The Orbán government’s latest “unorthodox solution”: A unique toll system

The Hungarian public is fixated on everything related to cars and driving, especially when it’s a question of money. Announcements about gasoline prices are daily fare in Hungary. If the price of gasoline goes up or down a couple of forints, it’s big news. Hungary is a poor country, we must not forget. Perhaps the most serious crisis since the change of regime occurred when it was announced that gasoline prices would have to be raised substantially. A blockade of all roads nationwide by taxi drivers paralyzed the country for three days and forced a government retreat.

Therefore it’s mighty strange that the Orbán government, already under considerable domestic and foreign pressure, decided to introduce a new toll system–and a badly designed one at that, which is bound to encounter serious opposition.

The system is geographically based. Each county, and there are nineteen of them in Hungary, is a separate toll unit. A driver who plans to drive on a toll road but strictly within the confines of his county need purchase only a single “matrica/vignette.” A few decades ago that might have been reasonable. A trip from Pécs to Harkány was considered to be quite a journey, and going to Hosszúhetény was an outright adventure. But these days, even with lower gasoline prices, people with cars are a lot more mobile.

The maps the government provided to make car owners’ lives easier are confusing. Some of them even had mistakes. If I figure it right, a person driving from Budapest to Pécs on the relatively new superhighway will need four matricas. Admittedly, the new county matricas are a great deal cheaper (5,000 Ft. each) than the former pass that was good for the whole country at 42,980 Ft/year. But what a hassle to figure out what counties you’re going through each time you plan a trip and which passes you’ll have to buy before you venture outside your own county. Even worse, think about those occasions when you have to get somewhere quickly–a family illness, a business emergency, the funeral of a colleague. You don’t just gas up the car and go. You also have to make sure you have the appropriate passes.

Let’s take a not too far-fetched example. A businessman who travels frequently from Pécs to Budapest will have to buy three or four matricas. And let’s say his family also wants to visit an aunt in Somogy or in Zala. The expenses start adding up.

The suspicion is that the government eventually wants to stop issuing those matricas that are good for a limited period of time. They are handy when the family goes on holiday to Lake Balaton or the Mátra Mountains. For ten days they pay only 2,975 Ft.; for a month, 4,789 Ft.

Drivers had to purchase their matricas by January 1, but as of December 29 no matricas were yet available. The new system was introduced in a great hurry without adequate preparation, as even Gergely Gulyás, the honey-tongued Fidesz politician, had to admit. By Friday (January 2) the computer system handling the issuance of matricas at gas stations crashed. There were long lines of people standing in the cold and rain in front of the headquarters of the office that takes care of the country’s roads. Purchasing passes online was not any easier because the site couldn’t handle the traffic.

And confusion reigns. Csaba Hende, the minister of defense and a member of parliament for Vas County, is furious. Based on the information he received, he promised his constituents that M86, a road between Szombathely and Vát, was going to be toll free. Came the surprise the following day: anyone using this new road will have to get a county matrica.

There are bits and pieces of roads–because this is what we are talking about–where the introduction of tolls makes no sense. Perhaps the most egregious example is the road to the Budapest Airport. A single trip a year to and from the airport would require a Budapester to buy a county matrica.

The attached map gives some idea of what I’m talking about. As you can see, M1 and M0 serve a very important function: to save Budapest from heavy thru traffic, mainly the thousands and thousands of trucks that cross the country toward the north, the east, and the south. It is hard not to notice that certain parts of a single highway are free while other parts are toll roads. The reason is that those sections marked in green were built with EU support, for the specific purpose of ridding Budapest of the heavy truck traffic that is environmentally harmful. The European Union demanded that these roads remain toll free. Well, on the map they are marked free, but the roads leading to these free sections are toll roads, so, contrary to EU intentions, truckers don’t get a free ride around Budapest. You may ask what the orange-colored sections signify. These three short sections are still within the limits of Pest County, but if you drive onto them, you must have a county matrica for Fejér County in the case of M1 and M7 or Nógrád County in the case of M3. The distances are small. The trip from Törökbálint to Pusztazámor, for instance, is only 17.3 km or 10.7 miles.

A civic group that already blocked the M1 and M7 superhighways for a minute in December is threatening the government with an ultimatum. They now promise a total blockade of all roads if the government does not withdraw the new county toll system by the end of February. They will also demand the resignation of the Orbán government. The organizer is Zoltán Büki, a businessman and Együtt-PM activist in the county of Nógrád.

László Bogdán, the Roma miracle worker of Cserdi

The support of the three opposition parties for Albert Pásztor, former police chief of Miskolc, as the city’s mayoral hopeful caused a huge political storm which still hasn’t subsided. Representatives of the Hungarian liberal intelligentsia or the intellectual elite, as Hungarians like to call this group, have been up in arms. How could these parties ever support a man who five years ago showed himself to be a racist?

Actually, the real target of their ire is the Demokratikus Koalíció. Since the central leadership of Együtt-PM distanced itself from the party’s local representative in Miskolc, critics left Együtt-PM more or less alone. They didn’t bother themselves with MSZP either because, as some of them admit, they don’t have great expectations of the socialists. After all, the party led by Attila Mesterházy, echoing Fidesz, endorsed “law and order” as an answer to society’s ills. DK is the only party that had consistently stood for the rights of all minorities. Its members and voters, all polls indicate, are the least prejudiced against foreigners, Gypsies, Jews, and gays. The intellectual elite expected more from Ferenc Gyurcsány’s party. How could it support a racist?

And here we are in trouble because, as I know from personal experience in private debates with friends and acquaintances, we cannot even agree on what racism is. There are people who think that mentioning the ethnic origin of a person already indicates racist tendencies. Thus, when Albert Pásztor the other day announced that he will treat everybody the same without “regard to origin,” some people cried foul. He shouldn’t have mentioned people’s ethnic origins at all. And yet there are a large number of policemen who are truly racists and who don’t apply the same standards when dealing with Gypsies and non-Gypsies. So, if Pásztor wants to treat everyone equally, this should be considered a step in the right direction.

Some people are reluctant to talk about some of the serious problems that crop up between Roma and non-Roma. But is it racism to talk about the difficulties that exist between the majority and the minority cultures? I guess it depends on the source. One can detect the attitude of the speaker easily enough. Criticism can be well-meaning or hateful.

And what should we do with a Gypsy who passionately wants to change the situation of his fellow men and women but who at the same time is very critical of the majority of the Roma today. I am thinking of László Bogdán, the mayor of Cserdi, a village that lies between Bükkösd and Szentlőrinc in Baranya County.

Bogdán is a man in his late forties who became the mayor of Cserdi about nine years ago. He has transformed the heavily Roma village. How did he do it? The change didn’t come overnight, but by now his accomplishments are known as “the cserdi csoda” (the miracle of Cserdi). When he became mayor, Cserdi was riddled with petty crimes. On the average 200 a year. Today, there are only two or three. Unemployment was extraordinarily high, just in all Baranya villages with large Roma populations. Today, anyone who wants to work can.

László Bogdán (in the middle) is visiting Duisburg, Germany

Bogdán was born in great poverty. He told Olga Kálmán the other day on ATV that he was thirteen years old when he finally had a pair of shoes of his own. Thirty years ago he got a job at a multinational company, cleaning the yard of the factory. Then one day they needed someone to pack the factory’s products. He kept going up and up until he was heading a department. Why he left his cushy job I have no idea, but he decided to run for parliament. When he lost, he settled for being the mayor of Cserdi, his birthplace.

Cserdi by now owns a fair sized forest the residents themselves established. They have 3,500 square meters of green houses, and they sell their produce in Pécs. They even had extra to give away to poor people in Budapest. The village owns a house on Lake Balaton. They fixed up most of the houses in the village. Bathrooms were installed in some of the Roma houses that had not known such a luxury. This summer Cserdi organized a summer school for the children. All this is an incredible accomplishment.

And yet Bogdán is a controversial man because of his rather draconian methods of dealing with his workers. He expects excellence, punctuality, and very hard work. And he is harsh with those who don’t perform. If one of the public workers doesn’t show up on time, he is “punished.” He has to read aloud from Micimackó ( Winnie the Pooh) to his fellow workers. He took some of the young people to a jail in Pécs so they could see what is waiting for them if they end up there.

Is Bogdán’s method more effective than some of the others that are being tried at a few places–very few places–in the country? I really don’t know, but I was impressed by the man. He is intelligent and very outspoken. For instance, if it depended on him, he would abolish the whole system of Roma self-government since he believes it does more harm than good. Many of the leaders, as he put it, are barely literate, and their aggressive behavior only alienates the majority population.

László Bogdán’s interview with Olga Kálmán / Egyenes beszéd / ATV

I have no idea whether Bogdán is right. But let’s go back to my pondering about who is racist and who is not. Is Bogdán a racist because he is more critical of the Roma community than most non-Roma? Is it racist to say, as he does, that Gypsies “must learn how to behave”? These are very difficult questions.

We know that the great divide between Roma and non-Roma Hungarians must be minimized. And this means that both sides have to change. The majority population will have to shed its incredible prejudice while the minority must be given the opportunity to achieve a higher economic and social status. But it is hellishly difficult to find the right way to this goal.

Official announcements on the fate of the Jews in Pécs, 1944

A few weeks ago I received a newly published book entitled Kötéltánc (Rope walking) by Sándor Krassó, a Holocaust survivor from Pécs. It is not a work of a professional historian but of an eyewitness, not a comprehensive history of the fate of the Pécs Jewish community but snippets from the year 1944. I managed to identify a few people who appear in the book, among them a high school classmate of my father and the woman who had an elegant children’s clothing store with whom I had quite a dispute over the winter coat I was supposed to get.

Perhaps the most moving part of the book was the list of official announcements that appeared in the local paper, Dunántúl, between March 23 and July 6, 1944, the day the Jewish inhabitants of the city and some smaller towns nearby, about 6,000 people in all, were led to the main railroad station to be sent to Auschwitz. The Pécs Jewish community had been gathered into the ghetto on May 6, which was sealed on May 21. I don’t think I have to add anything to these terse announcements. They speak for themselves. They also happen to be relevant to our discussion about the nature of the Horthy regime’s final days.

March 31: “Jewish households cannot employ Christian servants. … Jewish engineers, actors, lawyers must be removed from the professional associations … From April 5 on all Jews over the age of six must wear on the left side of their coats a canary-yellow six-pointed star.”

April 1: “László Endre, administrative undersecretary of the Ministry of Interior, told the reporters of Esti Újság that the government decrees are only the beginning of the final solution of the Jewish question. In the opinion of the Hungarian nation the Jewry is an undesirable element from moral, intellectual, and physical points of view. We must seek a solution that would exclude the Jewry from the life of the Hungarian nation.”

April 6: “On Wednesday the cabinet made the decision to limit the free movement of Jews within the country.”

April 9: “Jews by April 10 must report the details of their radios by registered mail.”

April 15: “A Jew must declare all his assets on official forms. His assets cannot be sold, given to someone else, or pawned.  He must separately declare real estate. A Jew cannot own stocks and cannot have more than 3,000 pengős in cash. Failure to follow this order may mean six months of incarceration.”

April 18: “All Jewish white-collar employees must be dismissed.”

April 19: “Ten people were charged for failure to wear the yellow star… one of them was interned.”

April 21: “All Jewish merchants must shut down their stores.”

April 23: “Jews can receive 300 grams of oil and 100 grams of beef or horse meat per month.”

April 25: “Dismissed Jewish clerks cannot be employed by the same firm even as laborers.”

April 27: “Jews cannot purchase lard.”

April 30: “All Jews must turn in their bicycles to the Pécs police station within twenty-four hours.”

May 4: “Within three days Jews must turn in their musical instruments and pieces of art.. .. For example, pianos, violins, records, paintings, statues, ceramics.”

May 6: [The authorities designated a certain part of town as the ghetto.] “Each room housed five people…. Out of the twenty Jewish doctors in town, five moved into the ghetto.”

Source: http://www.vasutallamasok.hu / The Pécs Railroad Station 

May 10: “Jews cannot take any valuables into the ghetto… They are allowed to take 50 kg total including bedding … Pécs Jews turned in 38 tons of lard, two tons of goose fat, and 60 kg of smoked meat. … Their radios must be turned in on May 11 and 12.”

May 12: “The government commissioner in charge of the press ordered all forbidden Jewish books to be collected for 5 pengős per ton.” [including works by such authors as Heinrich Heine, Martin Buber, Stephan Zweig, and, among Hungarians, Ferenc Molnár, Frigyes Karinthy, and Sándor Bródy]

May 18: “The City of Pécs offers for sale Angora rabbits turned in by the Jews.” [On the same day there were four suicides by Jewish men and women.]

May 20:  “The Pécs police authorities suspect that Jews are giving their jewelry and gold to Christians for safekeeping. All valuables of Jews belong to the state. Christians who harbor such goods will be severely punished. They can be interned.”

May 21: “No Jew’s book can be published…. Tens of thousands of Jewish books will be reduced to pulp…. We are making a reality of what Ottokár Prohászka and Lajos Méhely demanded.”

June 11: “1,200 claims were received for Jewish houses and apartments.”

July 2: “The Jewish ghetto will be closed. The Christian families can move back to their old apartments shortly.”

July 6: [the day Pécs  Jews boarded the box cars] “The ghetto is empty.”

Mass exodus from villages in Baranya County, Hungary

Hungary is witnessing a steady flow of emigrants. Admittedly, one could counter that it is incorrect to call those who seek work abroad emigrants because “to emigrate” means “to leave one country or region to settle in another.” One could argue that these people don’t plan to live abroad for good. However, there is a very good likelihood that people who spend a number of years in another country, establish a career for themselves, make new non-Hungarian friends, perhaps even marry local men or women will not return to their country of birth. A good example of that kind of emigration was the mass exodus of Hungarian citizens, especially from the Slovak-inhabited counties of northeastern Hungary, who left for the United States in the 1880s and 1890s in order to make enough money to return home and live in relative comfort. Most of them never saw Hungary again.

We know that at least 330,000 Hungarians now work abroad. I suspect that most of these people are from larger cities and from regions adjacent to the Austrian border. But today I read a fascinating report about the poverty-stricken south of the County of Baranya which has been witnessing “emigration fever.” The population of this region is in an utterly hopeless situation. There are places where over 50% of the population are unemployed without the slightest hope of finding work. In the entire county there was only one large factory, the Finnish Elcoteq, but in 2011 the firm filed for bankruptcy and between 5,000 and 7,000 people lost their jobs. Until 2011 the lucky ones in these godforsaken villages could find work in Pécs, commuting between work and home. That opportunity is gone.

The Pécs stringer for Népszabadság visited four tiny villages, two close to Szigetvár on the west and two near Sellye, the largest town in the so-called Ormánság. I might add here that the Roma population of south Baranya is pretty high. It always was, but by now there are villages where all of the inhabitants are Roma. This is especially true of the Ormánság. Both Szigetvár and Sellye are marked on the map below.

The reporter’s journey began in Kétújfalu (pop. 667), 13 km from Szigetvár. There even the Fidesz-KDNP mayor’s son moved to Germany where he began as a dock worker but by now has a job as a computer technician. He made 110,000 forints a month as a fire fighter in Hungary; he now makes about three and a half times that amount–1,300 euros a month. The thirty-year-old English teacher in the village school packed up a couple of years ago. She became a housekeeper in the UK. A fifty-year-old locksmith has been working in Germany for the last ten years. Last summer his wife followed him. She was a cook in the school, now she works as a cleaning lady. She gives the impression of being a “secure and self-confident person,” at least this is how the mayor, who is a German-Russian-gym teacher, describes her.

The situation is very much the same in Teklafalu (pop. 343) close by. The first emigrant was a butcher who went to Germany fifteen years ago. His son decided to become a butcher as well in order to work with his father. As soon as he learned the trade he followed his father to Passau where he got a job at the firm his father is working for. The family has two daughters who are still not on their own, but once they finish school the wife is going to follow husband and son. She is ready to work in a factory. After all, in the old regime she worked in a canning factory in Szigetvár.

After the son of our butcher left, interest in emigration grew in Teklafalu. Two women in their fifties left for Germany. The son of one them headed to Italy. A young fellow just left for the Netherlands, but he is not the first one in that country from the village. A young woman left years ago and recently her father followed her; he got a job as a security guard. “He had enough of the poverty,” as his neighbor said.

County of Baranya

From the Szigetvár region the reporter moved south, close to Sellye, to a village called Bogdása (pop. 295). The place has a Catholic and a Hungarian Reformed church but neither priest nor minister. They come from Sellye for services. The same exodus can be observed here. First, one fellow left for France and soon enough two more followed him. Neither man was unemployed at home; they had jobs but never made more than 120,000-150,000 a month. Now they make about five times that amount as plasterers. One of them is in Rennes and the other in Grenoble. Their sister is planning to go to Austria and would be happy to work either in a restaurant or in a hotel. Another couple moved to England where they work in a Sony plant. As their neighbors say, “they don’t even visit anymore.” Three men from the village work in a slaughterhouse in Germany while three others, also in Germany, got jobs as long distance truck drivers.

The most interesting story is from Drávafok (pop 508). Tímea  Buzás is thirty and Roma. She has been working in the United Kingdom ever since 2006 when she graduated as a midwife. At that time she applied for a job in Drávafok but lost out to someone else. She suspects that her Gypsy origin had something to do with it. So she decided to leave for Great Britain. Because she didn’t know English she first worked in a factory. Two years later when her English improved she got a job looking after elderly people. A year later she got a regular job as a nurse. Today she is head nurse in Crawley and makes 2,500 pounds a month.

In the last six years she paid off her parents’ mortgage on their house (4 million), spent 2 million fixing up their house in Drávafok, bought an apartment in Pécs for 8.5 million, and spent another 2 million fixing it up. She also generously helps others, preparing them for the journey and conditions in the UK. She apparently managed to get jobs for 72 of her acquaintances. Once they are there she helps them open bank accounts, fill out job applications, and find apartments. Out of the 500 inhabitants of Drávafok there are at least 15 people just in England.

These people, six months after arriving in the UK, are able to send home 200,000-250,000 forints a month. Not surprisingly there is great interest in moving to Great Britain in Drávafok. Tímea, who is currently spending her summer vacation at home, was approached by seven of her neighbors in just the past few days. The only impediment is that future emigrants must have some initial capital with which to start their new lives. According to Tímea one needs at least 300,000 forints. Since most of the inhabitants of Drávafok can get only 45,000 forint public works jobs it is almost impossible to scrape together such a sun. Otherwise, I suspect, there would be no way of stopping them.

Until now the Roma of Baranya County didn’t rush to leave the country seeking jobs abroad. That has changed. As one mayor in the region said, the best educated and the most ambitious are the ones who are leaving, which is a real pity.

Yes, this situation greatly resembles what was going on in the northeastern counties of Greater Hungary in the late nineteenth century. The news spread by word of mouth. One villager went to the United States to work in a factory or mine and sent home glowing reports about his good fortune. And more and more packed up until half of the villages had no adult men. This is what seems to be going on today, at least in Baranya. But now the women are also leaving.

Viktor Orbán’s letters to the Hungarian people: An expensive habit

After the citizens of  Esztergom voted Tamás Meggyes, the long-standing Fidesz mayor of the city (1999-2010), out of office, the Fidesz-majority city council brought the normal functioning of city hall to a virtual standstill. Starting with preventing Éva Tétényi, the new mayor, from occupying her office, they did everything under the sun to paralyze the governance of the city. Articles appearing in the media often called attention to the fate of the city that had the temerity to drop a Fidesz official who also serves in the Hungarian parliament. They predicted that if by some miracle Fidesz loses the next elections this is the fate that will befall the new government.

Less attention was paid to the city of Pécs which had held a municipal by-election a year and a half earlier. Pécs was unlucky with its MSZP mayors. One died as the result of a car crash and his successor died of cancer shortly after he took office. Thus in May 2009, a year before the national election in which Fidesz-KDNP won a two-thirds majority, a Fidesz candidate, Zsolt Páva, decisively beat MSZP’s Katalin Szili, who was at the time the speaker of  parliament.

More attention should have been paid to this by-election in Pécs. With hindsight we can see that the city was in many ways Fidesz’s laboratory for its national election campaign. Moreover, once the new Fidesz mayor occupied his office, his political strategies also foreshadowed what was to come after the party’s landslide victory in 2010.

It was in Pécs that Gábor Kubatov, the party’s campaign manager, put into practice what American advisers taught him about grass root campaigning. The lists his activists compiled became infamous when his bragging about his knowledge of all the “communists” in Pécs became public. But once Fidesz found out that this new campaign style worked splendidly on a small scale, the party decided to apply it nationally.

I’m almost certain that during his first days in office every step Páva took was dictated from above. Otherwise, it seems unimaginable that the mayor of a city of less than 200,000 would on his own initiative forcibly oust a foreign company from the city (and hence the country as well). I think we can say with some degree of confidence that Viktor Orbán had already formulated his plan to nationalize utility companies. What strengthens this hypothesis is that shortly after the expulsion of the French company in Pécs, János Lázár, then still mayor of Hódmezővásárhely, population 40,000, uttered similar threats. Lázár’s threats never went any further, most likely because of the very strong reaction of French president Nicolas Sarkozy to the assault on French companies.

At any event, immediately after he was ensconced in his office Páva began writing letters to the citizens of the city, asking their opinions on various matters. They were supposed to register their views and send back their answers. At the time I thought that this was a very clever way of engaging the citizenry. Not that I thought the answers had much significance or effect, but I considered it a clever political move.

One of Viktor Orbán thirteen letters

It seems to me that the barrage of letters with which the new Fidesz mayor in Pécs surprised his voters was again a test. If these letters had a positive impact, perhaps the practice could be adopted once Viktor Orbán became prime minister of Hungary. And indeed, the Pécs experiment worked. At the regular municipal elections the once solidly socialist city switched sides. Fidesz gained an overwhelming  majority on the city council and naturally Páva was reelected.

And so Prime Minister Viktor Orbán began his “correspondence with the Hungarian people.” His first letter was sent out in September 2010 followed by eleven or twelve more since, to the tune of 3.4 billion forints (taking the total number of letters to be twelve) according to an estimate by Index.  Népszava calculated on the basis of thirteen letters that 4.4 billion forints were spent on the letters themselves in addition to the cost of their accompanying ad campaigns. They estimated that about 5 billion forints were spent on Viktor Orbán’s penchant for “direct communication with the people.” The journalists of Népszava also figured out what kinds of  sorely needed goods and services this sum could have purchased. For example, 900 ambulances or the salaries of 350,000 people employed in the public works program.

In the beginning some of the more naive souls actually sent back their answers, and the government proudly announced the success of their solicitation. But as time went by fewer and fewer letters were returned. The overwhelming majority ended up in the garbage. On at least one occasion one of the trade unions organized a campaign to collect the letters and sell them for recycling, giving the proceeds to charity.

One of these letters was sent to inhabitants of towns with populations of fewer than 5,000. It explained to them in what manner and to what extent the central government would finance these smaller boroughs. Here it seems that the soothing explanations actually presaged drastic cuts. Just the other day Róbert Molnár, mayor of Kübekháza (population 1,600), received 3,480 forints for the month of July. This is not a typo. Kübekháza needs about 5 million forints a month just to meet its critical expenses. The electric bill alone is about 40,000 a month. Róbert Molnár with the full support of the town council sent the 3,480 forints back to the government. They found the sum insulting. And Molnár is a Fidesz politician who in fact was a member of parliament between 1998 and 2002. Naturally he made quite a splash since he made sure that the media outlets were informed.

The latest missive was a thank you note straight from Viktor Orbán to those who allegedly signed one of the two million petitions Fidesz received in support of  lowering utility prices. A nice gesture, one could say. But it seems that among those being thanked, according to more and more Hungarians who are speaking out, were family members long dead. One becomes a bit suspicious. Suspicious about Fidesz’s lists in general, about the number two million, and about the whole phony pen pal game.

Nationalization Hungarian style

It is hard not to notice that the Orbán government is very fond of state ownership, especially in business sectors that they deem of “vital interest to the nation.” The first major venture of the Hungarian government was the purchase of a 21.1% share in MOL. It was a fantastic deal for the Russian company that owned these shares and a truly rotten one for the Hungarian government. As we discussed at the time, the Orbán government overpaid: 22,400 forints per share. Today the price is 16,350.

The next move was to buy out Rába Automotive Holding, whose stock is languishing on the Budapest Stock Exchange. This was followed shortly thereafter by the purchase of the German E-ON storage facilities. Again the price was too high according to people in the know.

So, one can ask,what is the Orbán government after? When we hear about the nationalization of private property, we tend to think of the kind that took place in 1948-49 when one day the store owner arrived to open up his small store only to be barred from entering. Surely, this kind of nationalization is out of the question today. If the state wants to have a greater share in the economy, it has to find more subtle ways of achieving its desired end.

Policy Agenda, an economic and political think-tank, estimates that up to date the Orbán government has spent more than three trillion Hungarian forints on purchasing or acquiring in one way or the other hitherto privately owned businesses. In most cases, at least outside of the energy sector, the state doesn’t actually want to own these companies. Rather, it wants to change the ownership structure of a particular business sector. In plain language, to take away from some in order to give to others.

Reaching hands / tmblr.com

One method is direct interference in the ownership of entire business sectors. The government is able by legal means to force current business owners to give up their businesses and sell them to others. The transfer in such cases is direct; the state is not an intermediary.

A good example of this type of state interference is the pharmacies. Soon after the Orbán government came into power the decision was reached that by a certain date all pharmacies must be owned by a practicing pharmacist working on the premises. Now it seems that relatively few employees want to buy their boss’s pharmacy although the government is offering loans. So for the time being the state will have to step in and assume “temporary” ownership.

Another example of direct transfer of ownership is the heavily criticized land lease program by which state-owned lands are distributed to people close to Fidesz and their relatives. By legal means the government can also achieve a transfer of ownership in the banking sector by demanding a minimum 50% Hungarian stake in all banks in the country.

A second method of ownership transfer is for the state to make a certain segment of the economy a monopoly. Cases in point: the monopolization of tobacco products or, earlier, of  slot machines. Here the state not only interferes with private property ownership but shuts down all activities connected to a market segment. The same thing happened to the so-called Elizabeth lunch vouchers, the issuance of which became a state monopoly. It’s no wonder that the European Commission objects to the practice.

A third method used by the Orbán government to achieve a change of ownership is price fixing. No one doubts that a government has the right to adjust tax laws, but when it also decides the final price of the product the owners of the enterprise might be forced to sell because of financial pressures. The much lauded mandatory lowering of utility prices is a good example of this method.

A fourth method of ownership transfer occurs when the central government takes over the responsibilities of the municipalities and consequently their business activities. This is what happened in the case of schools and hospitals. The municipalities now own the buildings and therefore are responsible for their maintenance but the activities within these buildings are supervised by the central government.

I doubt that we’ve seen the end of the state’s expansion into the domestic economy. If tobacco products could be made a monopoly why not have national liquor stores? I’m also certain that casinos are on the list. Perhaps the transfer of Margaret Island from District XIII to the City of Budapest is the first step in building a state casino on the island.

A final note on the French Suez  Environment  Co. that was part owner of Pécs’s water company. You may recall that shortly after Zsolt Páva, the new Fidesz mayor, took office in 2009 security officers in the dead of night locked out the employees of Suez and the city forcibly took over the company. The head of the company couldn’t even enter the building. Suez naturally sued. It was only a few days ago that Páva proudly announced that they settled with Suez for 7.5 billion forints instead of the 10 billion (34  million euros) originally demanded by Suez. The central government will take over part of the obligation.  Meanwhile the price of water has gone up substantially and local MSZP officials claim that investors cannot be convinced to come to Pécs. They all remember the fate of Suez. Currently unemployment in the city is 13%, well above the national average.

Who ever said that governments were great entrepreneurs?