American rapprochement with Viktor Orbán’s Hungary?

While readers of Hungarian Spectrum continue to discuss the possible reasons for André Goodfriend’s departure, let me share one right-wing Hungarian reaction to the exit of the former chargé, István Lovas’s opinion piece in yesterday’s Magyar Hírlap titled “The Bell Change.”

One could devote a whole series of posts to István Lovas himself, from his brush with the law as a teenager to the open letter he wrote recently to Vladimir Putin in which he asked him to start a Hungarian-language “Russia Today” because the Russian propaganda television station is actually much better than BBC. Lovas lived in Canada, the United States, and Germany, where he worked for Radio Free Europe. He was considered to be a difficult man who caused a lot of turmoil in the Hungarian section of the organization.

For many years Lovas was a devoted Fidesz man. He already held important positions in the first Orbán government (1998-2002). For years he worked for Magyar Nemzet, most recently as its Brussels correspondent, but a few months ago Lovas, along with a number of other Orbán stalwarts, lost his job. Mind you, the European Parliament had had enough of Lovas even before he was sacked by Magyar Nemzet, especially after he presented a bucket of artificial blood to Sophie in ‘t Veld, the Dutch liberal MEP. The bucket of blood was supposed to symbolize the Palestinian children who were victims of the Israeli-Palestinian conflict. Lovas, himself of Jewish descent, is a well-known anti-Semite.

After having lost his job at Magyar Nemzet and after Putin failed to respond to his plea for a Hungarian “Russia Today,” Lovas moved on. Gábor Széles, who owns Magyar Hírlap and EchoTV, offered him a job. Now he has a weekly political program called “Fault Lines” (Törésvonalak) on EchoTV, and he also writes opinion pieces for Széles’s newspaper.

So how does István Lovas see American-Hungarian relations in the wake of the arrival of Colleen Bell and the departure of André Goodfriend? To summarize his opinion in one sentence: from here on the United States and the Orbán government will be the best of friends.

According to Lovas, André Goodfriend was the darling of those lost liberals who have been wandering in the wilderness “ever since SZDSZ was thrown into the garbage heap of history.” They are still hoping that nothing will change. Originally they were certain that Goodfriend would run the embassy while the newly arrived ambassador would be its public face. Meanwhile, Goodfriend would continue visiting “left/neoliberal SZDSZ or MSZP politicians and intellectuals.”

These liberal hopes were dashed soon after Colleen Bell’s arrival. The new orientation was clear from day one. Bell went and laid a wreath at the statue of the unknown soldier on Heroes’ Square. She visited the Csángó Ball organized every year to celebrate a fairly mysterious group of Hungarians living in the Romanian region of Moldavia, speaking an old Hungarian dialect. These are important signs of the new American attitude toward things dear to the current government: fallen heroes and national minorities. Certainly, says Lovas, Goodfriend would never have been found in such places. Yet liberals don’t seem to have grasped the significance of all this. They think that more Hungarians will be banished from the United States and that Hungary will have to pay a high price for peace with the United States. Most likely, Orbán will have to compromise on Paks, on Russian-Hungarian relations in general, and/or will have to buy American helicopters.

But Lovas has bad news for them. There will be no more talk about corruption cases, and Hungary will pay no price whatsoever. Colleen Bell realized that Goodfriend’s methods had failed. Of course, Lovas is talking nonsense here. Even if Lovas is right about a change in U.S. policy, it was not Bell who decided on this new strategy but the United States government.

Lovas is certain that the change has already occurred. It is enough to look at the new website of the U.S. Embassy in Budapest. There are no more programs on tolerance, on Holocaust events, “all those things that are kicks in the groin of the Hungarian people and their elected government.” A drastic change occurred in U.S.-Hungarian relations which even such liberal-socialist diplomats as Péter Balázs, foreign minister in the Bajnai government, László Kovács, foreign minister under Gyula Horn, or András Simonyi, ambassador to Washington (2002-2010), couldn’t explain away.

This change couldn’t have taken place if Goodfriend had stayed or if the Orbán government had conducted “the kind of servile atlantist policy recommended by Géza Jeszenszky,” foreign minister under József Antall and ambassador to Washington during the first Orbán government. Jeszenszky, who just resigned as ambassador to Norway, had a long interview in which he expressed his deep disappointment with Viktor Orbán and his foreign policy, especially with his attitude toward the United States.

According to Lovas, what happened recently is a victory for Orbán’s foreign policy, a feat that “could be achieved only by the courage and tenacity” of the Hungarian prime minister. The United States government tried to mend its ways by sending someone to Budapest who is not worried about such things as tolerance or the Holocaust. From here on the Budapest embassy will function just as American embassies do in other capitals. The U.S. Embassy in Vienna, for example, does not report “breaking news” about the Anschluss.

Lovas might exaggerate, but something is going on. When was the last time that Viktor Orbán called together the whips of all political parties for a discussion on Hungarian foreign policy? As far as I know, never. As Magyar Nemzet put it, “Viktor Orbán asked for the support of the political parties in reaching the nation’s foreign policy goals.” Among the topics was the objective of “strengthening the American-Hungarian alliance.” Péter Szijjártó, who was of course present, claimed that “political relations with the United States are improving” and that the Orbán government “will take further steps toward the restoration of earlier economic, political, and military cooperation.”

The meeting of the leaders of the parliamentary delegations convened by Viktor Orbán
Source: MTI / Photo Gergely Botár

I’m sure that we all want better relations between Hungary and the United States, but the question is at what price. The United States can’t close its eyes to Viktor Orbán’s blatant attacks on democracy, the media, human rights, and civil society. And then there is the timing of this alleged renewed love affair between Budapest and Washington. If true, and that’s a big if, it couldn’t have come at a worse time for Hungarian democracy–yes, liberal democracy. Just when Viktor Orbán’s support is dropping precipitously and when it looks as if he may lose his precious two-thirds majority in spite of all the billions of forints he promised from taxpayer money to the city of Veszprém to buy votes. When a large part of the hitherto slavish right-wing media at last decided to return to more critical and balanced journalism.

No, this is not the time to court Viktor Orbán. It would be a grave mistake. It is, in fact, time to be tough because the great leader is in trouble. Trouble abroad, trouble at home. Frans Timmermans, the first vice-president of the European Commission, in a speech to the European Parliament said the following without mentioning Viktor Orbán’s name: “We cannot let our societies imperceptibly slip back; we cannot allow illiberal logics to take hold. There is no such thing as an illiberal democracy…. We are keeping a close eye on all issues arising in Member States relating to the rule of law, and I will not hesitate to use the [EU Rule of Framework established last March] if required by the situation in a particular Member State.”

The Orbán government is at a loss: Which way to turn?

Today even Válasz had to admit that the Hungarian government’s PR stunt that followed the less than successful Merkel-Orbán meeting was a mistake. Referring to the false news about mega-investment,” Valóság, after an earlier glowing report, had to retreat and acknowledge that “there is no BMW, there is no new Mercedes factory and Fidesz doesn’t seem to be successful in the RTL Klub affair either. This wouldn’t be drama if the government had the guts to deny Vs.hu‘s news. But now we do have a small drama.”

I don’t know whether we can call it a drama, but that the Hungarian government’s already tarnished reputation now has an ugly rusty spot as well, that’s for sure. AFP picked up the news about the gigantic German investments that were agreed on during the meeting between the German chancellor and the Hungarian prime minister, but unlike András Kósa, the author of the Vs.hu article, AFP, before publishing the article, did go to the “spokesman for the Hungarian government [who] declined to comment.” Not did the spokesman not deny the story, as Válasz would have suggested, but he purposely spread the disinformation. That leaves me to believe that this PR stunt was concocted by the large communication team around the prime minister’s office.

What can one say about a government that engages in such cheap tricks? Keep in mind that the team around Viktor Orbán was handpicked by the prime minister himself. The members of this team are the ones who manage “communication,” which seems to be the most important aspect of politics for Viktor Orbán. He is like a salesman who has only one goal: to sell his wares regardless of their value or even utility.

What were these communication wizards thinking? Surely they had to realize that sooner or later reporters will ask these companies about their alleged plans and the truth will be revealed. Indeed, Mercedes and BMW have already denied the leaked information about their plans to build factories in Hungary, and this morning we learned from the Siemens spokesman that Siemens is no longer active in industries connected to nuclear energy and therefore the news about their involvement with the Paks Nuclear Power Plant is untrue. As far as the helicopters are concerned, apparently no decision has been made. It is possible that after the meeting Airbus, the French-German company reported to have won the contract, might not be the favorite.

I can only hope that the story of this ruse will reach Angela Merkel’s office, not that I have any doubt about her assessment of the Hungarian prime minister’s character. In any case, the Orbán government’s courting of Germany as a counterbalance to the United States did not work out to Orbán’s satisfaction. Of course, he himself is partly to blame for the fiasco with his public defense of “illiberal democracy.” Even Gábor G. Fodor, a right-wing “strategic director” of Századvég, a Fidesz think tank, said that Viktor Orbán made a mistake when he openly defended his vision of “illiberal democracy.” In fact, he went so far as to say that “this debate cannot be won,” especially not before a western audience. If this absolutely devoted Orbán fan considers the prime minister’s defense of his ideology to have been a mistake, then, believe me, the mistake was a big one.

So, here we are. After all the effort the government put into good relations with Germany, it looks as if Angela Merkel was not convinced. So, where to go from here? There seems to be a serious attempt at improving U.S.-Hungarian relations. This effort was prompted by the long-awaited arrival of the new U.S. ambassador, Colleen Bell, who shortly after her arrival began a round of visits and attended to a number of official duties. Her first trip was to Csaba Hende, minister of defense, which was reported by Hungary Today, a  newly launched, thinly disguised government propaganda internet site. The news of her visit was coupled with the announcement of Hungary’s plans to purchase a new helicopter fleet. The fleet will consist of 30 helicopters that will cost 551 million euros. Discussing the helicopters and Colleen Bell’s visit in the same article was no coincidence. Most likely, the Hungarian government wants to give the impression that there is a possibility that the helicopters will be purchased from the United States.

Even more telling is the paean on the Hungarian government’s website to “successful Hungarian-U.S. economic cooperation.” The occasion was the opening of Alcoa’s “expanded wheels manufacturing plant in Hungary.” It is, if I understand it correctly, an expansion of facilities that have been in place ever since 1996. The construction cost $13 million, and it will create 35 new permanent jobs. The facility was officially opened by Colleen Bell and Péter Szijjártó. Szijjártó was effusive: “with Alcoa’s new investment, a new chapter has opened in the success story of Hungarian-U.S. economic cooperation.” We also learned that the Hungarian government “granted one billon forints for the project.”

Photo by Márton Kovács

Bell, for her part, appealed to Hungarian pride by reminding her hosts that, although Alcoa has existed for 125 years, “this is not very long in terms of Hungary’s 1000-year-old history, but for the United States, a 125-year period covers half of its existence.” Music to Hungarian ears. Of course, she also promised that in the future she will work hard to create new opportunities for both U.S. and Hungarian businesses and to further improve their cooperation. The mayor of Székesfehérvár, the city where the Alcoa factory is located, announced that the wheels of buses in the city will gradually be replaced with Alcoa products.

I somehow doubt that courting the United States in this manner will make Washington forget about the anti-American rhetoric of  pro-government papers or the incredible performance of the Orbán government in connection with the U.S. banning of Hungarian nationals because of corruption charges. Somehow I have the feeling that courting the United States without changing government policies will be just as unsuccessful as Orbán’s earlier efforts in Germany.

And one final note. Today Orbán announced that the fate of cheaper utility costs depends on his successful negotiation with Vladimir Putin on the price of gas and oil to Hungary. If he is unsuccessful, the current low utility rates cannot be maintained. The message? The Hungarian people should support his Russia policy. If not, their utility bills will rise again. Let me add that the team that came up with the idea of reducing utility prices hit a gold mine. The Orbán government’s popularity in 2012 was even lower than it is now. Yet a year and a half later the popularity of the party and the government soared. For Orbán utility rates are terribly important, and therefore I suspect that he will do everything in his power to strike a deal with Putin. The question is at what price.

Fidesz insiders think Orbán’s days are numbered

The week between Christmas and New Year’s Day usually offers little sustenance for news junkies. But today I discovered a front-page article in Népszava with the titillating title “Does Orbán have only months left?” The paper’s “sources close to Fidesz” claimed that “Orbán is already finished” and the only “question is who will take his place.”

The article was met with skepticism, especially in pro-government circles. Válasz described the article as sci-fi and “entertaining.” Gábor Török, the popular political scientist, wanted to know what his Facebook “friends” thought about the appearance of such items in the media. Do government politicians actually say such things to reporters of an opposition paper or are the reporters only giving voice to their wishes? The comments that followed were a mixed bag but a reporter, András Kósa, who also receives information from dissatisfied Fidesz politicians, didn’t think that the article was fantasy, although it might be exaggerated. Here and there commenters thought that Fidesz will collapse as soon as Viktor Orbán is gone, but most “friends” of Török considered the article humbug. I’m less skeptical than most of Török’s friends because I’ve usually found Népszava to be reliable when it reports on information coming from unnamed sources.

So, let’s see what Népszava heard from “sources close to Fidesz.” They claim that Orbán’s “system” has no more than a few months before it collapses. Apparently Fidesz politicians are increasingly avoiding the limelight because “the fall is inevitable. In their opinion Orbán started down a road from which there is no return. Not only will he himself be the victim of his own mistakes but also his party and the country itself.”

The problems that beset the work of the government emanate from the character flaws of the prime minister: inconsistency, impenetrability, and unpredictability. Most government and Fidesz officials have no idea what course they are supposed to pursue. Orbán trusts fewer and fewer people, and the ones he still does give him wrong advice. He apparently is looking for enemies everywhere, and this is one of the reasons that government decisions are not preceded by any discussion. It often happens that Orbán himself changes his mind in the last minute, which makes consistent communication nearly impossible. Underlings parrot a line that has been superseded by a new brainstorm of the prime minister. More and more people would like to save themselves from such embarrassments.

According to these informants, serious problems within Fidesz are not new although they are only now becoming visible. Signs of trouble began to surface when Orbán decided, sometime before the April elections, to change the “structure” under which Fidesz had been functioning very well for over twenty years. Until then, Lajos Simicska was in charge of the party’s finances, but “from the moment that Orbán decided to take over economic decisions” the old dual structure collapsed and with it the well-functioning system. When Orbán again managed to receive a two-thirds majority, he completely lost his sense of judgment. As months went by, anti-Orbán murmurs in the party began to proliferate, and the Christian Democrats, realizing that Orbán was losing his grip on the party, decided to put pressure on the beleaguered prime minister. That’s why Orbán had to give in on the unpopular law that forces stores to be closed on Sundays.

What observers see is no longer a “system” but a political process based on day-by-day ad hoc decisions which, according to the saner Fidesz leaders, cannot be maintained because “it is incapable of self-correction.”

The informers seem to have less information about actual attempts to topple Viktor Orbán. Names were not mentioned, but they indicated that the people they had in mind “would be quite capable of taking over the reins of government without changing political direction.” Népszava‘s sources consider Angela Merkel’s planned visit to Budapest in February a date of great importance. I guess they think that Merkel will tell Orbán that he is persona non grata as far as the European People’s Party and the European Commission are concerned.

Népszava‘s description of the strife and chaos within Fidesz is most likely accurate. The question is what Orbán is planning to do to forestall the outcome described by Népszava‘s sources. For the time being, as we learned from the interviews of János Lázár, Viktor Orbán, and László Kövér, he will fight to hold onto power by convincing his Peace March troops that the “fatherland is in danger.” I’m almost certain that internal polls are being taken to gauge support. Would it be possible to turn out 100,000 people to defend the prime minister against foreign and domestic intrigues? I assume that the size of the planned anti-government demonstrations on January 2 will also influence Orbán’s decision about the next step to take to combat his opponents inside and outside the party.

In any case, for the time being it was Antal Rogán who was called upon to announce a countermeasure that might take the wind out of anti-government sails.  It is called the “National Defense Action Plan.” The details are secret for the time being, but it most likely includes some kind of answer to the United States’ decision to bar six Hungarian citizens from the United States due to corruption. It is also likely that a huge propaganda effort will be launched to discredit the U.S.-EU free trade agreement that until now the Hungarian government has welcomed. According to government and Fidesz sources, the “National Defense Action Plan” was put together in the prime minister’s office by Viktor Orbán, János Lázár, Antal Rogán, Péter Szijjártó, and Árpád Habony (who neither holds an official government position nor has national security clearance). These are the people who make most of the decisions in the Orbán government.

Meanwhile what are the anti-Orbán political forces doing in this fluid situation? Ferenc Gyurcsány decided to ask those followers who have been at the anti-government demonstrations all along to bring party posters and flags to the January 2 demonstration. József Tóbiás, leader of MSZP, did not respond to Gyurcsány’s request to follow DK’s lead. But István Újhelyi, an MSZP MEP, announced today a socialist “diplomatic offensive” against the Orbán government. Orbán must be stopped because his “Russian roulette” will have tragic consequences.

At the beginning of the new year there will be at least two important events. First, the mass demonstration planned for January 2 in front of the Opera House. Three years ago a gigantic anti-government demonstration also took place there, and for a whole month newspapers kept asking how long Orbán could last. We are again asking the same question. Since Orbán not only survived but thrived in the last three years, some people might come to the conclusion that the Hungarian prime minister will always triumph, even in the most perilous circumstances. But I would caution the pessimists. Three years ago the pressure came only from the inside. This time Orbán has embroiled himself and the country in a high stakes international power play in addition to alienating about 900,000 of his former supporters.

The second event will be Orbán’s new “remedy,” the “National Defense Action Plan.” Will it work? Is Orbán strong enough to rally his troops for another supportive Peace March as he did in 2012? And even if he manages, will anybody care?

The sorry state of Hungarian foreign policy

This morning I listened to lectures delivered at a conference,”Az elszigetelt Magyarország és a globális világ” (Isolated Hungary and the Global World), that took place on Friday. The conference was organized by Attila Ara-Kovács, who is currently heading the foreign policy “cabinet” of the Demokratikus Koalíció (DK) and who earlier worked in the foreign ministry under László Kovács. Ara-Kovács was joined by Charles Gati, professor of political science at Johns Hopkins University, for a conversation centering on U.S.-Hungarian relations. Mátyás Eörsi, who was undersecretary of foreign affairs between 1997 and 1999, assessed the Orbán government’s foreign policy and came to the conclusion that as such it doesn’t really exist. Ferenc Gyurcsány delivered a short speech in which he insisted that the whole political system built by Viktor Orbán must be dismantled. There is no possibility of changing the current foreign policy strategy because that would mean a denial of “the essence of the system.” Zoltán Sz. Biró, an expert on Russia, delivered a fascinating lecture on the state of the Russian economy. Finally, Zoltán Balázs, a political scientist whose sympathies lie with the right of center, offered a few critical remarks, saying among other things that the speakers had ignored the resilience of Orbán’s followers. Orbán may go but his devoted admirers remain, and for them Hungary’s martyr complex is very much a reality. I can strongly recommend these lectures to anyone who understands the language.

Zoltán Sz. Biró, while outlining the grave Russian economic situation, expressed his surprise at the ignorance of Hungarian policymakers about the real state of affairs in Russia. Don’t they ever look at the economic and financial data available online? Obviously not, because otherwise Viktor Orbán and Péter Szijjártó should have been more cautious in their approach toward Moscow. But behind their Russia policy is Viktor Orbán’s mistaken notion of “the decline of the West” and thus he put all his eggs in one basket. By now it looks as if even the enlargement of Paks will come to naught.

As for the diplomatic corps, according to Mátyás Eörsi fear is widespread because of the hundreds of “pink slips” handed out to old-timers with diplomatic experience at the foreign ministry in the wake of János Martonyi’s departure. One “bad” sentence and the person’s job is in jeopardy. Thus, nobody offers any opinion that might differ from that of the “diplomatic expert,” Viktor Orbán.

Ferenc Gyurcsány and M. André Goodfriend at the Conference on Hungary in Isolation and the Global World

The housecleaning was so thorough that Szijjártó proudly announced that “we will lay the foundations of the new Hungarian foreign policy irreversibly, once and for all.” They will not retreat but forge ahead according to what they consider to be Hungary’s economic interest. Two weeks later it was announced that out of the staff of 900 at the ministry more than 200 will be fired, including some who were brought in by Tibor Navracsics a few months earlier. As a result there is total chaos in the ministry, whose new spokesman is a former sports reporter.

Not only is the ministry’s staff decimated but certain background institutions like the Magyar Külügyi Intézet (Hungarian Institute of Foreign Affairs) no longer exist since its entire research staff resigned en bloc. The administration is in the throes of “reorganization” of the institute. It’s no wonder that no one was prepared for the crisis in U.S.-Hungarian relations that came to the fore in mid-October.

By October and November there was such chaos in the ministry that some of the diplomats were certain that Szijjártó couldn’t possibly remain in his new position. Rumors circulated at the time that the ministry of foreign affairs and foreign trade would split into two ministries and that Szijjártó would be in charge of foreign trade only. This was probably a reflection of the long-suffering diplomats’ wishful thinking.

Others were convinced that Orbán will change his foreign policy orientation and will give up his anti-West rhetoric and policies. However, Attila Ara-Kovács in an article that appeared in Magyar Narancs outlined the impossibility of such a scenario. In the same article Ara-Kovács shed light on the atmosphere at the ministry of foreign affairs nowadays. An ambassador with close ties to Fidesz happened to be back in Hungary and wanted to talk to his superiors in the ministry. He was not allowed to enter the building because, as he was told by the security officer at the door, “you are on the list of those who are forbidden to wander around the corridors alone.”

Since then the situation has only gotten worse.  According to insiders, “in the last two months the chief preoccupation in the ministry is saving one’s job.” By October 34 ambassadors were sacked in addition to the hundreds who were fired earlier. János Martonyi, the previous foreign minister, because of his pro-trans-atlantic sentiments is considered to be a traitor and an American agent by those people who were brought in by Navracsics and Szijjártó from the ministry of justice and the prime minister’s office. Indicative of this new anti-American orientation, a recent order from the prime minister’s office required employees to report in writing all contacts with American diplomats over the last few years.

Szijjártó seems to have a free hand when it comes to personnel decisions. He created a job for a friend of his from the futsal team Szijjártó played on until recently. Despite no degree or experience, the futsal player will coordinate the work of the “minister’s cabinet.” For Szijjártó, as for the prime minister, it is “loyalty” that matters. Among the five undersecretaries there is only one with any diplomatic experience and he is, of all things, responsible for cultural and scientific matters. The newcomers don’t understand the world of diplomacy, so they’re creating their own rules. They are introducing a “new language” for diplomatic correspondence. They tell the old-timers that they mustn’t be “too polite” in official letters. Also, apparently they don’t consider it important to put conversations or decisions into writing. They think that a telephone conversation or perhaps an e-mail is enough. Therefore it is impossible to know what transpired between Hungarian and foreign diplomats. All that writing is cumbersome and slow. It seems that they want to follow the well-known practice of the Orbán government. A decision is made without any discussion and the next day the two-thirds majority passes the new law. But diplomacy doesn’t work that way. It is a delicate business.

Currently, I’m reading a biography of Benjamin Franklin in which his efforts at securing an alliance with France are described in some detail. It took him a year and a half to achieve that feat, which was vital for the young United States at war with Great Britain. And he was a seasoned diplomat. The new staff at the foreign ministry is decidedly unseasoned. Some of them haven’t even been schooled in foreign affairs, history, or political science. Believe it or not, two of the five undersecretaries have medical degrees. A rather odd background, I would say, for conducting foreign policy.

Diplomacy is the antithesis of everything that characterizes the Orbán government. For Viktor Orbán the “peacock dance,” which is basically nothing more than deceiving your negotiating partners, passes for diplomacy. And the new, “irreversible” foreign policy has already led Hungary to the brink of diplomatic disaster.

By the way, U.S. Chargé d’Affaires M. André Goodfriend, as you can see from the photo accompanying this post, attended the conference.

John McCain: “A nation that’s on the verge of ceding its sovereignty to a neo-fascist dictator”

Viktor Orbán must have had a rough couple of days. First came the bad news that Vladimir Putin had cancelled the Southern Stream project, and then yesterday John McCain, the Republican nominee for president in 2008 and chairman of the Senate Foreign Relations Committee, lashed out at him. In a speech delivered prior to the vote on Colleen Bell’s appointment to be the next U.S. ambassador to Hungary he gave a long list of objections to her appointment. The upshot was that McCain considers Hungary to be a strategically important country where a seasoned diplomat should head the mission instead of a political appointee.

Whoever collected information on Hungarian politics for McCain did a good job. Anyone who’s interested in knowing exactly what transpired can watch the video. The passage that caused outrage in Hungarian government circles came toward the end of McCain’s venting of his frustration:

We’re about to vote on a totally unqualified individual to be ambassador to a nation which is very important to our national security interest. Her qualifications are as a producer of the television soap opera “The Bold and the Beautiful,” contributed $800,000 to Obama in the last election and bundled more than $2.1 million for President Obama’s reelection effort. I am not against political appointees. I understand how the game is played, but here we are, a nation that’s on the verge of ceding its sovereignty to a neofascist dictator getting in bed with Vladimir Putin and we’re going to send the producer of “The Bold and the Beautiful.”

Zoltán Kovács, undersecretary in charge of foreign communication, is usually the first to raise his voice. He announced that “Hungarian diplomacy will immediately get in touch with American senator John McCain,” but he added that from the text it is clear that McCain was not talking about the Hungarian prime minister but about Vladimir Putin. Kovács’s most likely intentional misreading of the text could not be maintained for long because several Hungarian newspapers and television stations got in touch with the communication director of Senator McCain, who affirmed that there was no mistake. The senator was indeed talking about Viktor Orbán.

The Ministry of Foreign Affairs and Trade moved into action and called in M. André Goodfriend, the U.S. chargé d’affaires, to tell him, I assume, how wrong McCain was about Viktor Orbán. Considering that McCain is a Republican, I can’t quite see what Goodfriend as a representative of the Democratic Obama administration is supposed to do about McCain’s assessment of the Hungarian political situation.

And yesterday Péter Szijjártó announced that McCain must have based his opinion about the Hungarian prime minister on the antagonistic media because if he knew the real situation he would never call Orbán a neo-fascist dictator. The Hungarian response to any negative reaction to the Orbán government is always the same: The Hungarian citizens voted for this government three times this year and everybody should respect their decisions. Szijjártó also indicated that the Hungarian Embassy in Washington will get in touch with the staff of Senator McCain and will inquire about “the background of his statements” concerning the Hungarian prime minister.

Gergely Gulyás, a member of parliament and one of the deputy presidents of the assembly, was blunt. According to him, the “veteran senator for a short period of time lost his critical faculties.” Some pro-government journalists also used strong words. András Stump of Válasz called the 78-year-old senator “senile, ancient” (agg, vén) and not to be taken seriously. András Bencsik, editor-in-chief of the far-right Demokrata, called him an idiot. Another right-wing commentator again alluded to McCain as being incoherent during the session. But he did not stop there. He accused McCain of being far too friendly with Ukrainian Nazi politicians. And then he came to the crux of the matter: why is Hungary suddenly so important to the United States? Because of the United States’ interest in selling American shale gas to Europe. The Americans have become worried about Hungary being a middleman between Russia and Europe, which may result in their supplying all of Europe with Russian gas instead of their own. Otherwise, all the rest about democracy, about the illiberal state, about NGOs is of no interest to the United States. They are only excuses that mask the real intent.

John McCain in Budapest, January 2014
Despite the compulsory smiles, McCain was not too happy even then

Of course, this story our man concocted is total nonsense, but what is really worrisome is that the official advisers to the Hungarian government, the great “political scientists” of Századvég, also seem to think along the same lines. Yesterday I cited some foreign policy experts who actually know their subject but who have been dropped from the ministries or, if they work in independent research institutes, are never consulted. On the other hand, we know that Századvég has allegedly supplied the government in the past four and a half years with thousands and thousands of pages of advice on domestic and foreign policy strategy with which, it seems, the Orbán government is completely satisfied. What kind of advice is supplied to the Hungarian government is well demonstrated by an article by Gábor G. Fodor, the strategic director of Századvég, which was published on December 1 in Napi Gazdaság, the paper owned by Századvég.

Very briefly summarized, the United States’ interest in Hungary and the East-Central European region is dictated by one consideration only: getting rid of the Russian monopoly over the gas supply in the region. All the attacks on Hungary in the last few months have served this purpose. The U.S. has a master plan: (1) Ukraine must fall into the sphere of American influence; (2) the United States wants to stop the building of the Southern Stream; and (3) the Americans intend to prevent the Russian purchase of the MOL shares in the Croatian oil company INA. The goal is “a total change of monopoly of gas supply in the region.” Hungary is at the center of this master plan and surely this is why Hungary suddenly became such an important country for the United States. Hence the attacks against the Orbán government.

Can you imagine what kind of Hungarian foreign policy can be based on G. Fodor’s “analysis”? I shudder to think.

I am not at all sure that Hungarian diplomacy in its present state can successfully navigate through the perilous sea Hungary managed to get itself into thanks to the brilliant strategy of Viktor Orbán. Until recently the Orbán government was certain that a Republican administration would have closer and warmer relations with them, but after McCain’s outburst they must realize that even if the Republicans win the next election Hungary will remain a pariah in Washington, unless some miracle happens in Budapest. Like Viktor Orbán vanishes from Hungarian politics. And that at the moment does not look likely.

Viktor Orbán’s Eastern Opening initiative is foundering

Vladimir Putin’s announcement yesterday about the cancellation of the Southern Stream caught the Hungarian government by surprise. It looks as if Putin neglected to tell his loyal strategic ally that Russia was planning to scrap the project upon which the Orbán government built its foreign and energy policy.

It must have been a bitter pill to swallow, and I am fairly certain that it will not be the last. Because Russia is in trouble. Big trouble. The current economic situation reminds Csaba Káncz of privátbankár.hu of the late Soviet period when in 1985 Saudi Arabia dramatically raised the daily quota from three to eight million barrels and the price of oil dropped from thirty dollars to ten. The same commentator reminded his readers that three-quarters of Russian exports come from oil and that half of the Russian budget depends on oil revenues. The Russian situation today raises the specter of 1998, when the country defaulted on its domestic debt and declared a moratorium on payment to foreign creditors.

They are empty

Indeed, Russian economic prospects are grim. Since the beginning of the year the ruble has lost 60% of its value. Inflation is at 9%. Official figures for economic growth are revised practically monthly, and it looks as if Russia is heading toward recession. Apparently Rosneft, the giant Russian oil company, had to sell 20% of its shares to keep the 2015 budget in balance, at least for a while. The Russian people are already feeling the pinch. Real wages may drop by 4%.

Even Válasz woke up and in a short article listed five signs that “Russia is in trouble.” The drastic devaluation of the ruble, oil prices, inflation, recession, and the flight of capital are the telling signs. Válasz points out that $120 billion in foreign capital has left Russia recently.  Only Magyar Nemzet tried the old journalistic trick of publishing an article about a Bulgarian politician who thinks that “Russia’s decision … is only a tactical move.”

Otherwise, the Hungarian media uniformly interprets the cancellation of the Southern Stream as an indication that Viktor Orbán’s Eastern Opening has failed. Hungary’s foreign policy, if you can call it that, is in tatters. How could it happen that the Hungarian administration put its blind faith in Putin’s Russia when for months it has been quite obvious that the Russian economy is in trouble? In fact, it was in trouble even before the western sanctions were imposed. Not only foreign analysts found the Russian situation worrisome but Zoltán S. Biró, a Hungarian expert on Russian history and politics, talked about the possibility that the Southern Stream might not materialize. A former Hungarian ambassador to Moscow, who is also knowledgeable about Russian affairs, also warned that the project might be scrapped and even ventured to predict that Paks might turn out to be a pipe dream. But these are not the people Viktor Orbán listens to.

Already under Foreign Minister János Martonyi (2010-2014) a large number of old hands in the foreign ministry were fired because they were deemed to be too closely associated with the socialist-liberal governments. But prior to the move of Tibor Navracsics and Péter Szijjártó to the ministry there were still a few people left who could have given an honest appraisal of the Russian situation. I hear, however, that fear has spread throughout the administration and that the foreign ministry is no exception. People are afraid to give their honest assessment of a situation because they know that “bad news” is not welcome in the prime minister’s office. Moreover, it has been apparent from day one that Viktor Orbán is conducting his foreign policy through Péter Szijjártó, a diplomatic greenhorn. And the “experts” they listen to are the folks at Századvég whose ideas about the world are staggeringly deficient. This is, at least in part, how Viktor Orbán ended up in this mess.

Commentators point out what we always knew: it is not the West that is in decline but Russia that cannot keep up with the rest of developed world. As Index put it, “Suddenly we learned that Russia is not so strong after all.” The drop in the price of oil and the sanctions did the job. It turned out that Russia is just “a huge Venezuela.” Orbán bet on the wrong horse and he lost. This is “a loss of prestige for NER (Nemzeti Együttműködés Rendszere/System of National Cooperation), Orbán’s alleged new political system.”

On Klubrádió Ferenc Gyurcsány also talked about the failure of a foreign policy that relies on an ever-weakening Russia. The Eastern Opening has no future and Orbán should end “the age of adventures,” a reference to the tenth-century Hungarian military incursions into Western Europe that eventually came to a sorry end when Otto I, the Holy Roman Emperor, taught them a lesson near Augsburg in 955. Gyurcsány made another historical allusion when he talked about Hungary ending up being “the last servile retainer” (csatlós) of Russia, comparing today’s situation to 1945 when Hungary stuck with Hitler’s Germany to the bitter end.

What did the administration have to say? Not much. According to Péter Szijjártó, “Russia has the right to make such a decision and Hungary takes note of it.” This terse statement barely hides Hungarian annoyance and disappointment.  He added that “the situation is entirely new. We have to look for new sources of energy.” His statement to MTI indicated that the Orbán government hasn’t done anything to look for alternative sources of energy. Everything was hanging on the completion of the Southern Stream by 2017. Today Szijjártó gave an interview to Magyar Nemzet in which he was asked about “the secure position of the Paks project.” His answer to the question was that, as far as he knows, Rosatom has never gone back on its commitments. A rather tricky answer because the real question is whether the Russian government is willing and able to lend ten billion euros to Hungary. If not, Rosatom is out of a job.

Magyar Nemzet tried to elicit a pro-Russian answer from Szijjártó by calling his attention to “the black and white” description of Russian-Ukrainian relations by the secretary-general of NATO, Anders Fogh Rasmussen. According to the pro-Russian and anti-American paper, he described Ukraine as a country that can expect “a wonderful European future” while Russia must be condemned. Well, Szijjartó did not fall into that trap. He again recalled Hungary’s bad experiences with the Soviet Union and promised that “Hungary will give all the necessary assistance to Ukraine to launch the necessary reforms.”

So, this is where we stand at the moment. This new development is clearly a blow to Viktor Orbán’s grandiose plans. The question is whether he learned his lesson or whether he will actually ratchet up his eastern policy, as many commentators predict.

Viktor Orbán’s Russian policy is unchanged, at least for the time being

A couple of days ago I saw a fascinating interview with András Bruck, a writer and an astute observer of the Hungarian political scene. Every time a new Bruck article appears, which is not that often, there is great excitement among people whose political views are similar to mine. For a number of years now, I have been an admirer, but this was the first time that I saw him in an interview situation. He didn’t disappoint me.

During the long interview Bruck talked about an interesting characteristic of Viktor Orbán. The greater the pressure, the greater his boldness. As if he were tempting fate. Almost as if he were testing the threshold at the point of no return. This characteristic has become especially pronounced lately as pressure on him, both internationally and at home, mounts. If Hungary’s allies don’t like his policies toward Russia, he makes sure that in every speech, whether the reference is appropriate to the occasion or not, he talks about the soundness of his foreign policy. If there is serious discontent at home because of his government’s corruption and his own questionable business dealings, he flaunts his close connection with two of his front men by attending the opening of their new ill-gotten businesses. Almost like a serial killer who gets bolder and bolder with each new murder, as if he wants to be caught.

Today I’m going to concentrate on one manifestation of that boldness: Hungarian-Russian relations. It is abundantly clear that neither the United States nor the European Union is happy with Orbán’s Russia policy. This unhappiness has been expressed in all sorts of ways, some subtle, some less so. One would expect that Orbán, even if he didn’t heed Western advice, would at least not call attention to his close ties to Vladimir Putin. But not so. In the last couple of days Orbán made it known that in his opinion Hungary’s national interest is his only concern and that a friendship with Russia is of paramount importance to his government.

On November 19 Orbán addressed the Diaspora Council, one of the many new Fidesz creations that is supposed to strengthen “national unity” across borders. He delivered an hour-long speech in which he felt it necessary to explain his position on Russia.

We have a given geopolitical situation…. We have more powerful and bigger neighbors to the East and to the West. Germanic people to the west, Slavic to the east, and a bit father the Russians. Consequently, we will be loyal to our NATO allies even if we do not share even 50 percent of what they say and think… We do not want a new Cold War. I grew up in the Cold War and I have no wish to end my life in another one…. We will express our discontent to anyone when we see our national interests being harmed. We do not want a new Wall to the East.

Two days later, in a speech to an audience of about 150 people at the Stiftung Familieunternehmen in Baden-Baden, he returned to the topic but this time the message was different. After all, he delivered that speech in Germany. Here he showed himself to be a great friend of Ukraine, the sovereignty of which is of the utmost importance to Hungary because “we think that there must be something between Russia and Hungary…. We once had a common border with the Soviet Union and that was quite an adventure.”

Now let’s look at Hungarian-Russian relations from the vantage point of Moscow. On November 19 Vladimir Putin hailed Hungary as one of Russia’s most important partners. “We share the attitude of the Hungarian leadership aimed at growing constructive dialogue, jointly carrying out planned very large investment projects,” Putin announced at a Kremlin ceremony where Hungary’s new ambassador presented his credentials. He said Russia considered Budapest “one of the most important political, trade and economic partners.”

On the same day Péter Szijjártó was in Moscow to talk with Sergei Lavrov, Russia’s foreign minister. As MTI reported, both men were upbeat after their meeting. Lavrov praised Hungary for not being antagonistic toward Russsia, adding that “there are more and more responsible member states in NATO and the European Union” who urge dialogue based on mutual respect. Hungary is certainly one of these, he added. Lavrov especially appreciated the fact that Hungary had confirmed its resolve to build the Hungarian section of the Southern Stream project.

Sergei Lavrov and Péter Szijjártó, Moscow, November 19, 2014

Szijjártó was also upbeat. He expressed his hope for early negotiations between the European Union and Russia over the construction of the Southern Stream. He emphasized that Hungary looks upon Russia as an important partner that plays a key role in ensuring the energy security of Central Europe. The rebuilding of practical and constructive cooperation between Russia and the European Union is in Hungary’s interest, Szijjártó emphasized.

Finally, a piece of information about Hungarian-Russian relations that the Hungarian government neglected to tell the country’s inhabitants. The most widely read Russian news portal, Gazeta.ru, ran an interview with Liubov Shishelina, a Russian expert on Hungary. From that interview we learned that Szijjártó went to Moscow not only to talk with Lavrov and other Russian politicians but also to prepare a forthcoming meeting, the fifth since 2010, between Putin and Orbán. This is not the first time that we learn details of Hungarian foreign policy from Russian sources.

German-Hungarian dialogues: Munich and Berlin

A few months ago, on August 7, 2014, Professor Charles Gati wrote an important article about Viktor Orbán’s Hungary,”The Mask Is Off.” The article was inspired by the Hungarian prime minister’s infamous speech on his plans to finish the job of building an “illiberal state” in Hungary. “Orbán has now dropped his democratic mask,” Gati announced. What followed was a thorough analysis of Orbán’s political system. At the end of the article Gati listed options the United States had for influencing Hungarian domestic politics. Among them, he mentioned the possibility of the United States “actively encouraging the European Union . . . to put the question of Hungarian membership in the EU firmly on the agenda.” That is, the European Union should no longer stand by helplessly watching Hungarian domestic developments and the increasingly anti-EU rhetoric of Orbán and his pro-Russian orientation.

If you watched the Budapest Beacon‘s interview with Kim Lane Scheppele, you undoubtedly noticed her rather optimistic assertion that now that Jean-Claude Juncker has finished creating his “cabinet,” Hungary’s case will finally be put on the agenda. If that happens, the question will be how the sides line up. Just today an article appeared entitled “EU allies alarmed at Hungary’s Kremlin drift,” which indicated that opposition to Orbán is growing even in the German Christian Democratic Party, which is in many ways the most important ingredient in an anti-Orbán coalition within the EU.

One of the few places west of Hungary where Viktor Orbán is still welcome in an official capacity is Bavaria, where on November 6 he was greeted by Horst Seehofer, minister president of Bavaria, as the democratically elected head of a coalition government. Hungarian reports indicated that Orbán’s visit was not without its critics but that Seehofer, the leader of the very conservative Christian Social Union, stood by Orbán. However, in an interview that appeared in the conservative Die Welt on November 8 one can see several not so subtle differences between the two men.

Horst Seehofer and Viktor Orbán in Munich
Source: Die Welt / Photo Jörg Fokuh

Seehofer wholeheartedly supports the European Union and does not see the kind of crisis Orbán invokes every time he has the opportunity. Seehofer talked about big union projects while Orbán thinks that each country is responsible for its own economy and that joint projects must wait. Seehofer wants to widen the eurozone and urges countries outside of that zone to introduce the structural reforms necessary to be eligible for membership. Orbán spoke sharply against the euro and made it clear that he wants none of it. At this point Seehofer became just a tad sharper in his response. He defended the euro as “the basis of our high standard of living.” Orbán did not give up. For him “the future of the euro is unclear.” Well, that was too much for Seehofer, who said that “the euro stays!”

Seehofer might be a good friend of Orbán, but he firmly believes in the founding principles of the European Union: “a value system based on democracy, justice, tolerance, and Christianity.” These values are much more important than a community based only on economic interests.

Finally there were questions concerning the Ukrainian crisis and, although Orbán tried to be diplomatic and not show his true colors on the subject, he indicated that helping Ukraine financially would be difficult. It would cost too much and “I have no idea where we are going to get that much money.” As for Putin, naturally Orbán said nothing about his relationship with Russia, but Seehofer made it clear that he no longer trusts the Russian president.

German-Hungarian relations, even in the most favorable case of Bavaria, are not without their problems. Other German politicians have been more outspoken about Hungary’s place in the European Union. Let’s start with Michael Roth, undersecretary of the German foreign ministry, who was also interviewed by Die Welt (November 12). The whole interview is about Hungary. According to Roth, “we are currently conducting an intensive debate on democracy and the rule of law in the European Union.” He expressed his satisfaction that the new Commission attaches such great importance to this issue. He is especially glad that Frans Timmermans, deputy president, “wants to increase the EU’s credibility in constitutional questions.” Roth was obviously talking about Hungary when he said that western countries press for democratic rights in China and Russia, but how can they be credible if they tolerate the lack of such values within the Union.

Roth brought up Article 7 of the European Constitution, which would take away rogue nations’ voting rights in the case of a gross violation of European values, and indicated that as far as he was concerned this measure “was an appropriate means in many cases,” certainly in cases like Hungary because he sees no improvement in Hungary as far as individual liberties, the rule of law, and the fight against corruption are concerned. All in all, Roth is watching the developments in Hungary with “great concern” because the existence of “liberal democracy is seriously in doubt in Hungary.”

And if that weren’t enough, there was the warning from Frank-Walter Steinmeier, German foreign minister, a couple of days ago when Péter Szijjártó visited Berlin. Steinmeier called on the Hungarian government to comply with fundamental democratic values.”There can be no doubt that all members of the European Union must be committed to the rule of law and the canon of civil rights,” Steinmeier said. How much Szijjártó understood is unclear, especially since in his answer he talked about Hungary’s “balanced, healthy, and pragmatic relations with Russia.” He also tried to assure his German counterpart that any “violation of international law,” presumably by Russia, is “unacceptable to Hungary.”

Péter Szijjártó and Frank-Walter Steinmeier in Berlin
Source: Die Welt / Photo Bernd von Jutrczenka

Not only does Szijjártó seem to be impervious to words of warning in Germany and elsewhere, his prime minister is practically taunting western politicians to go to battle with him. I’m almost certain that there will come a time when his wishes will be fulfilled.

No end to the saga of the Hungarian corruption scandal

The reverberations from the news that six Hungarian citizens are not welcome in the United States don’t seem to subside. The perpetuation of the verbal battle is fueled mostly by the Hungarian side. Some of the attacks come straight from politicians, others from the accused and from so-called “civil groups” that are strong supporters of the Orbán government and operate most likely with generous financial assistance from the public purse.

These latter two sources cannot be taken terribly seriously, and in fact as time goes by their originally very loud voices have quieted down somewhat. The most spectacular retreat came from Ildikó Vida, the president of NAV, the Hungarian tax authority, and her lawyer, Barnabás Futó. As one blogger noted, when Barnabás Futó stands next to someone close to Fidesz, that person is in trouble. Futó seems to be rather good at pettifoggery at home, but he is at sea when it comes to international law. Initially he had ambitious plans for getting satisfaction for his client. Since Vida was told by M. André Goodfriend that she can ask for a visa and, if her request is rejected, she might be able to get information about the nature of the charges against her, Futó decided to do just that. Moreover, while he was at it, he contemplated suing the American chargé. Soon enough someone must have told him that members of the diplomatic corps have immunity and that his dreams of his client having her day in court were illusory. He gave up on his plan to sue. And, upon reflection, Vida decided that, after all, she did not want to know any of the details of her alleged wrongdoing and that therefore she will not apply for an American visa.

The other thread in the continuing saga is the Civil Összefogás Fórum (CÖF), an unofficial arm of the government that has helped bolster the popularity of the government. They were the ones who organized the first Békement (Peace March), which was supposed to defend the beleaguered Viktor Orbán against a dark international conspiracy that wanted to remove him from his post during the winter of 2011-12. Ever since the American revelations, the leaders of CÖF, people belonging to the extreme right wing of Fidesz, have been itching to march out again, this time against the United States. However, their beloved leader, to their great regret, held them back.

CÖF’s spokesman, Zoltán Lomnici, Jr, son of the former chief justice of the Supreme Court and a lawyer himself, shows such ignorance of the law that it is simply staggering. He and “Futó Barnabás,” to whom I gave the nickname “futóbolond” (lunatic at large), bring shame to the Hungarian legal profession. Here is Lomnici’s argument: the American chargé is a foreign national who, as can be attested by pictures and videos taken of him, left the embassy of the United States and therefore stepped on Hungarian soil. According to Hungarian law, if he knew of corruption he was supposed to press charges and provide proof of corruption. Since he neglected to do so, he could be sentenced to three years in jail. Obviously our star lawyer hasn’t heard of the Vienna Convention on Diplomatic Relations (1961). I suggest that Futó and Lomnici study the document, which clearly states that “Diplomats must not be liable to any form of arrest or detention. They are immune from civil or criminal prosecution.” Let’s hope that the text is available in Hungarian because Futó at least does not know any English. Today the organizers of the Peace Marches officially announced that for the time being they will not gather the troops.

Politicians have not shown the same restraint. A few days ago Antal Rogán, the whip of the Fidesz parliamentary caucus, called Goodfriend a liar and announced that Hungary is a country of law, unlike the United States. “We all must declare that Hungary is not Guantánamo, here nobody can be accused without proof.” Rogán’s attack on the United States is most likely part of the game plan dictated from above because not long before Róbert Répássy, undersecretary of the ministry of justice, said exactly the same thing.

Calling everybody a liar who criticizes the Hungarian government is a Fidesz specialty. Diplomats, on the whole, at least in civilized countries, don’t call their foreign colleagues liars. But Hungary’s new foreign minister has no such compunctions. In an interview with Magyar Nemzet he said that “to accuse us of not conforming to the European legal system is a gross lie (orbitális hazugság).” In response to Szijjártó’s charge, the U.S. Embassy in Budapest released a statement today that included the following sentences: “As Charge d’affaires Goodfriend has said, the United States has consistently conveyed our concerns to the Hungarian government about developments that harm the health of democratic institutions, civil society, and media freedom in Hungary – including concerns about corruption,” and “the Embassy remains in close contact with the Ministry of Foreign Affairs and Trade. We will continue to conduct a constructive, diplomatic dialogue with Hungary on all issues across the broad spectrum of U.S.-Hungarian engagement.” In brief, the United States will not stop its current policy of defending civil society, media freedom, and civil liberties. It will also pursue its fight against corruption.

In addition, today new information reached the public concerning the background of the American ban. The Demokratikus Koalíció, the party that seems to have good connections with the Hungarian foreign ministry where there are many disgruntled employees, learned that a week ago the American embassy did give some information to the Hungarians. Today Szabolcs Kerék-Bárczy, a DK politician, made that information public at a press conference. At this point the foreign ministry decided to fess up: yes, they received something, but it was only a “scrap of paper” (fecni) that cannot be taken seriously. However, a few hours later the ministry made the document public.

Undersecretary Levente Magyar waving “the scrap of paper” from the U.S. Embassy

The two-page note describes the history of the numerous encounters between the embassy and the government of Hungary since February 2012. From October 2013 on, the American complaints multiplied. They had meetings with the “criminal directorate of the tax and customs office (NAV) on specific concerns about agricultural VAT fraud and tobacco nationalization.” A few months later the Americans were back at the “criminal directorate” but noticed “no evidence of action” on the part of NAV. In January 2014 the Americans had a meeting with the ministry of justice and public administration and they raised issues of VAT fraud, “institutionalized corruption, whistleblower protections, and Foreign Corrupt Practices Act (FCPA).” The whole list of complaints can be found on the foreign ministry’s website as well as in an article published on the subject by Index.

In brief, there were numerous complaints, and the Hungarian authorities refused to investigate. It is also clear from the document that the American authorities were fully aware that corruption is “institutionalized” in Hungary, yet the last word from NAV was that there were “no auditing complaints” and therefore the “Criminal Directorate … was unable to act.” Goodfriend  noted that “NAV’s specialized auditing unit created expressly to investigate trans-border VAT fraud … was systematically undermined and then disbanded.”

It looks to me, and obviously it was evident to the head of the American mission, that not only was no effort made to investigate but that the top leaders at NAV were doing everything in their power to make sure that corrupt activities could be continued undetected.

According to Levente Magyar, undersecretary of the ministry of foreign affairs and trade, this “scrap of paper” cannot be taken seriously. Why not? Because there is no date, no authentication, and above all, no seal. “Missing formal requirement” is a favorite excuse of Hungarian authorities.

International pressure on Viktor Orbán: Russia, Putin, and Gazprom

There is real concern among former Hungarian diplomats and foreign policy experts that Hungary’s isolation is practically complete and that she may remain the only “strategic ally,” to use Viktor Orbán’s favorite term even in connection with China, of Vladimir Putin’s Russia. And if the Orbán government does not try to extricate itself from this situation, the consequences can be serious. Although Fidesz supporters are convinced that the United States has embarked on the destabilization of the country with the goal of removing Viktor Orbán from power, this cannot be Washington’s intent. After all, the opposition is in disarray and replacing Orbán with another Fidesz politician would not accomplish anything. A new prime minister would be merely a figurehead; the real power would remain in the hands of Viktor Orbán.

Admittedly, on the surface this conspiracy theory finds some support in the coincidence of the American move to ban six corrupt officials and businessmen from the United States and the massive demonstrations against the internet tax that soon enough became a protest movement against the whole regime. But the latter wasn’t the U.S.’s doing. It was the folly of the Hungarian government that seems to commit more and more mistakes lately. Did Viktor Orbán lose his magic touch, or has he navigated himself into an impossible situation in which the “peacock dance” is no longer possible? He is increasingly being faced with a stark choice: either total commitment to the side of Russia or capitulation and acceptance of the rules of the game within NATO and the European Union.

Orbán might be a good politician–if we define a good politician as someone who can play one person against another, who can fool his allies, who disregards the law, and who within a few years manages to institute a one-party system, because that is what we have in Hungary. But his track record shows that he cannot govern, that he cannot run a country successfully. We who watched his first four years between 1998 and 2002 with growing concern knew that already, but it seems that in the eight years that followed his disastrous rule the Hungarian people forgot why they went out in record numbers to make sure that this man and his regime don’t come back.

The situation today is ten times worse than it was during his first administration. He has transformed the country into an illiberal democracy, and his pro-Russian policies have alienated Hungary’s allies. Viktor Orbán is considered to be a pariah and someone who is toxic because of his potential influence on some of the other countries in the region. Western politicians look upon him as a fellow traveler of Vladimir Putin. And, indeed, they seem to borrow each other’s ideas. Orbán copies Putin’s attacks on NGOs, while, it seems, Putin was inspired by Orbán’s nationalization of the textbook industry, reported just yesterday in the western press.

During his first administration Orbán was fiercely anti-Russian, and it seems that he didn’t change his mind on that score until lately. In December 2009 a Hungarian foreign policy expert and obvious admirer of Orbán described the forthcoming Fidesz victory as “Moscow’s nightmare.” Early in his second administration he worked furiously on a quasi-alliance system from the Baltic to the Adriatic in which Hungary would have a leading position. But his fellow prime ministers in the region wanted nothing to do with Orbán’s grandiose plan. He made every effort to dislodge Surgut, a Russian company that had a 21.2% stake in MOL, the Hungarian oil and gas company. By May 2011, after lengthy negotiations, the Hungarian government bought out Surgut, paying a very high price. At that time Hungary was no friend of Russia. Not yet. However, according to Fidesz sources, Orbán decided to radically change course sometime in early 2013.  He spent about six months pondering the issue and came to the conclusion sometime during the summer of 2013 that he would turn to Russia for an expansion of the Paks nuclear power plant. According to the same sources, his decision was based on his belief that the Czech Republic and Germany would need cheap energy which Hungary would be able to provide.

Since then, with the outbreak of the Russian-Ukrainian conflict, the political climate in Europe has changed dramatically. Orbán’s flirtation with Russia is looked upon with more than suspicion. The West considers Viktor Orbán and Hungary a liability. Soon enough, I believe, he will have to show his true colors. No more peacock dance. But it seems that Orbán by now is embroiled in all sorts of machinations with Russia in general and Gazprom in particular. The current setting for Hungarian machinations with Gazprom is Croatia.

Just a few words by way of background. In 2008-2009 MOL acquired a 47.47% stake in INA, the Croatian oil and gas company. In 2011 a Croatian newspaper reported that Zsolt Hernádi, CEO of MOL, had been accused by the Croatian prosecutor’s office of bribery. Naturally, the Hungarian prosecutor’s office found nothing wrong, but the Croats eventually went so far as to hand the case over to Interpol. As a result, Hernádi couldn’t leave the country; otherwise he would have been subject to immediate arrest. More details can be found in a post I wrote on the subject in October 2013. The decision was eventually made to get rid of MOL’s share in INA, but the Croatian government does not have the kind of money needed to buy MOL’s stake. Lately, there has been talk in the Hungarian press that MOL will sell its shares to a Russian buyer, most likely Gazprom itself. So, Gazprom will not only store gas in Hungary but might even control almost half of INA in Croatia.

INA: Managed by MOL

And now let’s return to American-Hungarian relations. According to some observers, “the highly unusual step of blacklisting six people with ties to the government in Hungary, a NATO ally and European Union member,” also has something to do with the “growing closeness between Hungary and the Kremlin over energy that could undermine Western attempts to isolate Russian leader Vladimir Putin over his intervention in Ukraine.” So far there is not much new in that assertion, published in an article by Reuters. We have known all along that, in addition to Orbán’s domestic policies, his relations with Russia were a serious concern to the United States and the European Union. What is new in this revelation is that Washington is apparently keeping an eye on the possible MOL-INA deal with Gazprom. According to the article, Chris Murphy, U.S. senator from Connecticut, was dispatched to Zagreb “to lobby the government … on the issue.” Another interesting piece of information gleaned from the article is that State Department official Amos J. Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs, met Hungarian Foreign Minister Péter Szijjártó and had a “productive meeting during Szijjártó’s recent visit to Washington about MOL’s stake, the South Stream, and Hungarian gas deliveries to Ukraine.”

All in all, it seems to me that Viktor Orbán is in over his head, especially with a foreign minister with no diplomatic experience. Szijjártó was an excellent spokesman for Viktor Orbán as the head of the “parrot commando,” but he is not qualified to be foreign minister, especially at such a delicate juncture.

It is hard to tell what Orbán’s next step will be. Fidesz media attacks on the United States are fiercer than ever, and its admiration of Russia is frightening. But more about that tomorrow.