Listening to Viktor Orbán in action

This morning after reading the transcript of a conversation between the prime minister and István Tarlós, the mayor of Budapest, I decided to devote today’s post to it. It’s a rare piece of “documentary evidence” about the inner workings of this government. After all, even historians decades hence will not be able to hear or read what transpired at cabinet meetings. In those terrible socialist-liberal days cabinet meetings were taped and transcribed. A hundred years ago there were at least short summaries of cabinet meetings. Now only the participants know what happened in these meetings.

Let’s start with the occasion for this conversation. Budapest, thanks to the “generosity” of the Orbán government, will be getting 150 sorely needed Mercedes-Benz Citaro buses. The first fifty arrived, and today they began their scheduled runs on certain bus lines. It was a few months ago that I read with some interest that Tarlós himself decided on the color of the buses. I looked at a number of Citaro buses from different cities, and I must say that the ones in Budapest will be unique all right.

MTI / Photo Szilárd Koszticsák

MTI / Photo Szilárd Koszticsák

The ceremony began with the usual Orbán speech about a strong Hungary and a strong Budapest. He expounded on the fantastic achievements of his government and its blessings on the capital. Three years ago the city was full of stories about a Nokia box stuffed with stolen money, but now the talk is about buses. Never mind that the story of the Nokia box was a figment of the imagination of a frightened witness against Miklós Hagyó, MSZP deputy mayor of the city.

After the brief ceremony the prime minister, the mayor, and other officials and newspapermen had a fairly lengthy ride from Heroes’ Square to Deák Square. Orbán and Tarlós stood in the aisle close to the bus driver, a woman. Népszava published an article headlined “Orbán can create laws for anything.”

Here is part of the conversation.

At the Kodály Körönd:

V.O.: Hey, István, do these houses still belong to the Ukrainians?

I. T.: I didn’t even know that they were owned by Ukrainians.

V.O.: I read something about Ukrainians….

I. T.: The Ballet Institute belongs to the Portuguese.

V.O.: It belongs to a Portuguese individual and I want it back.

I.T.:  Isn’t there some kind of law that it cannot be done for twenty years …?

V.O.: Why don’t we create one? The city could propose it and I will create one.

I.T.: One must have a law for it. A city ordinance is not enough.

V.O.: Initiate the enactment of such a law and I will create one.

I.T.: Fine with me.

V.O.: Just give me a proposal. I can’t figure it out instead of you.

I.T.: Mr. Prime Minister, could we turn in a couple of bills?

V.O.: Don’t try to be too greedy. We are talking about one. Turn it in!

I.T.: Okay, we will turn one in.

A jocular conversation between Prime Minister Viktor Orbán and Mayor István Tarlós Világgazdaság / Photo by Katalin Darnay

A jocular conversation between Prime Minister Viktor Orbán and Mayor István Tarlós  / Világgazdaság, Photo by Katalin Darnay

About facades that would need refurbishing:

I.T.: If we hadn’t built the Metro #4 we could have fixed up the facades in Districts V, VI, VII and VIII completely.

V.O.: I’ll tell you what Gábor Bethlen [Prince of Transylvania, 1580-1629] did in Transylvania. When he was elected prince he went around the country and saw that the houses were in disrepair. He declared that within one year every owner of a house must fix it up; otherwise they would see what happens.

I.T.: Will you give me such freedom?

V.O.: If it is a question of permission, we will think about it if I get a proposal from you…. Something must be done.

I.T.:  In May that proposal will be turned in.

At the Anker House:

I.T.: Look at this building. It has been in this deplorable state for the last twenty years.

V.O.: But why, István? You see this building every day…. Why do you allow it?

I.T.: The problem is that it is not ours.

V.O.: You are not the owner but you are the mayor. Order them to fix it up! [In the original: Rendeld el, hogy legyen rendben!]

I.T.: Zoli, let’s not forget that the prime minister would like an amendment to the municipality law. We will turn in a recommendation.

* * *

I know that this text sounds like something from The Onion. Alas, it’s not.

The Hungarian government’s newest business venture: Installing an e-toll system

György Matolcsy’s failed attempts at putting together a budget that doesn’t need almost immediate adjustment are legendary by now. The final budget accepted in December looked suspicious from the very beginning. Matolcsy included about 400 billion forints from taxes that were not in accordance with European Union laws. If the ruling of the European Court of Justice goes against Hungary, which seems likely, the companies that were so taxed must be reimbursed. So, there is already a 400 billion hole in the 2013 budget.

But that is just the beginning.  There are two other listed sources of revenue that most likely will not add a forint to the coffers of the Hungarian state. You may recall that the Orbán government hoped to receive 75 billion forints from an e-toll system that would require trucks over 3.5 tons to pay per kilometer fees on Hungarian roads. The system was supposed to be functional by July 1, 2013. Another 95 billion forints of value-added tax was supposed to be received by introducing a cash register network directly connected to the Hungarian equivalent of the Internal Revenue Service.

Well, it looks as if neither system will be in place by July 1. Here I would like to explain what went wrong with the e-toll system. Let’s start with the fundamentals. To work out such a complex system takes a lot of time. For example, in Germany, where the system functions well, the government began thinking about its introduction in 1998 but the law regarding the e-toll system was enacted only in 2002. The Germans hoped that the system would be up and running in 2003, but it was completed only in 2006. It is based on a satellite positioning system.  The Austrians also took their time planning and eventually setting up a system in 2003. In Hungary, by contrast, the decision was reached within a few months and by September companies were invited to tender bids for the new electronic toll road system. There were two bidders: T-Systems, a unit of Magyar Telekom, with a 53.4 billion forint bid and Getronics with a bid of 34.89 billion forints. The Hungarian government opted for the lower bid although Getronics had no prior experience in this area. On January 19, in large measure because of the hefty fines that would be levied if it did not complete the project on time, Getronics decided not to sign the contract. The Hungarian government, instead of turning to T-Systems, the under-bidder, decided to go it alone as a kind of “general contractor.”

Before pondering the wisdom of this move, let’s go back a bit in time to review Viktor Orbán’s attitude toward tolls in general. When he became prime minister in 1998 there was a functioning per kilometer system in place. It was the old-fashioned variety, with gates where one got a ticket which drivers paid once they left the toll road. Viktor Orbán in those days didn’t like that system. In its place the first Orbán government introduced a system based on prepaid fees that allowed the owner of the car to be on the road at certain times. It was called the “matrica” system. Matrica means sticker in Hungarian.

So, after 1998 all the “gates” on the toll roads were dismantled because Orbán maintained that “gates are for football fields and not for roads.” At that time there were altogether about 80 such gates on two highways (M1 and M3). To build them cost about 5 billion forints; it was another 1 billion to demolish them. I remember being horrified at the idea of demolishing these gates and substituting the “sticker” system that I found unfair. After all, a valid sticker cost the same whether the person drove 200 km or 20km on any given day. Moreover, ascertaining whether a driver had a valid sticker was haphazard; the state relied on spot checking.

Fourteen years later Orbán obviously changed his mind. As far as I’m concerned this would be fine if the e-toll system was professionally and competently designed and executed. But, according to rumor, the job will end up in the hands of companies whose management teams have close ties to the government. The rationale for choosing them will be based not on experience and competence but on political connections. Most people claim that in Hungary there is simply no company capable of creating an e-toll system that is up to snuff. Yet Orbán promised the pensioners in Vásárosnamény that on January 23 Hungary will have an e-toll system that will be all Hungarian.

Illustration to's article on the subject of e-toll

The illustration accompanying’s article on the subject of  an e-toll system, Hungarian style

The government’s self-confidence is not shaken. András Giró-Szász announced that Getronics’s pulling out is only “a minor detail.” Orbán assured his listeners that all the budgets he submitted in the past went through with flying colors and this will also be true of the 2013 budget. Well, flying colors is surely a bit of an exaggeration because we all remember how many times Matolcsy had to change the figures and how many new taxes had to be introduced to meet the EU’s deficit target.

A toll system that works only in Hungary and that is not compatible with those of other countries in the European Union would be a waste of money, according to experts. Apparently within a few years the European Union is planning to introduce a single system that will be based on satellite technology. There is another problem if a unique Hungarian system is introduced. There is a Union rule stating that trucks from EU countries cannot be stopped at borders. That means that inside of the vehicles there must be a piece of equipment that is able to record the traveled kilometers. In an incompatible system that wouldn’t work. Trucks would need a separate Hungarian recording system. In addition, European Union rules require that all information about time, route, etc. must be safely stored, and experts fear that any system that could be introduced in five months wouldn’t be sophisticated enough to ensure the safe storage of information.

All in all, most people are pretty certain that with the Hungarian state as “general contractor” the proposed e-toll system will be a flop. Earlier the Hungarian government wanted to have its own mobile service and announced its plan with great fanfare. Even though the new company existed only on paper, it received a frequency necessary for operation. The government even appointed a CEO. Everybody told the government that it was an unnecessary expense. There were three other providers and there was no reason to have a fourth company. As a blog writer said, “the catastrophe was predictable.” And it was. The blogger is certain that the same fate awaits the e-toll business of the Orbán government.