Listening to Hungarian government propaganda: MTV and MR

Yesterday a newcomer to this blog posted a comment in which he said that he refuses to believe news reports that are broadcast on Klubrádió. In this particular instance, that 350,000 Hungarians work abroad and that this number constitutes 7.4% of the population between the ages of 18 and 49. That incredible closed-mindedness inspired me to do some research on the subject.

First, the news naturally didn’t originate with Klubrádió. The station relied on Magyar Távirati Iroda (MTI), the official Hungarian news agency, which since 2010 is no longer an independent organization but functions under government supervision. Also, while earlier news organizations had to pay for the wire service, since 2010 the Hungarian government “generously” provides the service free of charge. MTI thus has a monopoly; all news outlets rely either in large part or exclusively on MTI’s increasingly biased summaries.

I decided to take a look at how various media outlets reported the news of July 11, 2013, the day the Central Statistical Office (KSH) released two important items. The first dealt with the latest figures on living standards or more precisely on the situation of people who live at or below the subsistence level. A couple of hours later came the surprising news about the high numbers of Hungarians who work abroad.

The figures about the plight of more than half of the population who live in very modest circumstances or in outright poverty appeared in practically all publications. It was only the extent of the coverage that varied. I went to the website of MTI to find the original news release. Pro-government papers (Magyar Nemzet, Magyar Hírlap) copied the MTI summary without changing a word. That summary was brief indeed: 292 words. It is educational to take a look at the original release of KSH to see that MTI was especially loath to give any past figures that would have shown that the situation is getting worse and worse every year. The opposition papers for the most part were not satisfied with simple copying; they went to the original source and did their own summaries of KSH’s report.

When it comes to the 350,000 Hungarians working abroad, Magyar Nemzet and Magyar Hírlap decided not to include this particular MTI news report in their papers. I guess they thought that it would be bad for business for their highly nationalistic readership to be confronted with such depressing news. This morning, however, both papers ran lengthy articles about what Tibor Navracsics had to say in response to the news. Navracsics delivered a speech to a meeting of Fidelitas, Fidesz’s youth organization, in which he tried to cheer up his audience by pointing out that the trend of young men and women leaving the country “can be reversed.” The faithful Fidesz supporters who refuse to read any other papers might have been somewhat baffled about this mysterious “trend” they never heard of.

I took the trouble to read all the MTI releases for July 11 and noted those items I found most significant over and above the two reports of KSH. (1) György Surányi, former chairman of the Hungarian National Bank, and Attila Chickán, minister of economics in the first Orbán administration, announced that in fact the present Orbán government is not “doing better” than its predecessor. (The current Fidesz slogan is “Hungary is doing better.”) (2) The Orbán government allocated from the reserves 4 billion forints for higher education and 1 billion for sports. (3) Együtt 2014-PM at last managed to get registered. (4) MTI released a graph that showed that average teachers’ salaries have decreased since 2010. (5) Barroso will attend a conference in Warsaw where they will discuss the future of Europe. (6) A graph showed the deficit of the central government and the municipalities for the first six months of the year. (7) The Croatian prosecutors’ office asked its Hungarian counterpart to allow them to interrogate Zsolt Hernádi, CEO of MOL, who is suspected in a bribery case in Croatia. As we will see later, none of these items was discussed either on Magyar Rádió, the public radio station that can be heard everywhere in the country, or on MTV, the Hungarian public television station.

Source: bluntradio.org

Let me start with “Hiradó” (News) of MTV. Here all news is good news. (1) Inflation is low. Only 1.9%. (2) In the future 60% of EU subsidies will go to stimulate economic growth which will be impressive. (3) Small- and medium-size companies get more government assistance than at any time before. (4) An Irish company invested a billion forints in Szolnok. (5) The government signed several new strategic agreements with foreign companies. (6) At no time were government bonds as popular both at home and abroad as now. It shows that investors trust the Hungarian government’s economic policy. (7) At last teachers in parochial schools will get the same salary as teachers in state schools. (8) Sándor Burány (MSZP) claimed that Hungarians are poorer today than they were before. Fidesz answered that it is all the former governments’ fault. (9) Benedek Jávor (Együtt-PM) complained about the chaos with the newly introduced E-toll system but Fidesz assured him that all was well. (10) As for Hungarian culture in the world, the folk festival in Washington was a great success; 1.2 million Americans had the opportunity to learn something about Hungary and its culture. (11) The prime minister of  Luxembourg resigned. (12) It is the anniversary of the massacre at Srebrenica.

So, this is what apparently most Hungarians hear on MTV’s news. But Mária Vásárhelyi, a sociologist whose field is the media, claims that fewer and fewer people actually watch MTV’s news. The situation is different with Magyar Rádió. According to her, in some houses MR is on all day long; even if people don’t listen very carefully, some of the propaganda gets through.

Well, the menu is not very different on MR from what I heard on MTV. In its Krónika the same stories could be heard practically word for word, even in the same sequence as on Hiradó on MTV. At least on its 5:30 p.m. version. At 8:00 p.m. there was a slightly different set of news items highlighting the same success story. Viktor Orbán’s great plan for saving jobs worked beautifully: 720,000 jobs were saved. At this hour it seems that Hungarian news from the neighboring countries gets special treatment. There were a couple of news items from Romania and Serbia. By 10:00 p.m. there was a lot of talk about the success of Hungarian tourism: 20% more foreigners decided to spend their holidays in Hungary. These people start discovering other parts of the country, not just Lake Balaton. Hungarians seem to be better off too because more of them go on vacation. At least 10% more than last year.

And finally, I combed through the July 11 news items of Klubrádió. Here we have a more balanced account of the news. We hear the good and the bad. They mention the relatively low inflation rate and Varga’s boasting about the 720,000 saved jobs, but they also include the KSH reports and the Croatian prosecutors’ desire to talk to Hernádi.

After spending the whole morning listening to the news of MR and MTV I am not surprised that some media experts claim that by the 1980s even the Kádár regime’s news reporting was of higher quality and more balanced than what Hungarians get today in the so-called democratic Hungary.

Some good news for the Orbán government, but there are still many questions

Viktor Orbán received a couple of nice presents today for his fiftieth birthday. One was from the Hungarian Central Statistical Office (KSH) and the other from Olli Rehn, European Commissioner for Economic and Monetary Affairs and the Euro.

According to the Statistical Office, the unemployment rate ticked lower to 11.0% in the three months ending in April from 11.8% in the first quarter of 2013. On the surface this improvement seems both rapid and substantial. But, as Portfolio.hu points out, “The change in the number of employed shows the same strong fluctuating pattern as in the previous years. The main cause of the fluctuation is the year-end stoppage of public work schemes.”

 Another possible reason for the improving unemployment numbers (although this does not address the issue of seasonality and would take more time to be borne out) is that unemployment benefits run out quickly in Hungary. The Orbán government reduced eligibility for benefits to three months, the lowest perhaps in all of Europe. Whether these people simply drop out of the officially tracked work force after their benefits run out or find a job is hard to say, but we do know that the number of employed workers grew by 61,000 over the same period last year. Some of these people may have found part-time work paying below the minimum wage as employees of the public works program that began full-scale under the Orbán administration. Only a month ago, one of the undersecretaries of the Ministry of National Economy boasted about the very high number of people in the program: 300,000 this year as opposed to 261,000 last year. If his figures are correct, almost 65% of the recent job gains come from the public works program. These people don’t produce any real profit. In fact, they are a drag on the central budget–this year a projected 153.7 billion forints. So I think we should wait before passing final judgment on the employment figures.

The other piece of news came from Brussels in the early afternoon, and it was not much of a surprise to anyone. It has been clear for at least a week that it would be very difficult not to recommend lifting the excessive deficit procedure in Hungary’s case. Due to a series of tax hikes, mostly levies on businesses and banks that affected the population only indirectly, the government managed to decrease the deficit to under 3.0%. Naturally, the government considers this a major victory that vindicates Budapest’s economic policy.

Viktor Orbán had single-mindedly pursued the goal of getting out from under the excessive deficit procedure. Some people argue that he was acting out of fear of a cutoff of EU development funds. But there was never any serious threat of the country’s being deprived of funds because of its deficit, which pales in comparison to the deficits of some other European countries. I suspect that what Viktor Orbán really wanted was to stop the EU monitoring that went hand in hand with being under the excessive deficit procedure. After all, he backed away from IMF funding because they would have closely monitored the Hungarian economy. But, I fear, Viktor Orbán is mistaken. The number crunchers in Brussels will continue to monitor Hungarian economic data closely. Viktor Orbán won’t have a free hand. Hungary, being part of the EU, is expected to follow its advice. If it doesn’t, Hungary may find itself under the excessive deficit procedure once again. Such a possibility is not unheard of. After all, this is most likely what will happen to Malta.

Hungarian deficit between 2001 and 2014 / Ecostat, Népszava, graphics by Szilvia Kőszegi

Unfortunately, Hungary’s unorthodox economic policies aimed at lowering the budget deficit were costly to both the population and the economy. Trying to hide economic austerity from the general population, the government taxed businesses and banks to death and was unable to stave off an economic recession. Yes, the deficit is low at the moment, but how long can the government continue an economic policy that does not produce growth?

The Orbán government was also fixated on reducing the national debt, which was not higher than in most European countries. They confiscated 95% of all private pension funds, in part to lower the debt. Since then that enormous sum of money has evaporated. Some of it was absorbed into general funds and more than half of it went to the bottomless pit of the national debt burden. Because Viktor Orbán was unwilling to accept the terms of a low interest rate IMF loan, the country was forced to borrow at market rates. The sad result is that the Hungarian national debt is higher today than it was in 2010.

Yes, Hungary is off the hook for the time being, but Brussels made several recommendations and suggested specific steps the country should take to achieve sustainable economic growth.

The European Commission was critical of the Hungarian government for concentrating on the revenue side of the ledger.  They suggested restoring the former competence of the Fiscal Council and advocated a return to normal lending by decreasing the bank levies. They criticized the newly introduced flat tax which favors the rich and over-taxes the poor. They maintained that Hungary should concentrate on employment. Hungary has one of the lowest rates of labor market participation in the Union. They called the attention to the social situation that continues to worsen with 31% of the population at risk of poverty.

They suggested that the country “create a supportive business environment, in particular restore an attractive environment for foreign direct investors, by making the regulatory framework more stable and by fostering market competition. Ensure the prompt implementation of measures envisaged to reduce the administrative burden, improve competition in public procurement and take adequate measures to tackle corruption.”  They criticized the measures introduced in the field of education. As opposed to earlier years when fewer people were dropping out of school, this trend was reversed in 2011. They are concerned about the “ongoing education reform” in higher education. And finally they criticized the regulation of energy prices. In their opinion these regulations should be gradually phased out while “protecting the economically vulnerable.” Public transport should also be more cost efficient.

These are precisely the steps that the Orbán government doesn’t want to take. But if they do not follow this sound advice, it is unlikely that considerable economic growth can be achieved in the long run.