came to the United States. Their reasons for leaving Hungary were diverse, but they were a combination of the anti-Jewish numerus clausus law that severely limited the number of Jewish students in Hungarian universities, the general anti-Semitism prevalent in Hungary, and the superiority of German universities over Hungarian institutions. This constellation of reasons for young people to leave Hungary is not so different today. A lot of Hungarian Jews don’t feel at home in Orbán’s Hungary, and if a bright Hungarian student has the choice, he/she will choose a British, American, or German university over the domestic fare.

It is one thing to build or renovate concert halls, museums, or theaters, and another matter to have a cultural policy that fairly distributes resources among worthy recipients: writers, musicians, filmmakers, and artists. What is going on in Hungary is a “Kulturkampf” that aims at, on the one hand, rewriting the history of all facets of cultural endeavor and, on the other, creating a set of favored contemporary writers and artists. A good example of the latter is the establishment of a new academy of the arts that is now enshrined in the constitution itself. Its members are recruited from a group of artists in sympathy with the current regime and, as a gift for their loyalty, they receive generous annuities. As for the rewriting of the history of Hungarian literature, we have seen many cases where extreme right-wing writers of modest talents are dredged up from the period between the two world wars and elevated to the ranks of the Hungarian literary greats.

Just the other day I heard an incredible story from György Konrád, the well-known writer. He and his family live near Tapolca, a town in Veszprém County. Konrád often visits a small local library named after János Batsányi, a poet and philosopher, who was born in Tapolca in 1763. He was a radical who was an admirer of the French revolution and later of Napoleon, whom he followed to Paris. After the emperor’s fall he was taken back to Vienna and thrown into jail. He is considered to be one of the most radical representatives of the ideas of the Enlightenment in Hungary.

Well, a few days ago Konrád paid a visit to the library and what did he find? The library was renamed the Elemér Vass Library. Elemér Vass was a relatively minor painter about whom few people know anything, while everybody who ever went to high school can recite Batsányi’s warning to the Hungarian nobility:  “Cast your eyes toward Paris!” Perhaps it was the Enlightenment that bothered the local potentates. Hungarian libraries, it seems, are not meant to enlighten but to indoctrinate.

The United States as enemy #1

Bálint Ablonczy, a journalist working for Heti Válasz, a pro-Fidesz publication, wrote a few days ago that “the idea of permanent revolution is not working anymore.” And yet the two most important players on the Hungarian political scene, Prime Minister Viktor Orbán and János Lázár, his chief of staff, resolutely follow a strategy that is in Ablonczy’s opinion “no longer accepted by the voters.”

Most commentators agree that the prime minister is losing his sense of reality. They point out that the present course of action can result only in defeat and the further isolation of the country. After listening to Viktor Orbán’s latest outburst against the United States last night, I must join this chorus of critics. But before I go into some details of his warped view of the world, let me summarize his accusations against the United States, the country that, despite the fact that it is one of Hungary’s allies, is in his eyes solely responsible for his current political problems.

According to him, the United States’ allegation of corruption against certain Hungarian officials is nothing but “a cover story,” as “every thinking man knows.” The United States wants to gain leverage to increase its influence in the country. Currently a CIA operation is underway in Hungary. The United States is not only meddling in the internal affairs of the country but “is in fact an active political actor.” By this he means that the United States is organizing the demonstrations against his government. It’s trying to topple him.

The American interest in Eastern Europe is twofold. The Americans want to gain access to the energy market, and they want to have a commercial foothold in the region. The U.S. is “sore” because they wanted to build the Paks atomic power plant but Hungary chose Russia instead. And now Washington wants to drag Hungary into the Russian-Ukrainian conflict, but the Hungarian government wants to avoid a conflict that will lead to a new cold war. These charges are nonsense. The U.S. not sore because an American company didn’t get the contract to expand Paks, and it was not the United States that dragged Hungary into the Russian-Ukrainian conflict. Just the opposite. It was Viktor Orbán who positioned himself in the middle of the power play between Russia and the Western alliance.

By the way, after the appearance of the Lázár interview, I found only one reaction coming from an “unnamed official” of the State Department that was published by HVGThe State Department urges the Hungarian government to take into consideration “the domestic and foreign misgivings.” Washington would like “to continue a constructive dialogue … about those decisions that are related to the state of democracy and rule of law.” Surely, Orbán has no intention of following the Americans’ advice.

As a Hungarian cartoonist sees it

As a Hungarian cartoonist sees it

Turning back to Orbán’s interview, I want to highlight some points that weren’t picked up by the wire services. One was his emphasis on Hungary’s “innocence” and its “loneliness.” One could feel Orbán’s hurt when he said that “we have never harmed anyone” and yet we are badly treated. The attacks on us are unjustified. As for the “loneliness” theme, Orbán returned to the age-old Hungarian lament that “we are alone” in the world. There are the Slavs to the East and the “honest (derék)” Germans to the West. The only thing Hungarians have is the land “where they have always lived,” their language, and their culture.

Note the adjective “honest/derék” in front of “Germans.” We can see from this interview as well as Lázár’s that the new government strategy is to counterbalance the worsening U.S.-Hungarian relations with an increased reliance on Germany. Both men tried to portray Germany as a great friend of Russia. Orbán, who when talking about the United States declared that Hungary will not be a “colony,” two minutes later announced that Hungary is happily following the lead of Germany when it comes to foreign policy. It seems that Orbán is hoping that Germany will ride to its rescue and mediate between Washington and Budapest. After all, since Germany has had its problems with the U.S. and since it is such a good friend of Russia, Hungary should benefit from German mediation.

As far as the Hungarian political leadership knows, Angela Merkel is still planning to visit the Hungarian capital in February. Dávid Trencséni, a journalist for Stop, put it bluntly: Berlin is “Orbán’s last hope.”

Berlin may be Orbán’s last hope but it may also have been partly responsible for his woes with the U.S. He’s been able to get his way most of the time in the European Union, thanks in large part to the German Christian Democrats. Both Fidesz and the Christian Democrats belong to the European People’s Party, a party that stands by its members even when they behave outrageously. By contrast, Orbán has no political ally in the United States. Both Republicans and Democrats condemn Orbán’s illiberal state and his pro-Russian policies.

And finally a few oddities that run through both interviews. Hungary must be respected because it has a thousand-year-old history. Well, Egypt has a much longer one, so should I respect the current Egyptian government? Hungary in the past was successful only when it was independent. Well, actually the opposite is true. The period between 1867 and 1914 when the country was part of Austria-Hungary is considered to be the golden age of modern Hungarian history. Then there are claims that merit no comment. For instance, even Hungary’s enemies have to admit that Hungary has been a success story in the last five years. All the decisions Orbán’s government made were the right ones. Economically, every year was better than the one before. Hungary is a strong country that has weight and “will take an active part in this new era.” Well, maybe these claims do merit comment after all: Who unlocked the gates of the asylum?

János Lázár: “We want to remain Hungarians!”

With the permission of  The Budapest Beacon I’m republishing their English translation of an important interview with János Lázár, the “COO (chief operating officer)” of Hungary, that originally appeared in yesterday’s Magyar Hírlap, a far-right, pro-Fidesz daily. The interview contains  perhaps the most vituperative anti-American statements from a Fidesz politician to date. The language of this interview can be compared only to articles that appeared in party organs during the Rákosi and early Kádár periods.

Among other things, the United States is accused of raising a new Iron Curtain between Russia and Europe and of meddling in Hungarian domestic affairs. Fidesz politicians seem to be convinced that it is the United States that is behind the demonstrations. In fact, the country is accused of taking over the role of the opposition.

Yesterday the Hungarian government decided to begin diplomatic efforts to get the U.S. government to lift the American chargé d’affaire’s diplomatic immunity. The belief is spreading in Budapest that the Orbán government is planning to declare Goodfriend persona non grata. I do hope that someone can explain to Viktor Orbán the grave consequences of such a decision. The Orbán government is playing with fire.

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JÁNOS LÁZÁR: WE WANT TO REMAIN HUNGARIANS!

Translation of interview with Hungarian Chancellor János Lázár appearing in the 22 December 2014 issue of pro-government Magyar Hírlap under the title “Lázár János: Dolgozni kell, nem szabad elbizonytalanodni”.  (“János Lázár: One must work, not entertain doubts”).

How do you assess the work of the Information Authority (IH), more commonly known as the Hungarian foreign intelligence?

The Prime Minister stated in 2010 that Hungarian intelligence is the most important task in protecting our national independence.  A condition of the country’s sovereignty is decreasing our financial and energy independence as soon as possible.  The task of every Hungarian secret service is strengthening the country, and towards this goal increasing our self-determination.  The Prime Minister brought the collection of intelligence under the Office of the Prime Minister two years ago.  IH operations can work even more efficiently now that European matters have been transferred to us from the foreign ministry.

There are economic interest groups— the bank, tobacco, energy and multinational company lobbies—which, for example, are trying to use the European Commission to advance their economic interests.  Naturally, Hungary does not spy on its allies but it is better to be afraid than to be frightened.  The task of intelligence was changed at the time of the financial crisis so that it helps the government’s work, not only with collecting information but with financial and money market analysis as well.  We expect precise information rather than conspiracy theories from our intelligence agents.

In a country with a high ratio of state and household foreign exchange debt, we are more vulnerable to, and dependent on, foreign interests.  It is no surprise that in the past few years we have faced these kinds of attacks intended to undermine the government.  My job is to direct the attention of the intelligence service colleagues to the performance of these tasks.   For this the government provides the necessary material and human resources.  I hope the world view of those in service has also changed, thereby significantly decreasing Russian or western innervation (sic), and finally increases the commitment to our country’s independence.

Unfortunately, the American wire tapping and spying scandals of the past few years have made it clear that our allies do not respect our partners, and that there are no inhibitions or limits.  The WikiLeaks documents indicate that America also collects information about the personal lives of leading politicians in our country as well.

What stands behind the attempt to exert influence over Hungary?

America’s interests are not the same as Hungary’s.  The United States does not take into consideration the traditions of the region, the country’s traditions.  Unfortunately, they don’t want to understand Central European history and national characteristics.  Naturally, there exist influential United States interest groups as well with which we do not agree on matters of fundamental questions of values.  This world violently, and with money, spreads its convictions such as disregard for the fact that, irrespective of their political proclivities, two-thirds of Hungarians understand a family to refer to the relationship between a man and a woman, and give them the right to raise children.

What is the stronger viewpoint for the Americans, exercising pressure for political or economic interests?

Both.  In the future America will change from being an importer to being an exporter of gas thanks to the mining of shale gas, for which it must create a market.  We can discuss this, but I am certain that the use of power politics is not a suitable method for securing markets.  Our point of view is unequivocal: Hungary is not for sale.  Neither for the Russians nor for the Americans.  We will purchase energy from whoever sells it cheaply and guarantees that it arrives to use as well.

However, we are a small market.  It is not sure that this is the only reason we became an important terrain to the United States.

Unfortunately, there is no economic growth in the European Union, and for this reason the region of Central Europe has become more valuable.  Our area has economic potential, from here it is possible to strengthen the western part of the continent as well.  A warlike situation has developed between the United States and Russia, and the Americans want to create a new iron curtain on Russia’s border.  We are starting from the basic thesis formulated by German chancellor Helmut Kohl and French president Francois Mitterrand:  Europe needs the Russians.   The war and Russia’s economic collapse has unforeseeable consequences for Europe and Hungary.  We are going to pay a high price for it.  In the midst of the Russian-Ukrainian crisis we should not forget either that more than 100,000 Hungarians are living in Karpátalja (Carpatho-Ukraine), a substantial number of which are Hungarian citizens as well.  The most important thing for the government is to protect them as well.

Do you also believe that the Americans are behind the Autumn demonstrations?

The demonstrations are proof that the right to the freedom of expression exists in Hungary.  The demonstrations are as though the American embassy had assumed the role of the Hungarian political opposition.  It might appear to some as though they gave up on the opposition parties ever winning the confidence of the Hungarians, and for this reason they have risen to the task of leading the dissatisfied.  They express opinions on matters not customary for diplomats.  They want to tell us how to behave, what to think about the world.  And they tell us how we should live.  The credibility of the United States has been called into question by the fact that the American spokesman André Goodfriend is either unable or unwilling to tell public opinion why six Hungarian citizens were banned from entering the United States.  Americans should respect Hungary’s thousand-year history, traditions, which cannot be changed through the use of outside force, pressure.  Hungarians do not want to be Americans, Germans or Russians.  We want to remain Hungarians!

But now once again we are forced into a swing policy.  How can this be continued successfully?

The struggle to preserve our identity and independence has characterized our history.  Once again we find ourselves facing such a situation.  I am convinced that the Hungarian opposition parties will not betray our country and assist the Americans in their efforts.  It is not by chance that the American embassy has taken politics to the street, and embolden the organizers and participants.

Goodfriend aside, didn’t the government err in a number of issues giving birth to social discontent?

After the local elections in October the period of governance started.  We never claimed to be infallible, or that we never make mistakes.  We received a two-thirds mandate from the voters to build an independent, strong Hungary, and not break ranks under the pressure of domestic or international interests.

Fidesz is living high off the hog (urizál), and some of the main criticism has concerned you.

It is obvious that young members of Fidesz living high off the hog is a well-constructed political campaign on the part of the opposition and the press.  They want to create an image of us as the party of the rich and which only supports the rich.  That’s a lie!  We introduced the free meals at kindergarten. We were the ones who offered government subsidies to those buying used flats, who continuously raise the minimum wage, who drastically decreased household utility costs, who increased the wages of teachers, and executed an increase in salaries of health and law enforcement workers.

As a result of our economic policies, inflation has disappeared, which the left-wing politicians and intellectuals always said was a tax on the poor.  In addition to all this, we are helping the most vulnerable social strata, those with FX loans:  They will see the first half of 2015 that their monthly payments decrease 25 percent or 30 percent.  And we’re the party of the rich?  Our steps have created opportunities for social inclusion for the poorest.

But in spite of everything it seems that within your own party people are upset that you bought a flat for your young son, or that you have a watch costing many hundreds of thousands of forints.

I hope they don’t want to say that who saves for his children’s future is acting like a lord.  I know there are many who are not able to do this, and that is why I am working, so that they get an opportunity for this.  At the same time in my city the normal order of life is that people support their children to the best of their ability, and try to provide for their future.   In a civil society this cannot be cause for shame but rather virtue.  Let’s see things clearly.  Today there is a political campaign afoot built on jealousy organized by the opposition that involves accusing everyone of corruption and living high off the hog, especially the younger politicians who are in power.  They are doing that with me, those who for the past 25 years look down on Hungarian reality from the homes in the hills of Buda, while I had to struggle on two occasions to win the confidence of a poor provincial part of the country.  How can anyone imagine that I could have won the confidence of those living in poverty and those in need of help if I considered myself exception or looked down on them?  In politics there can only be one answer to this accusation, this campaign to discredit us, this character assassination: total unity within Fidesz.

What can you do against the fall in your popularity?

Decisions come with disputes and consequences.  The current government won’t let up even though it has harmed the interest of a good many groups.  The interest groups behind the press use journalists to mess with the people.  That is what is happening at RTL Klub, whose owner, the German Bertelsmann group, suffered a serious financial loss as a result of the advertising tax.  This group includes a number of oligarchs as well who are not able to access the state’s resources, and that is why they dictate magical questions to journalists who are dependent on them for their existence.  Let’s not forget either that from American money Romanian investigative journalists are training the colleagues of certain internet newspapers, while I know, and this is just part of the legend, it is as though this, too, is happening within the framework of the American operation.

The only question is whether the loss in popularity becomes a tendency, a continuous fall, or whether we’re talking about a wave which happens to be standing at the bottom right now.

We musn’t become uncertain.  We need to work!  If Viktor Orbán had become uncertain in 2011-12-13, then we would not have won the election in 2014.   Then there were moments when Fidesz was even less popular than it currently is.  We didn’t wet ourselves and we didn’t hide. We waded into the fight, picked up the glove, and in the end we won.  Winning back trust after losing popularity means even more work now than before.  We had to struggle for three years for the country, which was threatened by financial collapse.  Now, economically speaking we have risen ourselves up to be among the three best-performing countries in the EU.  There is no western analysis that does not acknowledge our economic results, we, however, fall into the mistake of entertaining doubts.  There is no reason for this.  We are on a good path.   We don’t have to be afraid.  We have to work!

The decrease in household utility costs was the Fidesz panacea during the first cycle.  What is it you want to win over voters with now?

We continue to step in the direction of decreasing the cost of utility to the economy and the state.  We are decreasing court fees and we want to provide more services, all of this in a transparent manner.  We will do everything so that economic actors, especially industry, can obtain cheap electricity.  The government’s goal is for us to be the strongest country in the region.  In the interest of improving economic competitiveness we are going to reform technical training, improve the educational system and modernize the country.   European Union taxpayers are providing enormous material support for this. A strong state is needed.  A decrease in bureaucracy on the other hand increases competitiveness.  There will be more debates on this, but an efficient, cheap and well-functioning state is worth a political fight.

How many positions will be eliminated over the course of decreasing bureaucracy?

There are 198 prefectures (járás) in the country.  By the end of 2015 we will create 260 government windows.  The prefecture structure works well, it is close to the people.  By contrast 925,000 people work in state administration, while at the same time four million pay taxes.  Three million taxpayers maintain the current bureaucracy.  Furthermore, this is a reverse pyramid:  the higher we go, the more workers there are.   There are two bosses for every worker who meets with citizens and customers.  This is unacceptable.  Today for example there are 3,500 directors for 26,000 government office employees.   This cannot be called reasonable.  For this reason there is no point in talking about how many should be dismissed, because there are areas that need to be downsized and there are ones where it is necessary to hire people.   It is the job of the state to serve the people, which is why we need to deal with matters that interest the voters, and which improves the quality of their lives, like strengthening the system of local practitioners, or preventative medicine.  Or whether for social security somebody who regularly goes for a screening test represents the same risk as someone who does not.  How can the state motivate someone to deal with sickness through prevention and preliminary control?   I could cite examples of public transportation as well for which we need to use our time, energy and trust.

When will the restructuring of public transportation start?  What changes should travelers expect?

We want to organize state services on the level of prefectures, and in this way we are modifying the health education centers.   Many governments have undertaken the reform of health, education and social systems, but no one has ever reconciled this with a transportation map of Hungary.  We would like to achieve when talking about health reform that we also discuss how patients get to a given hospital.  There are places where it is necessary to reorganize the trains and the bus services, but there are also parts of the country where it is not possible to use public transportation, where it is only possible to get to a treatment center by car.   We have to change the practice by which Volán (the national bus company) has ignored the needs of the traveling public for years when preparing schedules.  We need to organize a unified, country-public transportation system in which train and bus schedules are harmonized.  It is outrageous that twenty-five years after the system change there are still unresolved issues.

It is as though you are not speaking as a minister but still as a mayor.

If you you see it like that, then that is a compliment.  The Prime Minister expects me to deal with these matters.  I do this with the enthusiasm and vehemence characteristic of me as a mayor.  I look for solutions because I learned over the past 15 years that you can neither govern a society without people nor against people.   My style is too fast or too determined for some people.  I am convinced that it is only possible to serve the country’s interest with this kind of purposeful politics and a lot of work.

Reference:

http://magyarhirlap.hu/cikk/12905/Lazar_Janos_Dolgozni_kell_nem_szabad__elbizonytalanodni#sthash.6kFhYKaZ.dpuf

The first state-owned Hungarian bank is already in trouble

Great interest preceded a press conference held jointly by Prime Minister Viktor Orbán and György Matolcsy, governor of the Hungarian National Bank (HNB), this morning. What was so important that these two men would have to appear together in public? It had to be something momentous. Well, it was. The newly “nationalized” Magyar Külkereskedemi Bank (MKB) is in serious trouble and the Hungarian National Bank will assume ownership of it and prop it up.

But let’s start at the beginning. The owner of MKB was the Bayerische Landesbank, a Bavarian state-owned bank, which according to a 2012 decision of the European Commission had to give up ownership of its Hungarian affiliate. That decision was in accord with the Orbán government’s wishes because it is Viktor Orbán’s belief that the majority of banks in Hungary must be in Hungarian hands. Negotiations began back in 2012, but the two sides couldn’t agree on a price. At that point the Hungarian government was offering 100 million euros, which BayernLB found unacceptably low because shortly before the Bavarian bank had to sink 300 billion forints into its Hungarian affiliate. Well, by the summer of 2014 MKB was in the red, so the Hungarian government managed to buy the bank for 55 million euros. Moreover, the Bayerische Landesbank was obligated to give another 270 million euros to MKB. This money was considered to be sufficient to cover possible losses over the next few months. At that point government officials were sure that the bank would be profitable by 2016 “at the latest.” They added that the new owner, i.e. the Hungarian state, would not need to provide any additional capital and therefore “the reorganization of MKB will not burden either the state or the taxpayers.” Three months later we learn that MKB’s finances are most likely in shambles.

What happened between September and December? According to one theory, MKB’s troubles are the result of the government decision to force banks to exchange all mortgages in foreign currencies for forint-based ones. That means a hit of about 25% to the banks’ outstanding mortgages. Of course, all banks will incur losses as a result of this government decision, but the private banks will have to take care of their losses themselves. Presumably they have sufficient reserves. In the case of the newly nationalized MKB, on the other hand, it will be the Hungarian government’s problem. And since the Hungarian government’s coffers are pretty much empty, Viktor Orbán turned to Matolcsy and most likely forced him to come up with 300 billion forints to save MKB.

bailout

This rather unusual step was naturally presented to the public in the best light possible. Instead of telling the truth about the financial troubles of the newly acquired bank, the Hungarian public was told that “the government and the Hungarian National Bank agree that [MKB] must become one of the strongest banks of the country.” Thus they implied that the 300 billion forints was not being spent to save the bank from collapse but was necessary seed money to make this bank the best in Hungary. Viktor Orbán stressed that since “the consolidation of MKB will be done by the Hungarian National Bank it will not cost anything to the budget or the Hungarian taxpayers.” Of course, this is a brazen lie because money at the Hungarian central bank is in fact public money.

According to napi.hu, an internet site formed by former journalists of Napi Gazdaság after it was purchased by Századvég, one reason for passing the bank bailout on to the HNB is that this way the government can avoid parliamentary oversight. That may be, but it is unlikely. Orbán does not have to worry about the parliament and its alleged oversight. However, Napi.hu is most likely right when it finds the whole story suspect. After all, before the purchase it was the National Bank that vetted the bank and found everything in order. On the other hand, János Lázár in an interview that appeared in today’s Figyelő contends that MKB was a badly run bank that was “stolen blind” by unnamed persons. Matolcsy now claims that even before the purchase the Hungarian government was aware that the bank’s portfolio “will have to be cleaned.” So, which is the true description of the bank’s financial health? Is it possible that by exaggerating MKB’s losses more money can be siphoned off from the MNB’s reserves for something other than the “consolidation” of MKB?

Both men emphasized the “reorganization” aspect of the deal and said practically nothing about the bank’s financial troubles. They painted a rosy picture of the bank, which after “a 12-18 month reorganization period will be the best bank of our country.” Here Matolcsy admitted that although the bank has an excellent clientele, the percentage of non-performing mortgages is very high. But once the problems are solved MKB will be the “first fair bank” of the country. There has been a lot of talk lately about “fair banks,” which would function under more stringent scrutiny that would provide better protection to consumers.

The Hungarian National Bank announced today’s decision in the following terms: “Following the decisions by the Financial Stability Board, the MNB [Magyar Nemzeti Bank/Hungarian National Bank] has today taken control over MKB Bank and will reorganize the credit institution, including its subsidiaries.” It is worth noting that the press release emphasizes that “the move has taken place within the legal framework provided by European Union Directives and its responsibilities under Hungarian law.” Or again, a little later: “In accordance with European Union Directives and harmonized Hungarian regulations, the MNB will retain control over MKB Group temporarily (probably for a period of maximum one year).” I always become a tad suspicious when I hear from Hungarian officials that the move they just made is in accordance with EU laws. It usually turns out that it is not.

And what is the long-term future of this new nationalized bank? After the state sinks billions of taxpayer money into it, they plan to privatize it. Most likely on the cheap to friends of Fidesz.