Hungarian Spectrum

Finding their way: The Hungarian socialists' dilemma

Ferenc Gyurcsány's answer to the problems of the Hungarian Socialist Party (MSZP) was an adaptation of Tony Blair's "Third Way" so successfully employed as well by Bill Clinton and others. The "Third Way" is a term that has been used to describe a political position that attempts to transcend left-wing and right-wing politics. This approach is commonly viewed as representing a centrist compromise between capitalism and socialism, or between market liberalism and democratic socialism. But the Hungarian version of a centrist, reformist political orientation within the Hungarian Socialist Party failed. Ferenc Gyurcsány was unable to deliver, and today MSZP is in crisis. What happened and why? This is what the party leadership is now trying to figure out, but I'm not at all sure that they are on the right track. The catchword today is "return to the left." Everybody is talking about "leftist values," whatever they are.

Gyurcsány, who has not been seen or heard from since his "retirement," still has his blog except instead of writing every day as he used to he writes perhaps once a week. Mind you, his "fans" are still numerous. His last blog had over 800 comments! Usually he confines himself to everyday affairs--his knee operation, his children--but here and there he writes a few lines about politics. It is evident that he is sticking with most of his political ideas, which he still considers the foundation of a modern Hungarian society. It seems that Gyurcsány has also had enough of all this talk about "leftist values" and the accusation that where MSZP went wrong in the last seven years was the party's abandonment of leftist values. To quote Gyurcsány (June 30, 2009; http://kapcsolat.hu/blog/a_baloldalisagrol): "The question is not whether we were leftist enough in the last few years but instead whether there were times when we were too leftist." Here "being leftist" for Gyurcsány means giving too much to segments of society that are not active in producing economic growth. Children, students, the disabled, pensioners, and so on.

Those in the party who are considered to be the followers of Gyurcsány join the others in repeating the "toward the left" slogan, but they add that it also means "modernization." What modernization means in this context is also a mystery. Then there are the left-wingers. Katalin Szili and Tibor Szanyi are good examples. They want to help the lower classes and are less concerned with the middle class that is actually the backbone of the party's electorate. As Szili said this morning, she wants to work for a "plebeian mass party of the left." However, she immediately added that she doesn't want to have "a squandering state but one that develops." You will say: "but this doesn't make any sense." No, it doesn't. It doesn't because I have the feeling that Ms. Szili doesn't know what she is talking about. Both Szili and Szanyi say that they wholeheartedly support Gordon Bajnai's program because the country has no other choice. They are supporting the program of the man who just the other day made it crystal clear that "the number 3.8 is carved in stone." That is, the deficit cannot be higher than 3.8% and surely no "squandering" of public money is possible with that tight a budget. (I use the word "squandering" here because I couldn't find any better equivalent for the Hungarian "osztogató." I think this translation is fairly close.) And there's the rub. How can MSZP be the "plebeian mass party of the left," which presumably implies a very generous state, under the present circumstances?  I don't think it can be.

There are some who think that MSZP's problem is that it suffers from left-over Kádárism that prevented the full blossoming of the market economy. At the same time they continued the "insane spending" that kept the Kádár regime going for a while. As the matter of fact, practically all governments after 1990 added to the "insane spending" until the the country nearly went bankrupt. But the most recent crisis wasn't the first. In the latter part of the 1970s and the mid-1990s the country was on the brink of financial ruin as well. Both times stringent measures had to be adopted. But these measures were temporary. As soon as the country got out of financial trouble the government went back to its profligate ways. This is what they call in Hungary a policy of "loosening and tightening."

The socialists at the moment are busily apologizing for not being socialist enough. They practically admit, repeating the accusations of the opposition, that they did nothing and achieved nothing. This is, of course, not at all true. They try to explain their failure on a lack of communication. They say that they didn't "explain" the reforms properly. Some critics claim that in the middle of a financial crisis and the implementation of an austerity program the government simply shouldn't have initiated a reform program. A lot of criticism is levelled against the socialists' coalition partner, SZDSZ, because of their doctrinaire liberalism that led to the disastrous so-called health reform. Yes, health reform was handled poorly, but it wasn't a pivotal factor in the failure of the Gyurcsány government. The decline of the party began immediately after the announcement of the austerity program during the summer 2006 and has continued relentlessly ever since.

Ferenc Gyurcsány's problem was not that he was not leftist enough but that he wasn't courageous enough to make greater cuts in unnecessary social spending. To the very end he insisted on keeping the extra month of pension for 3.5 million pensioners, which was a huge budgetary burden. And when he first came out with his austerity program he said "one mustn't be afraid, it won't hurt." Well, of course, it was going to hurt. He should have been totally frank and told the whole truth. After all, it seems that Bajnai's stringent measures have been accepted and there are already tangible results that even the population has been noticing. Perhaps a less timid, less leftist approach would have been more successful than the one Gyurcsány chose. The question is whether the party leaders would have accepted such measures in the summer of 2006. They seem to accept them now but perhaps three years later, after a world economic crisis, they came to their senses. In any event, I cannot see a return to the good old socialist "plebeian mass party of the left" any time soon. The only way out is still Gyurcsány's way, without him for the time being.

The first fifty days of the new Hungarian government

Public relations are not a strong suit of left-liberal governments in Hungary. In fact, some MSZP voters just moan and say that the government's communication is outright dreadful. The opposition on the other hand is excellent in this department. For example, some of the relatively minor accomplishments of the Orbán government, like the Széchenyi Plan, were magnified beyond recognition in government communications. A couple of billion forints of investment in this plan was sold to the public as the cornerstone of the country's bright economic future. This kind of strategy might be successful for a while but it has its obvious pitfalls in the long run. What if the promises are not fulfilled? What if claims are contradicted by facts? Ever since 2002 Fidesz's strategy has been to repeat ad nauseum that everything is terrible. They built a whole election campaign in 2006 on the slogan that Hungarians' "lives are worse now than four years before." The only problem was that everybody knew this was simply not true. The problem was just the opposite: people lived too well. To my mind, Fidesz has been making the same mistake of late. I know people will counter: How can you say that when all opinion polls predict a smashing Fidesz victory? Yes, that's true, but how long can Fidesz keep saying, for example, as Péter Szijjártó did today, that the fifty days that have elapsed since Gordon Bajnai formed his government "have been fifty days of hopelessness"?  Not for long when the facts contradict this assertion.

Today Gordon Bajnai made sure that Hungarians understand some of the accomplishments of his first fifty days as prime minister. He and his closest co-workers made several appearances starting with Magyar Rádió in the early morning and continuing with a press conference while his finance minister had a long interview in the afternoon with György Bolgár on KlubRádió. As for his style, Bajnai was modest: "We don't have reason to celebrate but we should certainly give an account." He emphasized that the steps he and his government have taken will ensure long-term economic growth and will allow the country to extricate itself from the economic crisis. Bajnai, I think correctly, talked about the international community's positive opinion of his government's activities to date. He emphasized that his government doesn't really care about the election results of this weekend or next year; rather, he wants to ensure the economic well being of the country for decades to come. He mentioned the strengthening of the forint against the euro and the U.S. dollar and claimed that people who took out loans in foreign currencies decreased their payments by 400 billion forints. He mentioned that in the last fifty days the swap rate decreased by half. The IMF renewed its loan agreement with Hungary, and during the day there were half sentences uttered to the effect that perhaps the country might not even need the next installment. Sooner or later people will have to realize that there are improvements, especially if one can believe that globally the second half of 2009 will begin to show signs of recovery.

The solid majority (MSZP and SZDSZ) behind the government facilitated legislation. A legislative marathon began a few days after Bajnai took office. A few numbers from the last fifty days: 21 pieces of legislation, 26 executive decrees, and 32 government regulations were voted on or acted upon. The legislative activity didn't stop for a minute. The decision was made to invest 1,800 billion forints (EU money) into the building industry, and the government established a fund of 1,400 billion forints to provide credit to middle-sized and small enterprises. Another 30 billion was put aside for a program for companies in financial trouble. Their employees worked for only four days and received wages accordingly while the fifth day was spent improving their skills at the government's expense.

The less popular legislative activity involved saving money on welfare programs, like thirteenth month pensions to 3.5 million pensioners or not giving an extra month's wages to 700,000 public employees. They reduced the salaries of ministers and managers of state-owned companies. Changes in the tax system are aimed at stimulating employment by reducing payroll taxes and boosting personal consumption by lowering the income tax.

And finally I would like to show two charts that appeared in today's Népszabadság. The left column of the first chart shows the expected budget deficit of EU countries for 2009. The worst are Ireland, the United Kingdom, Latvia, Spain, and France. Hungary's -3.9% is not bad, especially if we compare it to countries in the region: Poland (-6.6), Slovenia (-5.5), Lithuania (-5.4), Romania (-5.1), the Czech Republic (-4.3), or Austria (-4.2). The right-hand column shows the year over year drop in industrial orders as of March 2009. Again, although the situation is not rosy in Hungary it is better than in most European countries. As I said earlier, it will be difficult to maintain for another year that Hungary is in ruins and is a country of hopelessness. If I were an advisor to Fidesz I would suggest a change in strategy. Although a few polls indicated further erosion in the MSZP voter base, the declines are not substantial in spite of the severe cutbacks introduced by the Bajnai government. The European parliamentary elections will most likely bring a huge Fidesz victory, but if the MSZP doesn't lose its nerve the successful government activities should bring more positive political results. And the socialist party shouldn't lose its nerve because from their point of view it would be moronic to hold elections now when everybody claims that MSZP's popularity is at its lowest.

Let me reproduce here another chart of the year-to-date movement of the Hungarian forint against the euro. That is, how many forints does it take to buy one euro? The forint is still not as strong as it was at the beginning of the year, but it has gained strength in the last fifty days. And if we compare it to the high of the year, in the neighborhood of 316 forints to the euro, it has done remarkably well. A very strong forint has its pitfalls, as we all know. A weaker currency is good for Hungarian exporters. Admittedly, it is not so good for people who want to travel to other countries or for those who took out loans in foreign currencies. The lower bar chart shows the rates of unemployment in select European countries in addition to the EU average. The blue indicates the situation in March 2008 and the magenta a year later. Yes, Hungarian unemployment went up but not as dramatically as in some other countries. The European average in March 2008 was 6.7% ; today it is 8.3%. In Hungary it was 7.4% and now is 9.2%. Admittedly, the Hungarian rate is artificially depressed because the percentage of active workers in the population between the ages of 16 and 60 is very low by European standards. The new tax code may help to increase the size of the work force. Another government program is directed at welfare policy. People who are able bodied will no longer receive welfare payments gratis. They will either be employed by local governments in public projects or, if they haven't finished grade eight and are under the age of 35, they will have to go back to school.

One rarely has the opportunity to read in one place all the changes that have been made in the last fifty days. The sporadic news of positive steps is drowned out by the daily noise that predicts the total collapse of the country. Viktor Orbán, for example, doesn't say that his government's first job will be to lead the country out of the recession. Its "first task will be the removal of the rubble." I really doubt that this strategy will be as effective as it appears at the moment.

Growing support for the new Hungarian government

Today started well for Gordon Bajnai. Szonda Ipsos published the results of its latest poll about Hungarians' attitude toward the new government. Their previous poll, taken on April 1, showed that only 28% of the population was optimistic about the new government's ability to handle the crisis. In two weeks that number went up to 35%, while those who felt that Bajnai and his team would not succeed decreased from 25% to 18%. Undecided voters, who normally shrink from expressing strong opinions, are surprisingly optimistic this time: 38% of them are hopeful. About the same number are skeptics. When these undecided voters were asked whom they consider more suited for handling the crisis, Bajnai outscored Orbán. On a scale of one to five Bajnai got a 2.8 and Orbán 2.4. Seventy-five percent of the population realizes that the austerity measures are necessary. Of course, they wholeheartedly support measures such as lower salaries for CEOs of state enterprises. They are a great deal less enthusiastic about proposed cuts in social benefits.

If Szonda Ipsos had conducted its poll after the first cabinet meeting today, the approval rate would most likely have been even higher than a few days ago when very little was known about the government's intentions. Very cleverly, the government released first those measures that will affect members of the administration. Ministerial salaries will be cut by 15%. Until now undersecretaries' pay could vary as much as 30% from the official figures at the discretion of the prime minister. This practice will be stopped. The government will suggest a change in the law governing the salaries of directors of state owned companies. Currently, for example, the head of MÁV (Hungarian Railways) gets a yearly salary of 78 million forints. Considering MÁV's dismal performance, that high figure is unjustified. They will reduce by 50% the daily allowance of members of government travelling abroad. (They can eat at MacDonalds!) At the moment if an official doesn't take all his vacation time he can be reimbursed in cash. This practice will come to an end. Ministers and undersecretaries will no longer be eligible to receive large premiums after a certain number of years spent in the public sector. Surely, these measures will boost the popularity of the government because the general perception is that the government spends too much money on itself.

I don't know whether this relatively good news for the government had anything to do with the unusually shrill voice of Viktor Orbán this afternoon at a Fidesz conference. Some of the themes were familiar. Orbán called his political opponents "cheating businessmen" from whom the Hungarian people ought to take their country back. The change of government, according to Orbán, means nothing: a comedy, a circus, and the MSZP-SZDSZ coalition reemerged in order to prevent "change." This old-new coalition will be "the coalition of collapse." The EP elections on July 7 will be a "vote of no confidence."  After a Fidesz rout the government will have to draw the necessary conclusions and simply give up. At least this is what Orbán is hoping for. His clairvoyant powers are modest at best; he has predicted such outcomes at least half a dozen times and nothing happened. And when something happened, it had nothing to do with one of his ultimatums.

And what did Orbán offer? According to him the real problem in Hungary is not financial but a lack of jobs. At least "one million jobs are missing." As long as there are no one million new jobs the financial well being of the country will be temporary. He repeated his promise that after the "removal of the rubble" will come "the day of reckoning" when the guilty ones who brought this crisis to the country will have to answer in a court of law for their misdeeds. (This would be fairly difficult under the current judicial system. After all, this is not a one-party dictatorship in which show trials were staged for political opponents. However, at one point Orbán mentioned the possibility of "some legal adjustments" that will take care of the problem.) After that comes the "rebuilding."

This "government of hopelessness" will lead the country into outright bankruptcy. Says Orbán. But his negative message and the monotonous incantation of "hopelessness" might be self-defeating. One ought to remember the 2006 elections when Fidesz plastered walls with the saddest-looking old lady who tried to explain to the people that they live worse than they lived four years before. That strategy at a time when the old ladies' pensions had risen by 40% was most unfortunate!  Naturally it didn't work. The mantra of "hopelessness" might also backfire. At least an awful lot of people, even those who are not committed MSZP voters, kept saying today on György Bolgár's talk show that they are sick and tired of hearing about all this hopelessness and people they know feel the same way. While Bajnai at the moment predicts a contraction in the GDP this year of 5.5-6%, Orbán confidently announced that it will be 8% and added: "Where does this man live?  When the German forecast is -7.5%." (Who are Orbán's forecasters? The official German estimate is that GDP will fall by 2.25%; the IMF as of April 10 put the contraction at 5%, the OECD at 5.3%). Another problem with Orbán's strategy is that he keeps repeating that the crisis is a uniquely Hungarian phenomenon caused exclusively by the Gyurcsány government. How long can this be maintained? The Hungarian public might not be terribly sophisticated, but surely they can't help hearing that the crisis is worldwide. And soon enough they will figure out that factories are closing because Hungary can't keep up its level of exports when its trading partners are in a deep recession.

I have the feeling that the current Fidesz message is a bit confused. Earlier, the party's strategy hinged solely on attacks on Ferenc Gyurcsány. Now that he is gone they are trying to paint Bajnai as a second Gyurcsány, just another communist. But the two people are very different, and by no stretch of the imagination could one call Bajnai's agenda communist. But here's the clincher. How does Orbán know that these people are communists? Gyurcsány announced his intention to resign on March 21, the anniversary of the declaration of the Hungarian Soviet Republic of 1919. And the socialists decided to choose a new prime minister instead of holding elections on April 4, the anniversary of the liberation of Hungary by the Soviet army. Q.E.D.

The current Hungarian political situation

Huge disappointment, if not panic, exists in left-liberal circles nowadays in Hungary. The latest polls indicate that Ferenc Gyurcsány's departure from office didn't help to restore the population's trust in MSZP. On the contrary, the socialists lost further ground. And that is difficult to believe because the party's popularity was stuck at such a low level, around 16-18%, in the last few months. The Progressive Institute/Publicus tested the political waters by conducting a survey between March 23 and April 7. Among eligible voters MSZP's popularity was 10% as opposed to 16% in October! Absolute panic on the left. Indeed, this is very low. According to some it is the lowest recorded figure ever, with the possible exception of 1990.

Being a half full kind of person, I will concentrate on the brighter sides of things that, in my opinion, are significant and somewhat mitigate those stark figures. The first and perhaps most interesting finding was that support for Fidesz among eligible voters didn't grow. On the contrary it shrank: from 33% to 30%. The second even more significant result, I believe, is that 39% of those asked are unsure for which party they would vote. I would venture to say that most of these unsure people at the last elections voted for MSZP or SZDSZ and are at the moment fed up with both parties. Another figure we ought to take into consideration is that Progressive/Publicus noted the very high percentage of those who claimed that they would definitely would go and vote if elections were held next Sunday: 62%. It is very unlikely that such a high percentage of people would actually vote in a hypothetical election in a week's time, but a lot of people think that it is their civic duty to vote (and, of course, they are right) and therefore they say what they think is expected of them. Another bright spot for MSZP supporters, at least in the short run, is the breakdown by age. Fidesz supporters are younger, MSZP voters are older. The older folks are more likely to go to the polls than the younger ones.

Meanwhile, let's look at the reactions of "political scientists." With notable exceptions the majority of them think that the sinking popularity of MSZP will result in the socialist parliamentary members' abandonment of the Bajnai government. These commentators claim that they will refuse to support the austerity measures and will throw in the towel: let's have early elections with lots of promises because otherwise MSZP will find itself in the same position as the Polish socialists. I find such predictions outright irrational and I simply can't understand how anyone in his right mind could come up with that kind of scenario. Elections at the time when the party is at a "historic low"?  My assessment is diametrically opposed to the above so-called analysis. The worse the news for the party the greater the cohesion will be because it will be obvious to those who are able to think rationally that retreating from Gordon Bajnai means immediate elections and certain defeat. However, I can already hear the answers of those who have made up their minds that the Bajnai government will not last until 2010. According to these people there is a group of socialist parliamentary members who are also mayors. If national elections were held this year, local elections would be still in October 2010. By that time Fidesz, surely the victor in the national elections, having inherited the economic and financial crisis and having imposed its own austerity program, will be just as unpopular as MSZP is today. Thus MSZP will win big at the local elections a year later! Doesn't that sound perfect? But considering that there are only a handful of socialist parliamentary members who are also mayors, it is unlikely that this group would be strong enough to achieve its aim. That is, if this is their aim. I suggest instead that it is the figment of the fertile imagination of the Hungarian "political scientists."

Then there is the last card. According to the so-called analysts if the internal opposition of MSZP does not succeed in ruining the Bajnai government, SZDSZ will surely manage to wreck the present solid support behind Bajnai. These people point to József Gulyás's latest: abstaining at the committee hearing of Ádám Ficsor and thereby wrecking the one-man majority of the socialist-liberal side. However, Gulyás's act was roundly condemned by other SZDSZ members and out of the nineteen-member caucus sixteen are solidly behind Bajnai and his program. Moreover, one of the SZDSZ members today demanded that the three who refuse to follow party discipline be stripped of their membership in the caucus. I don't think it will get that far, but Gulyás's colleagues consider his behavior unacceptable; he hurts the party and, more importantly, does a disservice to the country. But let's say that these three who are hailed as "heroes" by Fidesz actually remain adamant in refusing to support Bajnai's government, what will happen then? Not much. Sixteen votes are more than enough and I didn't even count the two votes from the independents. So it doesn't matter how we look at it, it is very unlikely that MSZP-SZDSZ support for Bajnai will collapse any time soon.

The Bajnai government

As I mentioned yesterday, the appropriate parliamentary committees are in the middle of voting on the nominees for ministerial posts. The process is still not finished but one nominee, the twenty-nine-year-old Ádám Ficsor who until now was Ferenc Gyurcsány's chief of staff, didn't win the committee's approval. Rejection by a committee doesn't mean that the nominee cannot become minister, so this is not the real story. But it says a lot about József Gulyás, the SZDSZ member on the committe on national security. His affirmative vote was necessary for Ficsor's approval; instead, he abstained. He did exactly the same thing when the current minister, György Szilvásy, was nominated. And that was during the period when the coalition was still intact. He abstained and Szilvásy wasn't approved by the majority of the committee. However Gyurcsány stood behind him and therefore Szilvásy was eventually able to occupy the post. Bajnai might do the same. We will see. I simply don't understand what Gulyás hopes to achieve with this behavior. If he thinks that his conduct makes his party more popular, he is wrong. I know a lot of former SZDSZ voters who swear "never again." Precisely because of the erratic behavior of some of the SZDSZ parliamentary members.

I already wrote about Bajnai and his business career. What I didn't mention is that he plays soccer on a Division II team. He is the goalie. In his speech he referred to himself as a goalie who wasn't trained to make feinting moves but who is good at defense. He will need all his talent in this department because the "character assassination" has already begun.

As for the composition of his cabinet. A number of people from the Gyurcsány cabinet remained: Péter Kiss, Csaba Molnár, Imre Szekeres, István Hiller, József Gráf, Tibor Draskovics, Tamás Székely, and Imre Szabó. Péter Kiss has been a member of every socialist government to date. Until now he headed the enormous prime minister's office with several undersecretaries in charge of different governmental tasks. For one reason or other Bajnai didn't want Kiss in this post, but Kiss is a very important person within the party. And the party insisted. After long negotiations Kiss became minister without portfolio who will be the general deputy of the prime minister. His job will be to ensure an understanding with the trade unions and various interest groups. Actually this is a  critical job because the austerity measures will certainly not be popular. The prime minister's office will be headed by Csaba Molnár who until now was in charge of energy. Although he is young and relatively inexperienced, he was a good administrator and an effective communicator. He especially shined during the period when no Russian gas reached Hungary. He is considered to be "Gyurcsány's man." Running the prime minister's office will be no small task. Imre Szekeres is also an important man in the party and an able administrator. He remains in charge of defense where he did an excellent job. Imre Szekeres is one of the very few Hungarian politicians who knows how to brag about his own accomplishments and the "wonderful people" who serve in the Hungarian army. István Hiller, formerly a professor of history, remains minister of education and culture. Apparently he has a wonderful sense of humor. At least people who know him personally tell me so. Too bad that this is not at all evident in his public appearances. Apparently he was also a great lecturer. Again, this is hard to imagine. He sounds downright boring to me and has the tendency to speak in a sing-song manner. Moreover, although he may have been a good minister, there are few outward signs of the ministry's accomplishments. József Gráf, minister of agriculture, also remains in his post. He is touted as the most successful minister of agriculture ever, in part because he knows how to speak to the farmers. Occasionally, however, I have the feeling that he caves in too much to agricultural interests. His latest--that supermarket chains should fill their shelves 80% with Hungarian produce--strikes me as a singularly bad idea. Tamás Székely, minister of health, is relatively new. He succeeded Ágnes Horváth, SZDSZ minister, whose dismissal caused the breakup of the coalition. His communication skills also leave something to be desired but apparently he managed to appease the doctors somewhat. I'm not entirely sure whether this appeasement policy is a good idea; I wasn't too thrilled when his first move was to make up for the "loss" that family doctors suffered as a result of the referendum when a 300 forint copayment for medical visits was voted down. After all, the doctors supported the referendum; they were adamantly opposed to copayments, which meant some extra paperwork for their offices (but also extra money in their pockets). Tibor Draskovics, in charge of justice and the interior, remains in his post. I'm not the only one who is somewhat surprised by that decision. And finally Imre Szabó remains minister of the environment and waterways.

As for the new people. I am especially pleased about the nomination of Péter Balázs, who was Hungary's first commissioner in the European Union's "cabinet." He was responsible for regional development. He did a marvelous job, but his slot was needed for László Kovács who earlier had been president of MSZP and for a while foreign minister in the Medgyessy and Gyurcsány governments. Balázs is a first-rate man with ambitious ideas about the future of Hungarian foreign policy. The other posts are filled mostly by "experts." Péter Oszkó, who will be minister of finance, is a tax lawyer. A couple of days ago I said something about Oszkó's serious demeanor and that I never saw him smile. I have to change my opinion because he obviously has another side. He plays the harmonica in a band called Blue sPot! (This is not a typo, so I assume there is a double entendre here.) The band performs publicly. Tamás Vahl will replace Bajnai at the head of the ministry of economics and development. He is an expert in computer science who spent part of his childhood in Germany. After 1990 he worked for Berliner Bank's Hungarian affiliate, Siemens, and IBM. Another man from the business world is Péter Hónig, nominated for the post of minister of transport, telecommunications, and energy. He is at the moment second in charge of the Budapest Power Company but earlier he was CEO of Malév, the Hungarian airline, and Dunaferr (Hungarian Steel). He has government experince: he was deputy undersecretary in the ministry of economics between 1998 and 2000 in the Orbán government. László Herczog will be responsible for labor and social welfare. He has served in every government since 1990, including the Orbán government, as undersecretary or deputy undersecretary. He is especially famous for his talent in the field of conflict resolution. For example, last year his sheer presence at the negotiations between MÁV and István Gaskó's trade union was enough to move the negotiations to a successful end. Ádám Ficsor who was until now Gyurcsány's chief of staff may or may not move on to be in charge of national security. Apparently he is hard working and ambitious, not without political aspirations. Otherwise he is an economist and a financial expert. And finally, Zoltán Varga, MSZP member of parliament since 2006, will be in charge of local governments. He is such an unknown in parliament that Fidesz members got mixed up and first thought that the new minister would be the very young László Varga. (There are two Vargas in MSZP and two Vargas in Fidesz. It is a common name.) Our Varga has vast experience in local governmental affairs and apparently managed to get along with members of Fidesz as well.

The financial markets reacted well to Bajnai and his suggested cabinet, but the Hungarian "political scientists" are certain that it will be a flop. I love Hungarian optimism!! Actually, my opinion is that it may be more stable and more successful than most people think at the moment. MSZP and SZDSZ are in such horrible shape that they can't afford not to support the Bajnai government. I don't think that Bajnai was joking when he said that he would remain prime minister only as long as there is solid support behind him. Otherwise, early elections! And that would be very bad news for both parties. On the other hand, if some of the economic forecasters are correct and within half a year both Poland and Hungary are approved for early admission to the eurozone the gloomy mood of the Hungarians might lighten up. And if the forint strengthens a bit more and those whose debt is in foreign currencies catch a break, the MSZP-SZDSZ backed government might become a bit more popular. Certainly, that is MSZP's only hope at the moment.