Ukraine

Assistant Undersecretary Victoria Nuland’s keynote address at the 2014 U.S.-Central Europe Strategy Forum

Yesterday Victoria Nuland,  assistant undersecretary for European and Eurasian Affairs, delivered the keynote address at a conference organized by the Center for European Policy Analysis’s U.S.-Central Europe Strategy Forum. Just as the conference was winding down, I published a short summary of  the relevant passages of her speech that were addressed in part to Viktor Orbán and his government. She mentioned neither Orbán nor Hungary by name, but everybody in the audience knew whom she was talking about.

I consider her speech to be so important that I decided to republish itAfter all, few people will bother to search the U.S. State Department’s website for the text of Nuland’s speech. The couple of sentences devoted to the Hungarian government’s harassment of NGOs by President Bill Clinton or the remark by President Obama on the same topic were limited in scope. On the other hand, Victoria Nuland’s short speech outlines U.S. positions on vital issues concerning the East-Central European region and contains criticism of an unnamed politician whose domestic and foreign policies fail to meet with the approval of the United States. This politician is described as one who, among other things, pushes illiberal democracy and cuts dirty energy deals. Only one politician fits the bill: Viktor Orbán. 

* * *

Keynote at the 2014 U.S.-Central Europe Strategy Forum

Victoria Nuland
Assistant Secretary, Bureau of European and Eurasian Affairs

stateThank you, Wess, for that introduction. It’s good to be here with you today with Minister Lajcak. Like me, Miro is still recovering from UNGA, the “World Cup” of diplomacy; or as we like to say at State: the diplomatic equivalent of speed dating. Our thanks to CEPA for your great work to strengthen our transatlantic bond with Central Europe. In just 9 years, CEPA has become the “go-to” think tank in Washington for those who care about a democratic, prosperous, secure Central Europe.

This fall, as we celebrate the 25th anniversary of the fall of the Berlin Wall, we are also reminded that two and a half decades ago, the countries of Central Europe inspired the world by seizing a moment of hope and transforming it into freedom and opportunity for tens of millions of people.

Across Central Europe, citizens stood up for the right to hold free elections; they built strong, independent institutions; and fostered civil society and a vibrant media.

They did the hard work of reforming their economies, stabilizing currencies, privatizing inefficient industries, opening up labor markets, and welcoming foreign investment. In short, they restored liberal democracy to the heart of the continent.

And they proved the skeptics wrong. In successive waves of NATO and EU enlargement 5, 10 and 15 years ago, they extended the boundaries of our Euro-Atlantic family and the values it represents.

We live in a better world because the countries of Central Europe chose the path of a Europe whole, free and at peace 25 years ago. But today that choice is under threat, and Central Europe is once again on the frontline in the fight to protect our security and values. And today, that fight is once again both external and internal.

Let’s look at these in turn.

First, the external threats: President Obama said in New York last week Russia’s aggression in Ukraine threatens to take us back to the days when large countries could trample small ones at will. Because the countries of Central Europe understand the danger better than most, almost all of them have been among the strongest and most generous in support of Ukraine’s right to choose its own future, and live in a more democratic, clean, free and prosperous country.

They have offered assistance and advice to Ukraine, security support, and even, as Slovakia has done, reversed the flow of gas to help fill Ukraine’s winter storage tanks. And most have been strong advocates inside the EU for the sanctions the Transatlantic community has put on Russia for its actions.

Today we must maintain that solidarity with Ukraine and unity within the Transatlantic community. Implementing sanctions isn’t easy and many countries are paying a steep price. We know that. But history shows that the cost of inaction and disunity in the face of a determined aggressor will be higher. The history of Central Europe itself teaches us that. So when leaders are tempted to make statements that tear at the fabric of our resolve, I would ask them to remember their own national history, and how they wished their neighbors had stood with them.

Ukraine is working hard to promote peace and change to meet its people’s expectations. It is fulfilling its commitments under the September 5 Minsk agreement—it passed amnesty legislation, a special status law for the east, and is working with Russia to demarcate the special status zone.

Now Russia and its proxies must do their part – withdraw their forces and all the heavy weapons that have flooded the east, restore Ukrainian sovereignty on the international border, withdraw heavy weapons there too, and return all the hostages—notably, including Nadiya Savchenko and Oleg Sentsov. When the Minsk agreement is fully implemented, we can and will begin to roll back some sanctions. It is in Russia’s hands when that day comes.

Every country in the CEPA space has made tough sacrifices. And as you stand with Ukraine, we stand with you. The United States’ commitment to NATO’s Article 5 is unwavering. As President Obama said at Tallinn, “we will defend our NATO Allies, and that means every Ally.” Our allies, in turn, are working to fulfill the pledge they made at Wales to reverse the decline in defense spending.

Even as we stand against Russia’s threat to Ukraine’s European choice, we must recognize that ISIL’s threat to our security, prosperity and values is also real, also immediate. Even in the Euro-Atlantic space, nobody’s immune. That’s why today the nations of Central Europe are joining the global coalition to degrade and destroy ISIL’s terrorism, contributing ammunition, training, humanitarian assistance and countering ISIL’s hateful ideology. All of us must do more to harden the Transatlantic space and make it a “no-go” zone for ISIL recruitment and finance.

When we pass anti-terror laws to keep our citizens from joining the fight, whether that fight is in Rakka or Luhansk, it is our values and way of life we are protecting: rule of law, state sovereignty, peace and security, individual human rights and dignity.

And just as we work together to defend our values externally, we must fortify them internally. In Central Europe today, I would argue, the internal threats to democracy and freedom are just as worrying. Across the region, the twin cancers of democratic backsliding and corruption are threatening the dream so many have worked for since 1989. And even as they reap the benefits of NATO and EU membership, we find leaders in the region who seem to have forgotten the values on which these institutions are based.

So today I ask their leaders: How can you sleep under your NATO Article 5 blanket at night while pushing “illiberal democracy” by day; whipping up nationalism; restricting free press; or demonizing civil society! I ask the same of those who shield crooked officials from prosecution; bypass parliament when convenient; or cut dirty deals that increase their countries’ dependence on one source of energy despite their stated policy of diversification.

As President Obama noted, oppressive governments are sharing “worst practices to weaken civil society.” They are creating wormholes that undermine their nations’ security, freedom and prosperity. The countries of Central Europe—through the EU and nationally—must remain vigilant. We can only be strong when we protect political pluralism, civil society and the right to dissent within our own borders; when our governments are clean, transparent and accountable to the people they serve.

For more than 20 years, Central Europe has been the canary in the coal mine for the promise of a Europe whole, free and at peace. The example set by the countries of this region has also inspired others around the world that they, too, can fight for democracy, free markets, rule of law and human dignity. As the President said in Warsaw in June, “The blessings of liberty must be earned and renewed by every generation – including our own.” We must renew our commitment today – to our citizens and to each other; at home and around the world. We are stronger together, and many around the world who crave the same freedom we enjoy are depending on us.

* * * 

What was the reaction in Budapest to this very harsh criticism of Viktor Orbán and his regime? The spokeswoman of the Hungarian Ministry of Trade and Foreign Affairs told journalists that, according to Péter Szijjártó, “the people of Central Europe have suffered under communist dictatorship and fought for their freedom and for the reunification of Europe.” The region is inhabited by freedom-loving people who surely wouldn’t allow their freedom to be curtailed. Hungary looks upon the United States as a friend and “our alliance is rock solid.”

Interestingly enough, the speech was also the topic of political debate in Romania. According to the Romanian Social Democratic Party, Victoria Nuland’s remarks were addressed only to the Hungarian prime minister. Prime Minister Victor Ponta stated that it was surely not Romania that harassed the NGOs. It was the Hungarian government that limited freedom of the media. It was Hungary that stopped sending gas to Ukraine, and it is Viktor Orbán who has a unique relationship with Vladimir Putin. Romania supports Moldova and Ukraine and helps its neighbors with their energy needs. President Traian Băsescu, a political opponent of Victor Ponta, thinks otherwise. He is certain that Nuland was also talking about Romania, especially when she referred to corruption as a threat to national security. 

In my opinion the bulk of the criticism was directed at Hungary, but corruption unfortunately is everywhere in this part of the world. 

Apparently Péter Szijjártó will meet Victoria Nuland during his forthcoming visit to Washington. I would not like to be in his shoes. Victoria Nuland is one tough lady.

Hungary stops supplying gas to Ukraine and makes its own gas deal with Russia

The news of the day is Hungary’s decision to stop the supply of gas to Ukraine despite its pledge to assist its beleaguered neighbor. Although the AFP news service assumes that the decision came after “threats from Moscow,” I have a different take on the matter. To make my case I have to go back a few weeks in time.

It is true that Russia was playing games with its gas supply to Poland and Romania, but Hungary was in no way affected by these Russian measures, most likely because of the cozy relationship that exists between Putin and Orbán. On the contrary, in the last few months large amounts of gas arrived in the country from Russia. Currently, the storage facilities are 60% full, and even larger amounts of natural gas will come from Russia in the next few months. Poland indeed had to temporarily stop its supply of gas to Ukraine on September 10, only to resume its operations two days later when Russia assured Poland that it would send an adequate supply of gas to the country in the future. Romania began receiving less than the usual amount of gas on September 15.

Instead of worrying about natural gas from Russia, on September 18 a very upbeat article appeared in Magyar Nemzet telling its readers that “we can be the gas center of Europe.” The article reported that two days earlier Miklós Seszták, minister of national development, conducted negotiations with Anatoly Yanovsky, Russian deputy minister for energy affairs, concerning the storage of 500 million cubic meters of Russian gas in Hungary “to facilitate the supply of Europe with gas in case of irregular transit shipments through Ukraine.” These plans are not new.  They were apparently first discussed in October 2012 when Aleksey Miller, CEO of Gazprom, had a meeting with Viktor Orbán in Budapest. However, the precondition for such a deal was the nationalization of the storage facilities. The Hungarian government subsequently purchased them from the German company, E.ON, at an incredibly high price. Although auditors warned the government about the pitfalls of the deal, Orbán insisted. It looked as if he did not care about the price. Now we know why.

Yanovsky had barely left Hungary when Aleksey Miller arrived in Budapest. The meeting of Miller and Orbán was kept secret from the Hungarian people, who read about it on Gazprom’s website. This is not the first time that we learn about important meetings and bilateral negotiations from the media of countries for whom close relations with Hungary, a member of the European Union, are important but who are not exactly friends of the West. The Hungarian government would rather not inform the world about its dealings with such countries as Iran, Belorussia, Azerbaijan, and Kazakhstan. According to Gazprom, “the talks were focused on the issues of reliable and uninterrupted gas supplies in the coming winter period. The parties paid special attention to the implementation of the South Stream project and noted that it was progressing on schedule.”

Source: Gazprom.com

Source: Gazprom.com

This morning, three days after the Miller-Orbán meeting, Viktor Orbán announced that Hungary would indefinitely suspend supplying Ukraine with natural gas. According to Itar-Tass “the decision was made to meet the growing domestic demand for gas,” FGSZ, the Hungarian company operating the pipeline, said. Yet MTI reported today that even Serbia might be able to receive gas from the Hungarian storage facilities. So, surely, there is no shortage of gas in Hungary. The European Union is anything but happy about the suspension. Helen Kearns, a spokeswoman for the European Commission, in an answer to a reporter’s question on Hungary’s unilateral suspension of the gas supply to Ukraine, said that “the message from the Commission is very clear: we expect all member states to facilitate reverse flows as agreed by the European Council.” Naturally, Naftogaz, the Ukrainian gas company, also urged its “Hungarian partners to respect their contractual obligations” and said the Hungarian decision “goes against the core principles of the European Union single energy market.”

After delivering his usual Friday morning radio interview Viktor Orbán left for Berehove (Beregszász), in the area of Ukraine south of the Carpathian Mountains officially called Zakarpattia Oblast, to deliver a speech at the Hungarian-language college situated in the town where about half of the population is Hungarian speaking. Altogether there are three smaller territorial units within the oblast where there are significant Hungarian populations: in the uzhhorodskyi raion (33.4%), in vynohradiv raion (26.2%), and in the area around Berehove where they are actually in the majority (76.1%). Altogether there are about 120,00 Hungarians out of a total population of 1,254,614. The distribution of Hungarians in the oblast can be seen here.

Orbán indicated in his early morning interview today that Hungary will support Hungarians in the neighboring countries who demand autonomy. Although he did not specifically mention the Hungarian diaspora in Ukraine, he was obviously also talking about them. This was not the first reference to possible autonomy for Hungarians in this region of Ukraine. At the outbreak of the Russo-Ukrainian crisis Orbán already mentioned such a demand. He made it clear, again not for the first time, that his main concern in this very serious international crisis is the fate of the Hungarian minority. He promised his audience that Hungary will not do anything that would harm his Hungarian brethren, which I found interesting in light of the decision to cut the flow of gas from Hungary to Ukraine.

While Viktor Orbán was in Berehove, representatives of the European Union, Russia, and Ukraine got together to come up with an energy deal that would ensure the supply of Russian gas to EU members and Ukraine over the winter. In return, Ukraine would repay $3.1 billion of its debt to Russia.  The first installment, $2 billion, would be due by the end of October and the rest by the end of December. If Russia agrees to this deal, it would avert an immediate crisis, although it would not resolve the deeper dispute over what price Kiev should pay for past and future deliveries. The Ukrainian government earlier filed suit with the Stockholm Arbitration Court against Russia for making it overpay for gas since 2010. A decision may be reached by next year.

On the one hand, Ukraine seems to be happy that, after so many unsuccessful attempts, there is hope of an agreement but, on the other hand, it is unhappy that the price of Russian gas “is dependent on the decisions of the Russian government.” According to Kyiv Post, “Ukraine will under no circumstances recall its suit from the Stockholm Arbitration Court.”

If this deal goes through, as it seems that it will, perhaps it was unnecessary for Hungary to unilaterally and abruptly stop the flow of gas to Ukraine. By this decision Orbán further emphasized his pro-Russian sympathies and undoubtedly further alienated himself from Western governments.

Hungarian citizenship offers escape route from troubled Ukraine

The Hungarian citizenship scandal is naturally growing by the hour, especially since today the second installment of Index’s revelations became public. Before I go into some of the details, let me first tell you about the official reaction of Fidesz and specifically of Zsolt Semjén, whose only job seems to be the “unification of the nation.” He claimed yesterday that the process of granting citizenship has been carefully monitored all along by the administration, which if necessary calls on the police and the Hungarian secret service to uncover fraud. The attack against the government’s citizenship program is most likely the work of  foreign powers who want to dissuade Hungarians from applying for Hungarian citizenship. I assume these foreign powers are Slovakia, Ukraine, Romania, and Serbia. Semjén also had a few friendly words for his own compatriots: he warned them that cooperation with foreign secret service agencies is treason. So, Bálint Szalai of Index had best start preparing for a long jail sentence! The same fate might also befall those politicians who dare inquire about the irregularities.

Today Fidesz called on the “left” to refrain from inflaming the public “against Hungarians living outside the homeland.” The statement claimed that the news that broke about the thousands of phony new citizens was actually orchestrated by the opposition parties. It is “part of a campaign against dual citizenship” that the politicians of MSZP and DK opposed already in 2004.

Although the government and Fidesz try to minimize the gravity of the situation, if the news turns out to be true and the details are accurate, the European Union might be alarmed by these developments. As Attila Ara-Kovács, head of DK’s foreign policy cabinet, pointed out this morning on ATV’s Start, one reason that Romania has so much difficulty joining the Schengen nations is its earlier decision to offer Romanian citizenship to residents of Moldova. If the estimates of the number of people in Ukraine who now hold Hungarian citizenship legally or illegally as well as those who may apply for citizenship in the near future are at all accurate, it might mean an eventual exodus of as many as 120,000-150,000 people from Ukraine where the current political and military situation is grave. As the Ukrainian-Hungarian Miklós Kovács, whom I quoted yesterday, said today in an interview with György Bolgár of Klubrádió, a newly granted Hungarian citizenship is like Noah’s Ark for Ukrainians. These people are convinced that a flood is coming that will engulf the country in the form of the Russian army. In this case, they will have a means of escape.

Hungarian citizenship is Noah's Ark for Ukrainian citizens

For the time being there are no comparable problems in Serbia, but the country is in terrible financial straits and it looks as if Serbia will not be able to join the European Union any time soon. There are 250,000 Hungarians living in Serbia, in addition to all those non-Hungarians who can easily find an ancestor who was a citizen of Hungary before 1920. A fair number of those who took out Hungarian citizenship plan to use the Hungarian passport as a way to get to Western Europe.

In his second article Bálint Szalai gave more details about how the whole scheme works. As I wrote yesterday, right after January 2011 the government set out to acquire as many new Fidesz-friendly citizens as possible. Semjén appeared from time to time to triumphantly announce the latest figures. As it stands now, 654,534 people have applied for Hungarian citizenship since the beginning of the program.

The Index article has a breakdown of these applicants by country. Perhaps most shocking are the figures for Ukraine whose Hungarian population was 150,000 in 2001, a number that most likely has decreased since. Yet 91,275 people applied for and about 80,000 received Hungarian citizenship. The numbers for Serbia are also high: 124,811 out of a Hungarian population of about 250,000.  The Romanian figures are modest in comparison: 420,345  applied for citizenship out of a Hungarian population of 1,230,000.

Altogether only 20,867 applications have been rejected since January 1, 2011. These rejections most likely took place after March 2013 when the rules were tightened somewhat. Prior to that date even village notaries or mayors were allowed to grant citizenship, and we know they could easily be bribed. After March 2013 only government offices of járások, sub-units of counties, could handle citizenship matters. Instead of many thousands of offices, an applicant could get a passport at only 300 locations. That meant that the price of Hungarian citizenship went up considerably. The village notary might be satisfied with 500 euros, the officials higher up wanted more. And with tighter scrutiny corrupt officials could no longer approve every case that came to them. They had to be selective. Nonetheless, according to the article, people close to this business venture estimate that 30% of these phony cases still go through.

The Index articles obviously hit home in government circles. Suddenly the authorities became vigilant. The Kemecsei Járási Hivatal (Szabolcs-Szatmár-Bereg) just informed the county police headquarters that a twenty-one-year-old Ukrainian man tried to get citizenship in their office although he does not speak or understand Hungarian. The poor fellow picked the wrong time.

There might be a lull in the sale of Hungarian citizenship, but unless the whole procedure is tightened up the problem cannot be solved. Tightening up means abandoning the “simplified” procedure that was adopted for the sole reason of getting votes for the Fidesz government. Citizenship is a serious matter; it should involve a thorough background check that takes time. I doubt, however, that the present government is willing to be that scrupulous. Their “unification of nation” factory has a fast-moving citizenship assembly line with virtually no quality control. And hence the fraud will continue. It might just cost a little more money for the hopefuls.

The lucrative citizenship business: Hungarian passports for Russians and Ukrainians

Today Index came out with the first of a two-part article on the mass fraud surrounding the acquisition of simplified Hungarian citizenship. The article claims that a group of Ukrainians with the active assistance of corrupt Hungarian officials has been procuring Hungarian citizenship for foreigners who are ineligible: they have no Hungarian ancestors and don’t know the language on even a rudimentary level. The article claims that their numbers might be in the tens of thousands.

The Index article made a real splash and MSZP, as is its wont, again demanded the resignation of Zsolt Semjén, deputy prime minister, whose job is the recruitment of as many Fidesz voters from the neighboring countries as possible.

People have a short memory because the news is not all that new. More than two years ago Hungarian papers reported that “Hungarian citizenship is for sale in Ukraine.” It was discovered at that time that there was a website (http://visa-vengriya.com/) that specializes in the Hungarian citizenship business. In fact, the website is still active and it still runs the ad: “Hungarian citizenship in 2 months! Payment upon receipt of the documents. Our company offers service assistance obtaining Hungarian citizenship within 2 months. Payment service occurs after you get your hands on the documents and become a citizen of Hungary. Contact us to learn more about the procedure and leave a request for more information.”

The website indicated that applicants need have no Hungarian ancestry, did not have to learn Hungarian, and did not even have to appear in person to have an interview or receive their citizenship. Of course, extra services like forging documents to invent a Hungarian grandpa or grandma will cost extra, anywhere between 6,000 and 25,000 euros depending on how complicated the task is. Grateful clients sang the praises of the organizers.

In May 2013, in an interview with  Átlátszó.hu, Miklós Kovács, president of the Kárpátaljai Magyar Kulturális Szövetség (KMKSZ), openly talked about the corruption of Hungarian authorities who hand in hand with the “Ukrainian mafia” handed out citizenship to anyone who was ready to pay them off. Kovács most likely underestimated the price when he thought that for a mere 500-1,000 euros someone could be the happy owner of a Hungarian citizenship document. A Subcarpathian Hungarian-language site claimed to know at that time that a Ukrainian citizen could get Hungarian citizenship for 5,000 euros, but if the person is from another former Soviet republic the price is higher: 9,000 euros. Lawyers took care of missing Hungarian ancestors. All that was done through “legal” channels.

allampolgarsagIn November 2013 Nick Thorpe of BBC, reporting from Subotica, Serbia, described his encounter with a brand new Hungarian citizen who did not seem to know a word of Hungarian. Or at least he looked blank when Thorpe greeted him in Hungarian. “He does understand it—he just doesn’t speak it very well yet,” said the man’s female companion. Thorpe found 50 people working furiously to handle the demand for Hungarian citizenship. They were receiving 800 calls a day. And every day 100 new Hungarian citizens emerged from the consulate in Subotica. The BBC article is entitled “Hungary creating new mass of EU citizens.” To be more precise, Hungary is creating future citizens of Germany, the United Kingdom, the Netherlands, Austria, and Sweden, the countries preferred by East European migrants.

Thus today’s revelations by Index are not new, but they are definitely the most thoroughly researched. According to Bálint Szalai, the journalist who investigated the case, Ukrainians and Russians gather around Deák tér in downtown Pest to negotiate with Ukrainian and Hungarian “businessmen” over the details of becoming Hungarian citizens. Most of them speak no language other than Ukrainian or Russian, but last year the journalist lucked out: he found an English speaker who revealed that his father had already received Hungarian citizenship and now works in Germany. The rest of the family is waiting for the swearing-in ceremony. They will be Hungarian citizens within a couple of hours. Then they will follow him.

The citizenship law enacted in a great hurry in 2010 demands only one ancestor who was a Hungarian citizen before 1920 or between 1940 and 1945 and some minimal knowledge of the language. The citizenship business began in earnest in Ukraine. Ukraine forbade dual citizenship, and therefore Ukrainian-Hungarians were afraid to ask for a visa to Hungary to handle their citizenship applications in person. Therefore, paid agents represented the applicants in some Hungarian village’s town hall where they paid off the local officials. The price of citizenship was between 5,000 and 30,000 euros. Szalai describes one case where, in a village near Kisvárda, the mayor received 200 applications at once. He demanded 1,000 euros for each, which he got. It took him 20 minutes to sign them.

Soon enough it became known that through the Ukrainian network a person could easily receive Hungarian citizenship without much scrutiny. Applications were pouring in with forged birth certificates of non-existent ancestors. Shortly afterward Russians became interested in this fantastic deal. First, the Russians had to acquire Ukrainian identity in order to claim Hungarian ancestors. It would be hard for a Russian to prove that his ancestors were Hungarians. Companies and lawyers specialized in making Russians first Ukrainians and then Hungarians. The citizenship business is apparently still thriving.

The reason that the news made greater waves this time around is because it appeared on a widely read internet site. According to opinion polls, something like 75% of the population are not keen on the citizenship law as it now exists: people don’t like the idea that their fate can be determined by votes coming from abroad. And in fact, in the last election, if we can believe the information given out by the government, the two-thirds majority was determined by the 100,000 mostly Transylvanian voters. Simply put, Viktor Orbán must thank the Hungarians in Romania for his practically unlimited power. Reading that tens of thousands of foreigners who have never had anything to do with Hungary are all over the world now with a Hungarian passport only adds to their anger. The government’s reaction? Tamás Wenczel, undersecretary in charge of “nation policy” (nemzetpolitika) under the watchful eye of Jámos Lázár, immediately threatened Index with a law suit. He did not deny that there have been “irregularities.” However, “lately several measures were adopted that would preclude the possibility of abuse.” Wenczel did not elaborate on the measures, but as long as every village town hall can grant citizenship to foreign nationals the abuse will continue and with it the thriving business on both sides of the border.

Viktor Orbán at the 2014 NATO Summit

The NATO summit in Newport, Wales is over and, according to Prime Minister Viktor Orbán, “from the Hungarian point of view it was a great success.” So, let’s see what the Hungarian prime minister considers to be a great success in view of his and other leading Fidesz politicians’ earlier pronouncements on the Russian-Ukrainian conflict.

NATO approved wide-ranging plans to strengthen its defenses on its eastern flanks in order to reassure Poland and the Baltic states that they have the full backing of NATO in case of Russian aggression. The plan includes the creation of a rapid action force temporarily stationed in Estonia but eventually to be moved to Poland. This rapid action force will include several thousand ground troops ready to be deployed. It will be supported by air, sea, and special forces. This is not as much as Poland initially wanted, which was a permanent NATO base in the region, but even Polish Prime Minister Donald Tusk was satisfied with the current plan. According to details released and reported by Reuters, the first units of the force are expected to total around 5,000 troops that will be ready to move in two days.

Viktor Orbán spoke to Hungarian reporters after the summit ended. He announced that, just like other NATO members, Hungary will increase its military spending. As I noted yesterday, at the moment Hungary spends only 0.88% of its GDP on its armed forces; the country agreed to the compulsory minimum of 2.0%. If Hungary today decided to spend that much on the military it would mean an additional 360 billion forints, which at the moment it does not have. Orbán also announced that Hungary’s security can be guaranteed “only within the framework of  NATO” and that he therefore views “the decision of the Hungarian people when in a referendum they voted for membership in NATO” as wise. He said that Hungary would purchase modern weaponry and prepare the Pápa air base to receive large strategic carriers. He also said that “NATO troops will appear in the region of Central Europe,” which may mean that they will also be stationed in Hungary. By the end of the year each country will develop its own plans in case “there is a direct military threat” to these countries. The threat Orbán is talking about is obviously Russia.

Viktor Orbán, the faithful ally, withNATO Secretary-General Anders Fogh Rasmussen and Prime Minister David Cameron

Viktor Orbán, the faithful ally, with NATO Secretary-General Anders Fogh Rasmussen and Prime Minister David Cameron

Realizing the discrepancy between his current enthusiasm for greater military security for Hungary and his earlier statements on the Russian-Ukrainian conflict, he tried to convince his audience that earlier he was only against sanctions, which is “an entirely different question” and independent of the decisions reached at the summit. However, Orbán not only spoke up against the sanctions but stated that as far as he is concerned the conflict for Hungary is an “economic” issue only. He made it clear at that time that he understands the anxiety of Poland and the Baltic states but Hungary’s situation is different. In plain language, as far as he is concerned Hungary’s old and faithful friend Poland can go down the drain, he doesn’t really care. It looks as if the Poles interpreted his words similarly. Zsolt Németh, former undersecretary of the ministry under János Martonyi and now chairman of the parliamentary committee on foreign affairs, talked about “a serious challenge to bilateral relations” between Poland and Hungary in Krynica in an economic forum. The Ukrainian issue should not be allowed to divide the two countries, he emphasized.

While today Viktor Orbán sang the praises of NATO, only a couple of days ago Tibor Navracsics, foreign minister at the moment, expressed doubts about the western commitment to Hungary. In an interview with Boris Kalnoky of Die Welt, he specifically talked about the West letting Hungary down in 1945 and 1956. Moreover, when asked whether Hungary would like to have NATO troops on its soil, he answered that Hungary, unlike the Baltic states, is not threatened by anyone. And recall László Kövér’s outlandish attack only two days ago on Ukraine and on the western powers who use her as a pawn to separate Russia from Europe. One cannot dismiss Kövér’s remarks as unimportant. After all, Kövér is the closest associate and friend of Viktor Orbán and the president of the Hungarian parliament. Apparently, he is the only person in Fidesz who can give Orbán a piece of his mind and who can actually influence him. So, it is hard to know what Viktor Orbán really thinks about NATO and Hungary’s relation to it.

The pressure is intense on Orbán as a result of the Russian aggression and the western reaction to it. Although the Russian “separatists” have ostensibly agreed to a ceasefire, there is no question that in the last few weeks a full-fledged war was waged in the southeastern districts of Ukraine. And everybody knows that that war was unleashed by Vladimir Putin. NATO’s and the EU’s reaction to Russian aggression was rapid and resolute. As a result, it looks as if Viktor Orbán’s “eastern opening” and his flirtation with Putin’s Russia is over. Orbán will have to shelve his grandiose plans to have Hungary play the role of mediator between East and West. In the future it will be impossible to play that game if he wants Hungary to stay in the European Union, which he clearly needs for financial reasons. Now the question is whether the European Union will allow him to build his “illiberal state” on its “liberal” money.

The Hungarian far right and Russia

There has been a lot of discussion about the Russian sympathies of the extreme right parties in Europe. I have written extensively about Jobbik’s close ties with Russia. I’m sure that many readers remember the strange story of Béla Kovács, Jobbik EP MP, who, by the way, was just barred from the territory of Ukraine by the Ukrainian government. The reason? Most likely Kovács’s participation in the group that found everything in perfect order in the Crimean elections. Gábor Vona also visited Moscow, accompanied by Béla Kovács, and met important Russian political leaders.

The same affinity for Russia holds for France’s National Front, whose leader, Marine Le Pen, visited Moscow last summer and met similarly high-ranking politicians of the Russian Duma. Golden Dawn, the Greek fascist party, also has close connections to Moscow from where it receives financial assistance. When the Greek government imprisoned Nikos Michaloliakos, the party’s leader, Alexander Dugin, the author of Putin’s “Eurasian” ideology, actually sent him a letter in prison. Just to remind people: Gábor Vona also met Dugin in Moscow. And then there is Bulgaria’s far-right party, Ataka, that also has links to the Russian embassy.

All these parties and other right-wing fringe organizations support Russia’s annexation of Crimea and stand by Russia in the Russian-Ukrainian conflict. They are all against the European Union and the United States. Most of them are also anti-Semitic, definitely anti-Israel, pro-Palestinian and Iranian.

A previously lesser-known right-wing portal in Hungary, Hídfő (Bridgehead), has recently come into prominence. It was this site that first broke the story that Hungary is secretly supplying tanks to the Ukrainian army. One of their readers saw a tank being transported by train toward Debrecen, which the editors of the portal found suspicious. Soon enough word spread that the tanks were destined for Ukraine. The Hungarian ministry of defense explained that the tanks had been sold to a Czech businessman who deals in used military equipment.

Later the Russian foreign ministry published an official statement stating that “weapons supplied to Ukraine by the EU member-countries … violate legally binding obligations–the Arms Trade Treaty.” The Russian foreign ministry was fairly well-informed on the details: “Hungary’s Defense Ministry is supplying Ukraine with armored vehicles, including T-72 tanks, through a ‘proxy agency.'” The Hungarian Foreign Ministry denied the Russian claim as “groundless.”

As a result of its revelation Hídfő, which apparently has a readership of 3,000/day, became internationally known.  And naturally that aroused the interest of investigative journalists in Atlatszo.hu, one of those NGOs that receive financial support from the Norwegian Civic Fund. They discovered a few interesting items about the organization that is likely behind Hídfő–Magyar Nemzeti Arcvonal, a Hungarist organization that came into being in 1989. Originally it was called Magyar Nemzetiszocialista Akciócsoportok (National Socialist Action Groups) . It considers itself to be the legitimate successor to Ferenc Szálasi’s Arrow Cross Party.

Hídfő, as far as I could ascertain, was established on September 25, 2012, or at least that is the date when the first article appeared. The portal is full of anti-Israeli, anti-American, anti-European Union articles while it is fiercely pro-Russian, pro-Palestinian, and pro-Iranian. Their Russian connections must be substantial. While internet sites normally invite readers to express their satisfaction on Twitter and Facebook, Hídfő has only Vkontakte, a kind of Russian Facebook.

Hídfő is well informed on the exact military situation in Eastern Ukraine

Hídfő is well informed on the precise military situation in “New Russia”

An interesting article, originally published on tarsadalmivirtus.lapunk.hu, appeared in Hídfő in 2013. If one can believe the introduction, a single person writes all the articles; he sees himself as a great observer and analyst of international affairs. He also looks upon the European Union as an enemy that until now has been unable to grab only two countries: Ukraine and Belarus.  But the EU has plans concerning Ukraine. If it manages to get hold of Ukraine, its influence in Europe would be complete while “Russia would be squeezed into the Asian region.” European pressure is great on Ukraine and in case of a civil war “it is possible that Moscow will try to save the Russian population and the country will fall into several pieces.” This, however, will not satisfy the European Union. The final step of the evil European Union will be “the execution of Russia.” Romania will incorporate Moldova while the West will incite the Muslims of Russia to revolt. Eventually Russia will fall apart without any outside military action. Our man seems to know that “the Russian military leadership” has already worked out a strategy to prevent such an outcome. It includes the support of Russia nationalists in Ukraine, to be followed by “tremendous pressure on the Baltic states.” Whoever our man is, he predicted the events on the Russian-Ukrainian border fairly accurately.

Another far-right site is “Jövőnk” (Our Future). This Hungarist site has been in existence since January 2009. It would be fascinating to learn more about this group because the site suggests that they have plenty of money. They publish articles not only in Hungarian but also in English, French, German, Russian, Romanian, Slovak, and Serbian, which is a very expensive undertaking. The people behind Jövőnk are so enthusiastically pro-Russian that their articles could have been written in some Russian government office in Moscow and translated into Hungarian. This particular page will give you an idea about the editors’ infatuation with Vladimir Putin. In one of the articles there are enthusiastic lines about Putin building a Eurasian Empire, and not for a moment does the author worry about the implications of such an empire for his own country, Hungary.

A strange, inscrutable world about which we still know very little. We especially know very little about the nature of these groups’ ties to Russia and Iran. One can only hope that the Hungarian secret service is keeping an eye on these people, although I have my doubts about both the talent and the will of the security agents. When one reads articles in these extremist websites about the decline of the West and glowing descriptions of the East, one has the awful feeling that Viktor Orbán has quite a bit in common with these fellows. A rather frightening thought.

Hungary is in a difficult diplomatic bind: The “Orbán doctrine” is dead

This morning 168 Óra ran the headline “The Orbán doctrine has collapsed after three days.” The reason is the Russian “incursion” into Ukrainian territory. After that, said Árpád Székely, former Hungarian ambassador to Moscow, there will be neither Paks nor the Southern Stream. Székely actually welcomes the first consequence, a dubious deal between the Hungarian and the Russian government to build a new nuclear reactor in Hungary, but he is sorry about the likelihood of scrapping the Southern Stream project that would have supplied gas to the Balkans, Hungary, and Austria.

While high-level negotiations in the UN, NATO, and EU are going on over the Russo-Ukrainian conflict, I had to think about one of the many fallacies Viktor Orbán presented us with during his pep talk to the Hungarian ambassadors only four days ago. In his speech he indicated that as far as he is concerned old-fashioned diplomacy is passé. “Not that classical diplomacy has lost its magic and beauty” but “we must acknowledge the realities of the economic age in which we live.” Well, the Russo-Ukrainian conflict must be solved by old fashioned diplomacy, and Hungary’s newly reorganized foreign ministry is ill prepared for the task. Moreover, its leaders are constrained by the prime minister’s unorthodox ideas on diplomacy. Orbán’s Hungary is in a bind.

I should note in passing that German-Hungarian relations have cooled considerably. Earlier, I wrote about a warning from Michael Roth, undersecretary of the German foreign ministry, that in his government’s point of view “Hungary is going in the wrong direction.” Since then an even more detailed and stronger statement was signed by Michael Roth, undersecretary in charge of European Affairs at the German Foreign Ministry, and his colleague Tomáš Prouza in the Czech Foreign Ministry. They warned that “Europe is more than a market.” It is a community of shared values.

According to Hungarian sources, Hungarian diplomats have been trying for some time to entice Chancellor Angela Merkel to visit Hungary for the annual German-Hungarian Forum. After all, this is the twenty-fifth anniversary of the German refugees’ safe passage to Austria thanks to the action of the Hungarian government in 1989. If she could not come, they at least hoped for a visit by the new foreign minister, Frank-Walter Steinmeier. Well, it seems that Budapest will have to be satisfied with an assistant undersecretary as the representative of the German government. The highest ranking German participant will be Reinhold Gall, social democratic minister of the interior of Baden-Württemberg.

Now, to return to the current diplomatic challenge. After the failure of the meeting between Vladimir Putin and Petro Poroshenko in Belarus, several thousand Russian troops crossed the Russian-Ukrainian border. Subsequently Prime Minister Arseny Yatsenyuk announced that his government will introduce a proposal in parliament to change the non-aligned status of the country and to request membership in the North Atlantic Treaty Organization. Some observers immediately announced that Ukrainian admission to NATO was very unlikely. However, NATO chief Anders Fogh Rasmussen made a statement today in Brussels, saying: “I’m not going to interfere in political discussions in Ukraine. But let me remind you of NATO’s decision at the Bucharest summit in 2008, according to which Ukraine ‘will become a member of NATO’ provided of course, Ukraine so wishes and fulfills the necessary criteria.” A strong warning for Russia. Putin often stressed that Russia will not tolerate a NATO presence on Ukrainian soil.

Meanwhile, EU foreign ministers are recommending tougher sanctions against Russia. They gathered in Milan today for an informal meeting to discuss the Ukrainian crisis. Tibor Navracsics represented Hungary in Milan, but I could find no report on his position in the Council of Foreign Ministers. We know that Germany, the Netherlands, Sweden, Latvia, and Denmark were strongly in support of tougher action.

"German

German Foreign Minister Walter Steinmeier is arriving at the informal meeting of EU foreign ministers in Milan

Tomorrow the European Council will meet again to decide on the President of the European Union and the EU Foreign Affairs Chief. According to the latest intelligence, the next President of the European Union will be most likely Donald Tusk, prime minister of Poland.

Tusk’s government has been among the most hawkish in Europe over the issue of Ukraine. Just today the Polish government announced that it will allow the plane of Russian Defense Minister Sergey Shoygu to fly over its territory only if the plane changes its status from military to civilian. Earlier his plane was barred altogether from Polish air space. Russia was not very happy. Its foreign ministry declared that Poland’s closing its air space to Shoygu’s plane is “a major violation of norms and ethics of the communication between states.”

Today three of the four members of the Visegrád4 (Poland, Czech Republic, Slovakia, and Hungary) issued statements about the Russian incursion. Poland’s foreign ministry said that it regards the incursion of Russian troops into the southern regions of the Donetsk province “as actions that fulfill the attributes of aggression, as defined in UN documents–Resolution 3314 of the United Nations General Assembly.”

The Czech statement was equally strongly worded. “The Czech Republic considers the incursion of the armed forces of the Russian Federation into the territory of eastern and southeastern Ukraine a fundamental threat to peace and stability of all of Europe.” It called on Russia “to immediately withdraw its troops from the Ukrainian territory.”

The silence from Slovakia was deafening.

Hungary chose an intermediate position and released the following statement: “We are closely monitoring and evaluating the situation on the ground, and we are in contact with our EU and NATO allies. A confirmed incursion of  Russian regular military units on Ukrainian territory would gravely escalate the crisis. In line with our consistently expressed earlier position, we emphasise that only a political process can lend a sustainable solution to the present crisis and therefore we support all diplomatic efforts to this end. The upcoming extraordinary European Council meeting and the informal meeting of the EU foreign ministers offer good opportunities for harmonizing the European position on this matter.”

Two of the opposition parties, Együtt-PM and DK, called on the government to stand by Ukraine’s independence and territorial integrity. The former also wants the Hungarian government to suspend preparations for the expansion of the Paks Nuclear Power Plant while Russian troops remain on Ukrainian soil. The party also asked Orbán to use his good offices with Putin to convince the Russian leader to withdraw his troops from Ukraine.

DK wants to call together the parliamentary committees on foreign affairs, national security, and defense and to have the government prepare a statement that condemns Russian military action against Ukraine. In addition, Tibor Navracsics should call in the Russian ambassador to Hungary to convey to him Hungary’s condemnation of Russian aggression. Naturally, none of these suggestions or demands will be considered by the Orbán government.

On the other hand, I believe that Viktor Orbán will quietly vote with the majority on all the issues that will be discussed at tomorrow’s European Council meeting only to go home and report on the excellent ideas he gave to his colleagues about how to solve the Ukrainian crisis.

Francis Fukuyama on Viktor Orbán’s Hungary

I cannot promise that this will be my last post on Viktor Orbán’s  infamous speech and its reverberations. As so many people have already said, in that speech delivered in Tusnádfürdő/Băile Tușnad, Romania, Orbán may have crossed the Rubicon. Until now only his critics called him a wannabe dictator, but now he himself made clear that in the last four years he has been creating an illiberal state in Hungary. For good measure, he repeated the adjective four times. For foreign consumption the official English translation of the speech tried to avoid the term. The translator used the word “illiberal” only once. Surely by that time the staff of the Prime Minister’s Office must have realized that Orbán had gone too far and tried to minimize the damage.

Even the subdued English translation, however, couldn’t paper over the dire import of the speech. The message the speech conveyed was frightening in and of itself, but given the tense situation in Ukraine Orbán’s words sounded even more ominous. Perhaps it was he who shot himself in the foot and not the European Union which decided to punish Russia with economic sanctions, as he claimed in his customary Friday morning interview.

I have been collecting every important article pertaining to Orbán’s ideas about the future of Hungary under his leadership. Most of them are in English or German and therefore easily accessible. Here I would like to summarize an important interview with Francis Fukuyama, the well-known political scientist. The interview appeared today in Magyar Narancs.

First a few words about Francis Fukuyama, who is currently the Olivier Nomellini Senior Fellow at the Institute for International Studies and a resident at the Center on Democracy, Development, and the Rule of Law at Stanford University. Prior to 2000 he was a professor and director of the International Development program at the School of Advanced International Studies at Johns Hopkins University.

The Hungarian edition of Francis Fukuyama's The End of History and the Last Man

The Hungarian edition of Francis Fukuyama’s The End of History and the Last Man

While I was perusing Fukuyama’s biography I was struck by his varied interests and expertise. He received his B.A. in classics from Cornell University. He went on to do graduate work in comparative literature at Yale University, during which time he spent six months in Paris where he studied under Roland Barthes and Jacques Derrida. It was only after his stint at Yale that he finally decided on political science, in which he received his Ph.D. at Harvard.

His first book, The End of History and the Last Man (1992), made him famous overnight. What did he mean by that title? With the collapse of the Soviet Union and its empire, he argued that the struggle between ideologies was largely over, and he predicted the triumph of liberalism.

Fukuyama is interested in Hungarian political developments. A few days after the Orbán speech, he wrote a tweet expressing his dismay over Viktor Orbán’s ideas on the illiberal state. He said: “Hard to believe that a European leader would openly call for illiberal democracy as Viktor Orbán has done.”

I guess it was this tweet that prompted the editors of Magyar Narancs to approach Fukuyama for an interview. So, for those of you who don’t know Hungarian here is a loosely translated summary of the interview.

* * *

The first question was about how seriously we have to take Viktor Orbán’s words. Did he simply use them as a rhetorical device or is the situation more serious than that?

Fukuyama was inclined to consider the message of the speech as more than rhetoric. These were not empty words. Here is a European political leader who openly admits that he became an admirer of authoritarian states. These words will sooner or later have consequences. Such a case is unprecedented. He violates the consensus in the western meaning of the word that is the essence of good governance.

The journalist of Magyar Narancs wanted to know what Fukuyama thinks of Hungary’s place on a scale between democracy and dictatorship. The answer shows that Fukuyama follows the events in Hungary. In his opinion, the concept of  illiberal democracy describes pretty well everything that is happening in Hungary today. We can talk about democracy in the sense that a large majority of the Hungarian people voted for Orbán’s government, but at the same time democracy means a great deal more than an election won with a large majority. In normal circumstances the rule of law, the system of checks and balances, the guarantee of  minority rights are part and parcel of democracy. Orbán and his friends destroyed all that. What Fukuyama is most worried about is that this kind of thinking is spreading in Europe. But other European leaders who entertain similar ideas are quiet about their thoughts on the subject. Orbán was the only one who openly trumpeted his own illiberal system.

The conversation then turned to the weaknesses of the left both in Hungary and in the United States. Fukuyama expressed his surprise that the 2008 economic crisis electrified the right, in the United States the Tea Party, instead of the left as one would have expected.

After this brief detour the conversation returned to Orbán’s fascination with the East, countries like China, India, Turkey, Russia, and even Kazakhstan. Fukuyama admitted that it doesn’t matter how hard he tries to find an answer to the efficacy of such an orientation for Hungary, he cannot come up with anything. Hungary’s aim should be convergence towards countries like Germany, the Netherlands or Scandinavia. But Russia and Kazakhstan? Yes, these countries have immense energy reserves, but otherwise what keeps these countries together is sheer corruption. It is most likely the case that Orbán is guided by short-term interests, but “that game cannot be won without serious consequences.”

Fukuyama was then asked what he thinks of China’s prospects. Everybody, he replied, wants an “opening” toward that country. In his view, China already has serious economic and political problems. What keeps the regime going is economic development, but that accelerated growth cannot be maintained in the long run.

The next topic was whether a welfare state can exist without democracy. Fukuyama brought up the example of Singapore as an authoritarian regime that is economically very successful. But he pointed out that in Singapore the president can stay in office for only two five-year terms, and politicians obey the law mostly as a result of the inherited British common law system of justice. Clearly, although Fukuyama did not mention it, he is aware of Viktor Orbán’s plans for staying in power for a very long time, if necessary by the ruse of becoming president following the example of Putin and Erdoğan.

The next question was a really pessimistic one: Could Hungary end up being an outright dictatorship? Fukuyama did not answer this question directly. Instead he talked about the weaknesses in the European Union’s structure that fail to give Brussels any effective instrument to deal with a politician like Viktor Orbán. He noted, however, that Angela Merkel and the European People’s Party have shielded Orbán in the past because of the party’s selfish interests. Perhaps now, after this speech, they will wake up and, instead of playing party politics, will rethink their policies toward Hungary.

Another question concerned the role of the United States in the resurgence of illiberalism. Fukuyama replied that the reaction to 9/11–the invasion of Iraq–was a huge mistake and caused a loss of American prestige. And the economic crisis gave the opponents of democracy an opportunity to show the U.S. and Europe as failed economic and political systems. These mistakes can be corrected. “But the damage done to the image of the United States as a strong democratic model will be more difficult to restore.”

Finally, there had to be a question on Fukuyama’s famous book, The End of History. In that book he proclaimed the final victory of democracy. Is he still that sanguine about its prospects? His answer was that if one looked around the world in the 1970s and 1980s there were no more than 35-40 democratic countries. Today they number 110-120. Yes, there is China and Russia, but democratic institutions are resilient. The autocratic models of China or Russia don’t offer long-term sustainable models.

* * *

Hungarians always complain that foreigners know so little about their country. There are many who keep telling us that Hungary is too insignificant and that the influential countries pay little or no attention to it. But this is no longer the case. First of all, people are increasingly interested in what’s going on in Hungary because they have awakened to the fact that something went very wrong in that country. Second, we shouldn’t think that Hungary is insignificant in international affairs. No, its geopolitical position can make the country an important player, as the present situation amply demonstrates. There is a war going on next door in Ukraine and while the EU stands by Ukraine, Viktor Orbán is trying to weaken its resolve. The small Hungarian minority seems to concern the Hungarian government more than the Russian encroachment on a neighboring state. Just yesterday Tibor Navracsics raised his voice in defense of the Hungarian minority.

It is hard to tell what the next step of the European Union will be, but I am sure that, just as Fukuyama predicted, Orbán’s speech will have serious consequences.

Viktor Orbán between Russia and Brussels

In Budapest there is the usual Friday political turmoil since it’s the day that Viktor Orbán holds a well-rehearsed conversation with a journalist of the Hungarian state radio. I no longer call Magyar Televízió and Magyar Rádió public television and radio stations since in the last four years both have become mouthpieces of the government. Just like in the Kádár regime.

Normally the world does not pay much attention to these early morning chats, but today was different. By 04:45 EST Reuters reported on what Viktor Orbán had to say about the European Union’s sanctions against Russia. After the leaders of the Union decided on tough economic sanctions against Russia, Orbán publicly voiced his opposition to the plan. Referring to the Russian ban on agricultural products coming from the European Union, Canada, the United States, and Australia, he announced that the sanctions policy pursued by the West “causes more harm to us than to Russia…. In politics, this is called shooting oneself in the foot.” He continued: “I will do my utmost–of course we are all aware of Hungary’s weight, so the possibilities are clear–but I am looking for partners to change the EU’s sanctions policy.”

This move of Orbán may not have come at the best time. Just yesterday political observers noticed that Putin adopted a softer tone during a visit to the Crimea that was not carried live on Russian television. Moreover, the sanctions have just begun to bite, but even before there were signs of financial strain as a result of the annexation of the Crimea. Desperate for cash, the Russian government dipped into the national pension fund which means taking away from every Russian two years’ worth of social security payments. Although Putin’s personal popularity is extraordinarily high, according to one survey only 7-12% of the population are ready to make financial sacrifices for the sake of Russia’s policies in Ukraine.

Inflation is up 9% this year while there is no economic growth. The government is contemplating a new 3% sales tax to plug some holes in the federal budget. There are already shortages in the supermarkets. Forty percent of Russia’s food supply comes from abroad, and Russian consumers will be unhappy very soon. In the last twenty years or so they became accustomed to a great variety of products from all over the world and they have no intention of returning to Soviet times of limited supplies and inferior quality. Putin’s propaganda that the ban on Western food is just a means of “supporting the product manufacturers of the fatherland” will wear thin soon enough.

The temporary loss of the Russian market for Hungarian agriculture is less significant than the Hungarian government wants the world to believe. Orbán put in a bid for compensation and therefore, I assume, he exaggerates the potential losses for Hungarian farmers. Reuters in its report claims that Russia is Hungary’s largest trading partner outside the European Union, with exports worth 2.55 billion euros in 2013. However, this figure may be wrong. According to a Hungarian source, that figure is 70 billion forints, which is only 223 million euros at today’s exchange rate. So, the Russian sanctions against Hungary will not be as painful as Orbán would like to portray them. On the other hand, Western sanctions against Russia are more serious from Hungary’s point of view than the Russian sanctions against Hungary, Zsolt Kerner claims. One of the Russian banks affected by the sanctions is the state-owned Vnesneconombank (Bank for Development and Foreign Economic Affairs), which owns part of Dunaferr and is also the bank through which the Russian loan to build a new nuclear power plant in Paks will be administered.

Orbán’s attack on the Russian policy of the European Union is also ill-timed.  Finland’s president, Sauli Niinistö, is currently in Moscow to negotiate with Putin. Although Niinistö is not an official envoy of the European Union, he was in contact with western colleagues. The European Union has been seeking a diplomatic solution to the crisis, and they don’t need Viktor Orbán’s good offices as a messenger between Moscow and Brussels.

While Niinistö was negotiating with Putin in Moscow, the EU foreign ministers held an emergency meeting in Brussels, discussing among other things the Ukrainian situation. Of course, I have no idea what position Tibor Navracsics took at this meeting, but I assume he was instructed to oppose sanctions and perhaps suggest bilateral discussions with Moscow. Whatever the Hungarian position was, according to the agreed-upon statement “any unilateral military actions on the part of the Russian Federation in Ukraine under any pretext, including humanitarian, will be considered by the European Union as a blatant violation of international law.” And, most importantly, “the Council  … remains ready to consider further steps, in light of the evolution of the situation on the ground.” According to diplomats, the new measures would target Russian sales of sovereign debt, its ability to raise funding through syndicated bank loans, and high-tech machine imports.

I may add here that Viktor Orbán’s old friend David Cameron, with whom he saw eye to eye on the nomination of Jean-Claude Juncker to be president of the European Commission, is unlikely to be on his side on the issue of EU sanctions against Russia. Great Britain is one of the harshest critics of Russia’s destabilizing efforts in the region.

By now Orbán has one staunch ally and that is Robert Fico, the prime minister of Slovakia who announced his opposition to sanctions already yesterday. However, it seems that the Slovak leadership is divided. Andrej Kiska, who recently defeated Fico to become Slovakia’s president, came down on the side of sanctions. He said that “when words aren’t enough, economic sanctions can be used to bear greater pressure on countries which seek to expand, dictate or threaten.”

Orbán’s comment that the sanctions policy hurts the European Union more than it does Russia and that EU policy is in fact a move by which the EU shoots itself in the foot was not left unanswered. Lithuania’s foreign minister, Linas Linkevicius, upon arriving for the EU foreign ministers meeting in Brussels, retorted that it was better to shoot oneself in the foot than to let oneself be shot in the head. Naturally, Lithuania politicians are a great deal more worried about Russian intentions than is Orbán, who looks upon his country as a kind of bridge between Moscow and Brussels.

What kind of sanctions? Let the man eat his sandwich in piece Source: Posteemes /Photo: Urmas Nemvalts

What kinds of sanctions? Let the man eat his sandwich in peace.
Source: Postimees / Urmas Nemvalts

Estonia, which is in the same boat as Lithuania and Latvia, has lately changed its until now pro-Hungarian attitude. One reason for that change is Orbán’s overly cozy relations with Putin’s Russia. But there is another. While Hungary just opened a new embassy in Ecuador’s Quito, it unceremoniously closed its embassy in Tallinn, the capital of Estonia. Estonia is not only a fellow EU member, but Estonians speak a Finno-Ugric language. This linguistic connection has always been the source of a special bond between Estonia and Hungary, just as in the case of Finland. The Estonians not surprisingly took offense and closed their own embassy in Budapest.

And now the largest and most prestigious Estonian newspaper, Postimees, published an editorial with the title: “A delicate European problem called Viktor Orbán.” Here is a pull quote from the English-language editorial: “A headache indeed – the increasingly autocracy-minded statements and the ever tightening cooperation with Putin’s Russia by Hungarian Prime Minister Viktor Orbán. The issue being: how united is Europe in its values, firstly, and secondly in bridling the warlike neighbouring Kremlin. Obviously, the latter is searching for weak links in Europe. Alas, the still economically troubled Hungary and its populist-type anti-Brussels PM provide for one.”

Orbán’s fame is spreading, but it’s not exactly the kind that Hungarians can be proud of.

János Kornai: Threatening dangers

The Peterson Institute for International Relations (USA) and the School of Public Policy at the Central European University (Hungary) held a conference on “Transition in Perspective: 25 Years after the Fall of Communism” in Budapest on May 6 and 7, 2014. Among the attendees were Leszek Balcerowicz, Václav Klaus, Anatoly Chubais, and many other well-known economic policymakers and academic economists of the post-socialist transition period. This is the text of János Kornai’s keynote address.

INTRODUCTION

I would really like to give a cheerful and optimistic talk. I was optimistic when I was working on my book The Road to a Free Economy in 1989.  I undertook comprehensive evaluations of the post-socialist transformation later, on various occasions, and although all the essays pointed out the problems, they always ended on a note of optimism. Even today, there are several developments that may give grounds for satisfaction: in many countries in Central-Eastern Europe and in the Baltic regions dictatorship has been replaced by democracy, the command economy by the market economy, socialism by capitalism. My sentiments, however, are overcast by two depressing developments.

David Levine: Business & financial figures, economists /New York Review of Books

David Levine: Business & financial figures, economists /New York Review of Books

I am Hungarian – my mind can barely stop processing the uninterrupted flow of gloomy news for a second.  Hungary was moving forward on the path of democratic development for 20 years. People were tormented by various troubles, however, it was to be hoped that sooner or later we would manage to overcome these too. But the situation changed for the worse in 2010, when the political forces leading the country performed a U-turn. Instead of the strengthening of democracy we saw the abolition or drastic restriction of numerous fundamental institutions of democracy. Instead of private property being reinforced, the security of private property came under attack. Instead of continuing decentralization, the tendency to centralize was revived.

What has taken place here in four years and what will, in all likelihood, continue for the next four is a unique phenomenon: Hungary is the first – and so far the only – one  among the countries that chose the democratic path in 1989 – 90 which made a U-turn. This one example, however, is enough to prove that such a change can happen. The path on which we started in 1989 is not necessarily a one-way road; the changes, of historical significance, are not irreversible. Quite the contrary – and this is one of the terrible aspects of the Hungarian state of affairs -, the situation after the U-turn may become irreversible for a very long time. Democracy, especially in countries where it has not yet taken deep root, might be unable to defend itself. It may be overpowered if it is attacked unscrupulously and with Machiavellian determination.

The other shadow over our celebration is cast by the Ukrainian situation. Nobody can tell for sure what the months to come will bring. But one thing has already happened, and this is the de facto annexation of the Crimean peninsula. One of the fundamental principles of the Accords signed in Helsinki in 1975 was the sanctity of the status quo: the state borders valid at that time were not to be changed for any reason whatsoever. The Crimean peninsula became part of Ukraine twenty years before the Helsinki Accords. One of the basic principles of the Accords was overthrown in March 2014, and the world took note of this and responded only by wagging a disapproving finger and introducing mild reprisals. Like the Hungarian changes, this constitutes a powerful precedent, according to which it is possible to change a lawful border using military force on some pretext or another, and for this purpose the most obvious excuse is ethnic.

All the things I wish to say tonight I will discuss in the light of these two precedent-forming events.

ALTERNATIVE POLITICAL REGIMES

Let us imagine the map of the world and let us look at the Eastern half. We shall use three colors. Let’s cover the new democracies with green, the color of hope. I call them the post-communist democracies. Although many of their features are identical with those of traditional Western democracies, their political cultures still bear the marks of the communist past.

East of this stretches a very wide zone, which I would cover with pale red: this is the zone of post-communist autocracies. Their prototype is Russia. After 1989 the transition towards a market economy was launched there as well. At the very beginning a democratic constitutional structure appeared : parliamentary elections among competing parties, debates between a government relying on its parliamentary majority and the opposition. The rule of democracy, however, proved to be a very brief episode. Following a few stormy years Putin seized power and a new political structure emerged. This has restored certain aspects of the communist system, especially the great power of the state, but it also differs from that in some significant ways. The number one leader (whatever his official legal status might be) is invested with an enormous amount of power and rules over a strictly centralized hierarchical state and political apparatus, but he does not possess the absolute monopoly over power of a real dictator. There are opposition parties, parliamentary elections do take place, although it is true that the opposition is very weak and doomed to lose the elections from the start. There are newspapers, radio and television stations and internet portals that are independent of the ruling group – their voice, however, is weak. This type of autocracy is halfway between the full-fledged Western-type democracy and a totalitarian dictatorship. What mainly distinguishes it from the latter is the fact that, although the regime is very repressive, it does not use the most brutal means: the arrest and confinement in cruel concentration camps or physical liquidation en masse of the representatives of alternative political movements. The other great difference from the communist system is that the autocratic political regime is connected to an economy in which private ownership is dominant. The ruling political powers hold important positions in the economy, both in the still significant state-owned and the very broad private sectors.  The larger part of the economy works according to the behavioral regularities of capitalism

Of the 15 successor states of the former Soviet Union, three Baltic countries have become relatively stable post-communist democracies. I would place Belarus and the Central-Asian republics together with Russia in the post-communist autocracy category. Now, 25 years after 1989, it can be stated that the situation in the post-communist autocratic countries is basically unchanged; there is absolutely no sign of the iron hand relaxing its grip.

Ukraine’s position is uncertain, and has actually now become especially problematic; over the past 25 years it has sometimes displayed the signs of post-communist democracy; at other times those of post-communist autocracy.

Let us go back to our map. To the east and south of the region of autocracies we can see China and Vietnam. These embody a third type, which I shall call post-communist dictatorship. Let us cover this region with a deep red color. The economy resembles, in many respects the Putin-type regime. Although the state sector has remained very significant, the larger part of economic resources are now in private ownership. Here too the political and economic worlds are closely intertwined. The significant difference lies in the fact that in China and Vietnam the ruling political parties have never for a moment given up their own power monopolies. The Chinese and Vietnamese communist leaders did a thorough analysis of the Gorbachev era. The series of events which started with glasnost and ended with the disintegration of the country, the loss of super-power status and the liquidation of political monopoly have been haunting them like horror dreams. Anything but that! The Chinese and Vietnamese leaders have made an unshakeable decision never to open the floodgates of free political movements.

The Chinese and Vietnamese governing parties are only ‘communist’ parties in name: nowadays they have absolutely nothing to do with the Marxist-Leninist program which intended to abolish capitalism. Lenin would classify these political formations as bourgeois. The Chinese and Vietnamese ruling parties accept capitalism in practice, they cooperate with it and profit from it.The case of China and Vietnam clearly demonstrate that capitalism is compatible with dictatorship. It is true that there is no democracy without capitalism, but this statement cannot be reversed. Capitalism can exist and function for a very long time without democracy. In spite of the hopes of many Western analysts, there are no signs of any tendency for the heavy-handed regimes to loosen their grasp.

I will not go on to discuss the situation of certain small countries: North Korea, Cuba and Venezuela. Instead, I will refer back briefly to the introduction of my lecture. In 2010 Hungary changed color: it turned from green into pale red. It is not a post-communist democracy anymore, but a post-communist autocracy. As I have said, this is a first and so-far unique event. But here I ask the participants of this conference: is there no danger that other countries which are still in the green zone will make a similar U-turn?

NATIONALISM

Historical developments show, that the problem of state borders and the relationships between ethnic groups within the borders is one of the most important issues of the post-socialist transformation; it is no less important than the form of political government and the radical transformation of property relations.

The Soviet Union disintegrated into 15 successor states. Czechoslovakia was divided into two. These two changes took place peacefully. The disintegration of Yugoslavia, on the other hand, was followed by bloody wars. Not long after the declaration of independence a war broke out between two successor states of the Soviet Union, Azerbaijan and Armenia. Fighting is now virtually continuous in the southern regions of today’s Russia. And now here we are in the middle of Ukrainian internal strife and the Ukrainian-Russian conflict.

We have divided the post-communist region into three zones on the basis of the defining features of their political structure. What the countries in all three zones share, however, is the existence of ethnic conflict. The intensity of conflicts varies. Relatively speaking, the ‘mildest’ form is nationalist rhetoric: blustering about the superiority of the majority ethnic group, vilifying ethnic minorities, or rabble-rousing against neighboring peoples. A graver situation is when nationalist, racist arrogance is manifested in deeds as well. It can happen in discrimination affecting schooling and the distribution of work places, or in the limitation of the free use and official acknowledgement of a minority language. Unfortunately, the most criminal forms of nationalism also take place. Although infrequently, violent behavior driven by racist motives occurs, such as the desecration of Jewish cemeteries and synagogues, and even Roma murders.

There is not a single country in the post-communist region which is immune to the epidemic of nationalism. There are degrees, of course: at one end of the scale we find the quietly thrown anti-Semitic or anti-Roma terms of abuse in ‘gentlemanly’ style. Next degree: hateful, cruel words. Next, more frightening degree: beating of members of the minority, threatening parades of uniformed commandos. And at the other end of the scale: murder. Who knows where the incitement to nationalism will lead?

DANGERS OF RADICALIZATION AND EXPANSION

In all three zones and every country of the post-communist region significant economic problems make themselves felt. Naturally, the constellation of difficulties, the relative gravity of the different issues varies from country to country. However, there are certain problems which are fairly general.

Post-communist transition has its winners and losers. Large numbers of people lost their jobs, unemployment became chronic. In many countries the inequality of income and wealth distribution escalated. Millions live in abject poverty, while others who have suddenly lined their own pockets enjoy their wealth in front of them. This explains why so many people think of capitalism with annoyance or hate. Few of them expect help from the extreme Left: the chances of a communist restoration are negligible. The number of those, on the other hand, who turn to the extreme Right, is significant. The ears of the disappointed, the losers and the needy quickly pick up the message of the populist demagoguery against profit, banks, and multinational companies.

The atmosphere of dissatisfaction is susceptible to the slogans of nationalism. “Life would be better if we lived again in an empire as large as it was during the tsar’s time” – they say in Russia. “If only we could get back those resource-rich parts of the country that we were stolen from us at Trianon in 1920!” – they say in Hungary.

So, what we have is a mass below, receptive to nationalism and slogans of “law and order”. And we have political parties and movements above which sense the opportunities provided by the angry mood of the masses. A vicious, self-inciting cycle evolves from disappointment in democracy, the attempts at anti-democratic governance, nationalism, and economic dissatisfaction. There are government intentions and mass sentiments at work which mutually reinforce each other.

The holders of power in Russia are anxiously observing how the growth of production is slowing down, how it has almost reached stagnation. This is when attention must be diverted from the problems of the economy towards ‘great national issues’ such as the plight of fellow-Russians living on the other side of the Western borders. Nationalism gives birth to an expansion drive. And this is no longer a domestic issue, but a tendency whose effect crosses national borders and threatens peace.

I have mentioned Russia because the looming monster of Russian expansion has appeared in our immediate vicinity. But we must also speak of China. The idea of nationalism is growing stronger there too. The rate of growth has fallen spectacularly. The inequality of income is extreme. There is a great deal of audible dissatisfaction about the fact that the rise in the living standards is far behind the growth of production.  Here too, nationalism proves to be the best way of diverting attention. Local protests are crushed not by eliminating economic problems, but by police measures. The people in charge are iron-fisted fighters for ‘order’.

Although in my imaginary map post-communist autocracies and post-communist dictatorships were given two different colors, in terms of nationalism, the tendency towards expansion and the heavy-handed restriction of democratic rights they share many features. These create a strong kinship between them, bonds which are strong enough even after the shared beliefs in Marxist-Leninist ideology disappeared. Most likely this political kinship also plays a part in the fact that so often the international political actions of the countries in the pale red and deep red zones correspond.  At important sessions of the United Nations they vote the same way, they support or turn down the same interventions. They have no joint center, but it is as if they were marching to the same drum on crucial issues. The axis of repressive powers opposing Western democracies is in the making – if I may borrow the expression “Axis” from the vocabulary of the period preceding the Second World War, when it was the name of the Alliance between Germany, Italy and Japan.

CLOSING THOUGHTS

I am no Cassandra: I am not blessed or cursed with the ability to foresee the future. All I can say is that present-day events recall historical memories in me.

Hungarian current events remind me of the end of the Weimar Republic. There is great economic dissatisfaction. Millions of patriotic Germans feel humiliated by the terms of peace. More and more join the Nazi side. In the meantime, the anti-Hitler forces are at each others’ throats. In the 1933 multi-party election, which are conducted lawfully, Hitler’s party emerges victorious, but without a parliamentary majority. And then the moderate right-wing Centrum party is ready to enter a governing coalition with the Nazis … I shall stop this story here.

Thinking about the Ukrainian events Hitler’s first conquests come to my mind: the occupation of the Saarland, then the annexation of Austria. The aggression is based on ethnic reasoning: the territories in question are inhabited by Germans. Then comes the Munich agreement; Chamberlain’s joyful announcement: we have saved the peace at the price of Czechoslovak territories inhabited by Sudeten Germans being annexed to the German empire. Soon comes the dismemberment of Czechoslovakia. Then the plan to conquer Danzig, referring to ethnic reasoning… Here I shall leave this story too.

Who knows how the history-writers of the distant future will view the conference on Ukraine recently held in Geneva. Was it merely an insignificant diplomatic event? Or did it give birth to a new, albeit minor, Munich agreement, encouraging further aggression?

It was George Kennan who in 1946 pronounced the principle of containment. It is time to declare this principle again. Now it is not the spreading of communist principles, the Stalinist expansion, but the spread of nationalist principles, the expansion of post-communist autocracies and dictatorships, that need to be contained.

It is not for me to work out the methods by which the new principle of containment could be applied in practice. I can say this in the plural: we academic researchers are not fit for this task. I regret, but I cannot present the present company with a plan of action.

Let me finish here. I am just not able to end my lecture with words of reassurance. My intention was to alarm you, to unsettle you, to arouse in you the sense of threatening dangers.