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Though the European Elections don’t really matter much but the distribution of votes are still indicative of the support Hungarian voters give to the various political parties.
According to this poll, Fidesz seems to have increased support compared to the April 6 elections… and that was already biiiig… 🙂 We’re going to have the large sample survey this Sunday.
Posted by Leto مؤدّب on 22/05/2014
https://politicsinhungary.wordpress.com/2014/05/22/popular-support/
Orban is a rare political leader in Europe. He is quite popular, but he is in a balancing act. To his left are the Europeanists, who see all his actions as a repudiation of liberal democracy. On the right is a fascist party that won 20 percent in the last election. Between these two forces, Hungary could tear itself apart. It is in precisely this situation that Weimar Germany failed. Caught between left and right, the center was too weak to hold. Orban is trying to do what Horthy did: strengthen his power over the state and the state’s power over society. He is attacked from the left for violating the principles of liberal democracy and Europe. He is attacked from the right for remaining a tool of the European Union and the Jews. The left believes he is secretly of the right and his protestations are simply a cover. The right believes he is secretly a Europeanist and that his protestations are simply a cover.
Now we add to this the fact that Hungary must make decisions concerning Ukraine. Orban knows that Hungary is not in a position to make decisions by itself. He has therefore made a range of statements, including condemning Russia, opposing sanctions and proposing that the Ukrainian region directly east of Hungary, and once Hungarian, be granted more autonomy. In the end, these statements are unimportant. They do not affect the international system but allow him to balance a bit.
Orban knows what Horthy did as well. Hungary, going up against both Germany and Russia, needs to be very subtle. Hungary is already facing Germany’s policy toward liberal integration within the European Union, which fundamentally contradicts Hungary’s concept of an independent state economy. Hungary is already facing Germany’s policies that undermine Hungary’s economic and social well-being. Orban’s strategy is to create an economy with maximum distance from Europe without breaking with it, and one in which the state exerts its power. This is not what the Germans want to see.
Now, Hungary is also facing a Germany that is not in a position to support Hungary against Russia. He is potentially facing a Russia that will return to Hungary’s eastern border. He is also faced with a growing domestic right wing and a declining but vocal left. It is much like Horthy’s problem. Domestically, he has strong support and powerful institutions. He can exercise power domestically. But Hungary has only 9 million people, and external forces can easily overwhelm it. His room for maneuvering is limited.
I think Orban anticipated this as he saw the European Union flounder earlier in the decade. He saw the fragmentation and the rise of bitterness on all sides. He constructed a regime that appalled the left, which thought that without Orban, it would all return to the way it was before, rather than realizing that it might open the door to the further right. He constructed a regime that would limit the right’s sense of exclusion without giving it real power.
Russia’s re-emergence followed from this. Here, Orban has no neat solution. Even if Hungary were to join a Polish-Romanian alliance, he would have no confidence that this could block Russian power. For that to happen, a major power must lend its support. With Germany out of the game, that leaves the United States. But if the United States enters the fray, it will not happen soon, and it will be even later before its role is decisive. Therefore he must be flexible. And the more international flexibility he must show, the more internal pressures there will be.
For Horthy, the international pressure finally overwhelmed him, and the German occupation led to a catastrophe that unleashed the right, devastated the Jews and led to a Russian invasion and occupation that lasted half a century. But how many lives did Horthy save by collaborating with Germany? He bought time, if nothing else.
Hungarian history is marked by heroic disasters. The liberal revolutions that failed across Europe in 1848 and failed in Hungary in 1956 were glorious and pointless. Horthy was unwilling to make pointless gestures. The international situation at the moment is far from defined, and the threat to Hungary is unclear, but Orban clearly has no desire to make heroic gestures. Internally he is increasing his power constantly, and that gives him freedom to act internationally. But the one thing he will not grant is clarity. Clarity ties you down, and Hungary has learned to keep its options open.
Orban isn’t Horthy by any means, but their situations are similar. Hungary is a country of enormous cultivation and fury. It is surrounded by disappointments that can become dangers. Europe is not what it promised it would be. Russia is not what Europeans expected it to be. Within and without the country, the best Orban can do is balance, and those who balance survive but are frequently reviled. What Hungary could be in 2005 is not the Hungary it can be today. Any Hungarian leader who wished to avoid disaster would have to face this. Indeed, Europeans across the continent are facing the fact that the world they expected to live in is gone and what has replaced it, inside and outside of their countries, is different and dangerous.
by George Friedman, the Chairman of Stratfor. The full article can be read here.
I don’t agree with everything Friedman writes but certainly it’s a very interesting analysis on Hungary’s situation.
Posted by Leto مؤدّب on 21/05/2014
https://politicsinhungary.wordpress.com/2014/05/21/orban-and-horthy/
Prime Minister Orbán took his prime ministerial oath on the 10th of May and this event could be regarded as the birth of the third Orbán government. He and his Fidesz party promised to “carry on” (“folytatjuk!”) . So what is it they’d carry on with, say, regarding the economy? Let’s recap what the “unorthodox policies” of the second Orbán government, which seems to result in Hungary’s well-visible economic recovery, actually meant.
When, despite all the economic success the first Orbán government achieved, they were voted down by the Hungarian voters in 2002, the Socialist-left-liberal governments resorted to accumulating foreign debt in order to manage the huge budget deficit problems their inappropriate economic policies caused. So even though the first Orbán government decreased the dept-to-GDP ratio to 54% from around 65%, when the international economic crisis broke out in 2008, the Hungarian economy was already in a very weak position: the dept-to-GDP ratio was nearing 80% … and the biggest part of this debt was foreign debt in foreign currencies. Bankruptcy was imminent and taking out an IMF-EU loan was the only way to avoid it. Despite all the postcommunist/left-liberal propaganda, the truth is the terms of the loan were far from attractive: it came with thick neo-liberal strings attached: sell out your assets and tax people, not multinationals and banks. Eventually when the second Orbán government took power in 2010, there was hardly any economic elbowroom for them. The IMF loan was a carefully set-up political booby-trap in essence. If Orbán had followed the IMF path then his political credibility would have evaporated in no time and the postcommunists would have returned yet again in a few years, just like the Communists returned as Socialists in 1994. Charging forward was the only way. The actual budget deficit was more like 7% in 2010 instead of 4% what the Socialist Bajnai government put on paper. Paper doesn’t blush…
It quickly became evident in 2010 that the IMF and the EU had no intention of renegotiating the terms of the loan their sidekicks left behind and they demanded the usual austerity measures from Orbán they always do: tax hikes for people, cuts in benefits and public services, selling state assets. Cutting links with the IMF was practically inevitable if Orbán wanted to go in a different direction. He did so, accompanied with a political rhetoric of “economic freedom fight”. The phrase “freedom fight” goes down well with the Hungarian soul even if we’ve had many freedom fights and none of them were successful (at least directly). Orbán bravely refused to accept the terms for Hungary’s having the IMF safety net despite the huge political, and also economic, pressure put on him. This policy alone made the already bad foreign press of Hungary even worse. We became a “dictatorship” very quickly.
When Europe’s economic storm drastically worsened in 2011, Orbán bravely “pulled a Turkey”: he invited the IMF back to the negotiating table… and he started playing for time just like Turkey did once. He kept negotiation hopes alive for more than a year, making the markets believe that sooner or later Hungary would have the IMF safety net back. In the meantime it became evident that the IMF, certainly also because of their political motives, was not willing to make concessions. In fact, they wanted to punish Hungary hard for Orbán’s policies, probably as a way of deterring other European countries from following similar policies. During this economic storm EU/IMF had the prime ministers of Italy and Greece replaced with their stooges and by the end of 2011, the beginning of 2012 they tried to do the same thing in Hungary. That was when half a million Hungarians took to the streets of Budapest on the freezing cold day of the 23rd of January, 2012 and they said a big no to this attempt. Polls also showed Fidesz and Orbán had a strong enough political support, so he took the leap: Hungary sent IMF home … and eventually paid the IMF loan back one year earlier in order to send the message to the markets that Hungary had enough self-confidence to follow its own course. The other very important milestone of success was when EU eventually, very reluctantly indeed, had to let Hungary out of the Excessive Deficit Procedure in 2013. This further increased market confidence in Hungary.
Hungary’s budget deficit as a percentage of GDP
In order to balance the budget and to stop the increase of public debt, without resorting to “classic” austerity measures, two major things were needed: taxing banks and multinational companies like the supermarket chains and effectively nationalizing the compulsory private pension funds.
It was beyond any doubt Orbán had the support of the Hungarian public for the former. There was/is public anger towards the banks because of the role they played in the economic crisis, especially because of all the hardship the widespread foreign currency based mortgages caused for hundreds of thousands of people when the exchange rate of the Hungarian Forint plummeted during the crisis. People were also well aware that the banks had been heavily subsidized from taxpayers’ money before. Let me note that eventually Orbán’s example of taxing the banks in order to manage the crisis was copied by a number of Western governments, even though the financial sector in Hungary was hit harder this way than in other countries. The stable and strong (supermajority in the Parliament!) political support, together with some domestic media support, allowed Orbán to push this unprecedented move through. However Hungary’s press image in Europe and in the US got even worse and darker. Hungary became a totalitarian dictatorship, a Nazi one. No doubt at all that the heavily taxed influential foreign financial institutions played their own important role in this process.
A Le Monde cartoon
The Hungarian Central Bank (MNB) was another important battlefield. The bank chairman, András Simor, who was nominated and elected by the Socialist-left-liberal regime in 2007, was a left-liberal and in fact he proved to be a real IMF stooge. It turned out he supplied IMF with info, in a way which was bordering on crime, and most importantly and he and his men in the Monetary Council kept the base rate unreasonably high. The high base rate, not really justified by the inflation figures, resulted in very high interest payments on Hungary’s mounting debt and it was killing any kind of chance for economic growth. The government crossed with Simor and “the threatened independence of MNB” became a major worry in the global (Western) media. In contrast, there was deep silence in the very same newspapers when the Dutch prime minister directly intervened who the central bank chairman should be…
The chart also shows when Simor left office: that’s when the base rate started decreasing in 2013.
What was the story with the private pension system? The left-liberal Horn government introduced a two-pillar pension system in 1997. Later the voluntary private pension funds made this a three-pillar system. They kept the old state pension system, inherited from the pre-1990 Communist regime, for the elderly generation and they introduced a new private ‘pillar’ . The younger generations were forced to join these private pension funds. Practically the state created a guaranteed clientele for private businesses and the Hungarian state administration also collected pension contributions for these . These pension contributions, of course, were missing from the state pension fund and that made a bigger and bigger hole in the state finances in each year… This was “plugged in” by more debt, “of course”… You get the idea. Besides these obligatory private pension funds were ripe with corruption. Their boards were filled with left-lib cronies, e.g. trade union leaders. These mandatory private pension funds charged ridiculously high handling fees (like 5% per year!) and they produced poor returns for the members. No wonder they were quite unpopular with the public and the Orbán government could easily get hold of their assets. The government payed out the individual members but they took over the capital in these funds and then they used it mostly to balance the state budget. Note that the voluntary private pension funds were left alone.
Introducing a flat tax regime in order to encourage economic growth was another important element of the “unorthodoxy”. A flat income tax may sound very unjust but consider the huge tax breaks families were given and you’ll see that the goal is to strengthen Hungary’s weak middle class. Making the middle class stronger, besides the obvious social-political benefits, then helps internal market demand increase, that is it stimulates economic growth.
Another major policy was what the British government later put as “no more something for nothing”. The Orbán government has been providing hundreds of thousands of people, who used to be on benefits, with “public work”. Though this drove unemployment down and increased economic activity, it even must have increased consumption to some extent, but the most important goals may not be economic ones.
I must also mention “rezsicsökkentés” (cutting the costs of household services) which proved to be a very popular, possibly election-winning, measure. The government made the costs of household services, including electricity, water, gas and other public services decrease by 20 percents or so by law. Utility bills were relatively high in Hungary by European standards and most of the utility providers are again foreign owned. The measure also reduced the inflation rate very significantly and eventually we saw something unprecedented in Hungary: the yearly inflation was minus 0.1% in March.
Orbán made his confidante, his economy minister, György Matolcsy the central banker after the office term of left-lib IMF stooge András Simor was up. It’s difficult to say how much of the above things could be attributed to Matolcsy but possibly most of them. He and his men in the Monetary Council slowly cut the base rate to historic lows, and that obviously growth-friendly, while Hungary managed to keep the financial balance. The budget deficit has been below the Maastricht criteria of 3 percents since 2011. The Hungarian Forint exchange rate fluctuated a lot but eventually Forint didn’t weaken too much. The weaker Forint boosted exports and hindered imports. Hungary has a very high balance of trade now and that is going to strengthen Forint sooner or later. Despite the low base rate, the yield of Hungary’s 10-year T-bill has sunken to 5.1%. (In comparison that was 12.2% in the March of 2009!)
Matolcsy, as a bank chairman, also initiated a “Lending for Growth” programme: the central bank lends money at zero percent to banks for specific purposes, like SME-financing or reducing exposure to foreign currency loans, and the banks are allowed to charge only 2.5% at most. His latest move is that the 2-week T-bills are to be converted into bank deposits and foreign banks and funds will be barred from having their money parked in MNB. This effectively pumps liquidity into the economy. Another strategic direction to strengthen the economy is a strong push to convert foreign currency public debt into Forint debt.
It’s time I finished this post. Please feel free to comment if you have questions or you want to know more.
Posted by Leto مؤدّب on 20/05/2014
https://politicsinhungary.wordpress.com/2014/05/20/unorthodoxy-explained/
Not only the fall of the Weimar Republic but the elections in Hungary in 2010 and 2014 also prove that democracy is defenceless without violence safeguarding (democracy itself). Many monster states were born by the majority’s will. There’s no democracy when the forces of dictatorship may freely attack democracy. Democracy must protect itself from the dark forces, by violence if necessary. It has to protect itself from those who do not want to recognize the limit to one’s liberty is where it clashes with others’ liberty. These ones have to be forced by armed violence to respect others’ liberties.
wrote Ákos Kertész who was allegedly given political asylum by Canada because of his alleged political harassment in Hungary. I do wonder what the Canadian authorities would say about these sentences written by someone they shelter in the name of democracy.
Posted by Leto مؤدّب on 19/05/2014
https://politicsinhungary.wordpress.com/2014/05/19/self-proclaimed-democrat-incites-violence-against-democracy/
“Hungary delivers economic surprise on the positive side” is becoming a unsurprising headline. The Central Statistical Office (KSH) has revealed today that Hungary’s economy grew by 3.5 percents in January-March on a year-to-year basis:
Hungary’s GDP
So everybody is very surprised yet again…
The analysts’ expectations two days ago
… just like everybody was surprised at the -0.1% inflation rate announced a few days ago (0.3% was “the consensus of the market”).
To put this in context, here are the latest data for the CEE countries:
GDP growth in some Central and Eastern European EU-member countries
Besides Hungary’s T-bond yields also plummeted today: For example, the average 10-year bond yield dropped by 56 bps to 4.79%, with a big (4.4) bid-to-cover ration, from 5.35% two weeks ago. That’s a new historic low in Hungary! Practically this means the financial market price Hungary’s bonds in the “investment grade” category but the credit rating agencies don’t bother: they keep rating Hungary in the “junk” category.
Update: today’s data is that the construction industry output grew by 34.2% on a yearly basis!
Posted by Leto مؤدّب on 15/05/2014
https://politicsinhungary.wordpress.com/2014/05/15/surprise-at-surprise/
… mass immigration is not the solution to Europe’s demographic problems. History has proven that civilisations that are not capable of biologically preserving themselves are destined to disappear. Our civilisation, Europe is not capable of this today. However, mass immigration, which many propose as a remedy, creates tensions that only lead to more conflict and pose the threat of a political earthquake due to cultural, religious and lifestyle differences. Common sense dictates that Europe will prefer dealing with its demographic problems in the future in a natural way, by respecting and rewarding child-bearng and the family
said PM Orbán at the Europe Forum Conference.
Here is the full speech. Ah, and note the tone of the Financial Times reporting on the speech.
Posted by Leto مؤدّب on 13/05/2014
https://politicsinhungary.wordpress.com/2014/05/13/no-mass-immigration/
by dance house folks.
Watch the homeless guy dancing! 🙂
Europe is not entirely sick.
Posted by Leto مؤدّب on 11/05/2014
https://politicsinhungary.wordpress.com/2014/05/11/flashmob-in-the-centre-of-budapest/
I don’t watch “song contests”, in fact I practically don’t watch TV at all, but I have learnt that this creature became this year’s Eurovision winner yesterday:
I happen to know that the winner of this media show is selected by the TV audiences from the nominating countries.
My only comment is: Europe is sick. Europe is on the slope.
Posted by Leto مؤدّب on 11/05/2014
https://politicsinhungary.wordpress.com/2014/05/11/social-decay/
Here is an enjoyable quip from 2012, Brussels:
Deputy Prime Minister Tibor Navracsics: We, in the Hungarian Parliament take our job very seriously and I don’t feel the need to repeat ourselves but if you like, Madam Commissioner, I can repeat it for you: The Hungarian government wants to engage in cooperation. The Hungarian government has every interest in its legislation constitution being along with the Community acquis. Let me repeat something which I said to you on the phone or by email on a number of occasions: we think that it’s obvious that, in line with the agreement, we will take into account all the advice of the Council of Europe here but we legislate.
EU Commissioner and vice-president of the European Commission Neelie Kroes: I’m asking you not “taking into account”. I’m asking you accepting and implementing any concrete recommendation of the Council of Europe.
Deputy Prime Minister Tibor Navracsics: Provided these proposals do not run counter to the Hungarian constitutional and legislative acquis, yes.
(Laughter in the room)
EU Commissioner Neelie Kroes: That is different from what you were telling me in my office.
Deputy Prime Minister Tibor Navracsics: I beg your pardon, madam. No, madam. It’s not different. It’s exactly the same. I’m a Member of Parliament (of Hungary) and I swore allegiance to the Constitution of Hungary. I’m not saying the Council of Europe wants something which runs counter to our constitution but quite simply the Council of Europe cannot impose anything that runs counter to our constitution. Full stop. Thank you.
Posted by Leto مؤدّب on 08/05/2014
https://politicsinhungary.wordpress.com/2014/05/08/hungarian-deputy-pm-instructs-eu-commissioner-about-legal-priorities/
A public lecture delivered by Christopher Collins, the Director of the Margaret Thatcher Foundation at the Pázmány Péter Catholic University.
The story how Hungary almost fell victim to the Cold War in 1982.
The lecture used newly-released documents from British, American and Hungarian archives to examine the policy of the British and US governments towards Hungary 1979-84. It traced the rise in Western interest in Hungary in the light of martial law in Poland. There’s new information on the Hungarian financial crisis of 1982 and the arguments it prompted between the United States and its allies as to the policy of ‘differentiation’ between states in the Soviet-controlled Eastern bloc. There’s discussion of Western policy during Andropov‘s brief ascendancy and the decision on the part of Margaret Thatcher and the British Government to promote greater contact with the East, prompting her acceptance of the long-standing Hungarian invitation to visit.
Posted by Leto مؤدّب on 07/05/2014
https://politicsinhungary.wordpress.com/2014/05/07/thatcher-reagan-and-the-hungarian-compromise/
Politics in Hungary 