Hungarian Spectrum

The first two days: Hungarian extremists in the European Parliament

One could continue with yesterday's topic because today Hungarian soccer fans spread the good name of Hungary in Romania! And this group is not associated with Fradi but with Újpest FC. Anyone with a burning desire to know more about Újpest can read about the club at http://en.wikipedia.org/wiki/%C3%9Ajpest_FC About five hundred members of this illustrious fan club yelled their way to Bucharest where the team was playing against the Romanians. From the railways cars they threw beer cans at people standing at the stations, poured soft drinks on people trying to embark, showed Romanian-language posters that read "Transylvania is ours," and on the top of their lungs screamed "Gypsies, Gypsies" and "Romania is filth." Another group of fans who went by bus ended up in a Romanian hospital rather than at the soccer match. The bus driver fell asleep and had a serious accident.

But I'm moving on to Jobbik's debut in the European Parliament. While foreign papers were full of stories about the Ferencváros-Hertha match, I couldn't find anything in English-language, German, or French papers about the welcome mat laid out for the three Jobbik members of the new European Parliament. Last Saturday at the "reorganization of the Hungarian Guard" Gábor Vona, Krisztina Morvai, Csanád Szegedi and others, including a Protestant minister and a former minister of defense, donned the uniform of the Hungarian Guard to show that they belong to the organization. Szegedi vowed that he would appear in the Guard's uniform on the opening day of the European Parliament in Strasbourg. And he did. Krisztina Morvai and Zoltán Balczó were less daring. They put on a garb known as "bocskai" after István Bocskai (1557-1606), Prince of Transylvania, that became fashionable between the two world wars as a school uniform and in nationalistic middle-class circles. After the change of regime in right-wing circles the "bocskai" once again became a desirable item. Mind you, in the old days there was no female version of the "bocskai" but today there are several tailors specializing in making them. They are sold online at http://www.szabosag.com/pages/category.php?id=4 

Szegedi's guardist uniform caused an outcry. First the Slovaks raised their voices. Juraj Horvath, chairman of the Slovak parliamentary committee on foreign affairs, called Szegedi's outfit "an international scandal." The Hungarian foreign minister, Péter Balázs, wasn't thrilled either. He feared that the very fact that "three representatives of the extreme right are there [in Brussels] is surely injurious to Hungary's reputation and image." Well, he wasn't joking. Krisztina Morvai will be a very active member. She spoke on the very first day. The topic was human rights violations in Iran that immediately reminded her of Hungary. She brought up the "atrocities" of the events surrounding the "celebrations" of the fiftieth anniversary of the Hungarian Revolution of 1956. We know from past experience that Krisztina Morvai is not exactly a stickler for the truth. So in her speech she claimed that on October 23, 2006, hundreds were arrested  and tortured while in jail. And if that weren't enough, she continued with other so-called atrocities. "In the last three years every time there were demonstrations against the government brutal police aggression occurred. Not in Iran, not in China, not in Honduras, but in a country within the European Union, in Hungary. On the last occasion, 216 peaceful demonstrators were arrested." Just to remind everybody, this was an illegal gathering of the Hungarian Guard that had been dissolved by court order earlier. She asked the help of her colleagues "to put an end to these violations of human rights." If some people thought that Morvai would change tactics in Brussels, they were certainly wrong. She will go on spreading all sorts of lies and misinformation.

After she finished the speech she passed out 100 DVDs to other parliamentary members containing videos of these atrocities. Before the films begin one can read: "The participants of the peaceful, spontaneous sit-in strike are the victims of brutal police attack." Well, we know all about these peaceful demonstrators! Morvai had to make her speech as an "independent" because even the EFD (Europe of Freedom and Democracy) caucus in which the European nationalists gather refused to admit the three Jobbik representatives. EFD is a new group consisting of representatives from Denmark (Dansk Folkeparti), Finland (True Finns), France (Mouvement pour La France), Greece (LAOS), Italy (Lega Nord), Lithuania (Order and Justice), Netherlands (Reformed Political Party), Slovakia (Slovak National Party) and United Kingdom (United Kingdom Independence Party). These parties indicated that they "don't wish to cooperate with fascists": the Hungarian Jobbik, the Greater Romania Paty of Corneliu Vadim Tudor, and the French Front National of Jean-Marie Le Pen.

Meanwhile Martin Schultz, head of the social democratic caucus, reminded the assembled members of a parliamentary rule forbidding wearing military or paramilitary uniforms in the chamber. Schultz said that as a German he was especially sensitive about clothing that reminds him of Nazism and the Holocaust. Csaba Tabajdi, an MSZP member of the European Parliament, also had a few things to say. He explained that the uniform belongs to an organization whose activities have been forbidden by the court. He called Szegedi's wearing of the uniform "an unequivocal and unacceptable provocation." He rightly pointed out that in the last five years all Hungarian members of the European parliament, independently of their party affiliations, have tried their best to be useful members of the EU parliament. "The actions of Jobbik are ruining the good name of our country. Unfortunately this isolated extremist party doesn't only discredit itself but brings shame to Hungary."

I know several people who have been trying to guess what Krisztina Morvai would do in Brussels. Some were sure that she would be quiet and well behaved because "she is smarter than that." Well, I think these people were wrong. And this is just the first day. I hate to think what else is in the offing.

Hungarian austerity program: tougher EU demands

It was yesterday that Péter Oszkó, Hungarian minister of finance, and András Simor, chairman of the Hungarian National Bank, together representing the Hungarian government, met with Joaquin Almunia in the name of the Commission of the European Union to sign the latest agreement allowing Hungary to receive the third installment of the 6.5 billion euro loan from the EU. From the document it is clear that even tougher measures are expected from Hungary. Otherwise the next and final installment will not be forthcoming. The main demands are to: (1) stop all housing subsidies; (2) save forty billion forints by the time of the fourth installment on subsidies for the Hungarian State Railways (MÁV); (3) reduce expenses for running local governments by 120 billion forints; (4) introduce property taxes; and (5) reduce to two years instead of three government payments to new mothers.

As for housing subsidies, the government as of March planned only to reduce their size. That didn't satisfy the European Union. They want to put an end to all housing subsidies by July 1. Right now the government is thinking of a more modest plan that would allow subsidies for first-time purchases of apartments or houses by people under the age of thirty-five. The purchase price cannot be higher than 30 million forints. I can't see how that will satisfy Brussels.

The other sticking point is subsidies for young mothers. Parliament passed legislation that reduced the duration of the payments from 36 to 24 months, in keeping with the new EU demands. However, László Sólyom, president of the republic, refused to sign it. He wrote a letter to Katalin Szili, speaker of the house, in which he stated that in his opinion women should decide when they want to return to work. (Fair enough, but what does that have to do with the duration of government subsidies?) He considers women's employment important, but at the same time he thinks that the low birth rate and the problem of an aging population warrants the retention of the present practice. It is a well known fact that the ability of Hungarian women to stay at home with their children for an unusually long time didn't help the birth rate. Moreover, according to Klára Sándor, SZDSZ member of parliament, staying away from the workplace for three years reduces a woman's chances of returning to work. She claimed that the birth rate is higher in those countries where women's career opportunities are better.

Whatever László Sólyom thinks, it is unlikely that this piece of legislation will be scrapped, and not only because the European Union will not allow the current system to remain in place. Lajos Bokros just yesterday said in an interview that he didn't agree with László Sólyom, which may mean that most of the MDF parliamentary members will vote to keep the bill as is. SZDSZ made it very clear that they are sticking with their original decision. The mild-mannered Gordon Bajnai (one can only hope with some of the powers of mild-mannered Clark Kent, known to the world as Superman) said that he was sure that when the president fully understands the government's plans for establishing new day care facilities he will not object. My feeling is that Sólyom will have to swallow a big one and sign the bill.

As for the property tax. There is quite a discussion about what to call it. It was originally known as "ingatlanadó" (real estate tax) but is now referred to as "vagyonadó" (property tax) because it will be levied not only on real estate but also on other luxury items: planes, helicopters, expensive boats and particularly valuable cars. (I'd be curious to know how many Hungarians own any of these luxury items.)  But the original bill (still under discussion in parliament) is very muddled. As it stands, it will be levied only on real estate worth more than 30 million forints. Real estate tax based on market value is an entirely new concept in Hungary and it seems that there is no way of assessing the value of structures and deciding which ones are worth more than 30 million forints. Therefore, the idea is that the owners themselves should declare the value of their real estate. I don't think that I have to tell what I think of this brilliant idea. Somehow I don't think that millions of owners of apartments and houses will do a self-assessment and rush to declare that they should pay real estate tax. The authors of this stillborn tax scheme answer such objections by saying that the Hungarian equivalent of the Internal Revenue Service will check returns (How? By targeting certain addresses and then going on site for an appraisal?) and that personal income tax is also paid on the basis of a simple declaration (and we know how high the collection rate is in Hungary). One thing is sure: some members of SZDSZ will not vote for the bill in its current form. They rightly point out that many people own more than one piece of property. So even if none of the houses or apartments is worth more than 30 million, the owners should pay taxes based on the total value of their real estate assets. The party thinks--or at least this is what Gábor Horn says--that property tax should be levied locally as everywhere else in the world. SZDSZ also suggests that locally levied property tax should be deductible from national income tax. So far so good, at least based on the American model. But SZDSZ doesn't seem to be concerned that until now not one word has been uttered about taxes on commercial real estate holdings. This revenue stream is vital to local governments, at least in the U.S. Another strange aspect of the Hungarian tax code is that land is not taxed. Wow! Wouldn't it be nice to own thousands and thousands of acres of land ripe for residential or commercial development! SZDSZ's vote is essential but, once again, the party is unable to speak in one voice. While Gábor Horn talks about opposition to this bill János Kóka promises full cooperation.

The reason for the new tougher demands is the changed economic climate. When the original arrangements were made the prediction was for a 3% decrease in the GDP. By now the ministry of finance's calculations are based on a slump of 6.7%. As for Sólyom, only yesterday he announced that without the help of the European Union the Hungarian government would have had to declare bankruptcy. I hope he keeps that in mind when he has to sign the child-support bill he currently objects to.

European parliamentary elections in Hungary

I guess it is time to get back to the present, especially since there will be elections between June 4 and 7 in the countries of the European Union. Hungary can send 22 men and women to participate in the work of the European Parliament; the parliament has a total membership of 736. Eight parties are qualified to compete. MSZP, SZDSZ, MDF, Fidesz, and Jobbik are the well known ones. However, there is the Munkáspárt (the communists) in addition to two new parties: Roma Összefogás (Gypsy Cooperation) and LMP-Humanista Párt that has a green hue. LMP, by the way, stands for "Lehet más a politika" (Politics can be different). As things now stand most public opinion polls predict that only three parties will send delegates: Fidesz, MSZP, and Jobbik. Ibolya Dávid only yesterday predicted that MDF might manage to send not one but two delegates. She based her optimism on a public opinion poll done at the University of Szeged. Most analysts predict a low turnout because most people don't give a hoot about the European parliament or the European Union in general. The majority of Hungarians are euroskeptics. They simply don't recognize the advantages membership in the EU offers. Nézőpont Intézet (Perspective Institute), a political think-tank close to Fidesz, is the only one that is predicting a large turnout. I assume because the political scientists working there think that Fidesz's campaign slogans promising the immediate collapse of the current government in case of a huge Fidesz victory will inspire the Fidesz faithful that is always more eager to vote than the left liberals.

Until now the campaign was fairly lukewarm, especially on the left. Almost as if the socialists had given up. They know that they will lose big and it is not worth putting up a fight or spending a lot of money. Fidesz, as usual, has started campaigning vigorously. The campaign slogans have nothing to do with the European Union. From the posters and the television ads one would think that national elections are coming. The Fidesz slogan is: "Elég!" (Enough!). But enough of what? The European Union? Surely not: enough of the socialist-liberal supported government of experts. Fidesz is hoping that the MSZP loss will be so great that early elections will have to be held. The television ad I saw draws from the negative campaiging popular in the United States. This particular ad reminded me of the infamous Willy Horton ad of 1988 in which the Bush campaign pretty well accused Dukakis of murder by allowing criminals to spend weekends outside the prison. The Fidesz ad begins with a picture of Ferenc Gyurcsány that as the seconds go by morphs into the face of Gordon Bajnai while words like Lying, Raising Taxes, Corruption, Unemployment flash by. Then comes a snippet from the end of an old, staticky film reel. A huge bang, enormous orange letters "Enough! Vote!" I must say that it is a very effective ad even if I find it fairly disgusting. Here's the link; one doesn't even have to know the language: http://www.youtube.com/watch?v=UWTjSxDgH5c&feature=related  

As I said, MSZP was not hitting back. Their politicians kept repeating that it is not nice to wage an EP campaign as if it were a national election, but that was about all. Then a couple of days ago I noticed a change. A serious effort is being made to challenge the work of the Fidesz delegation to the European parliament over the last five years. At the top of the list is Pál Schmitt, former Olympic fencing champion. Schmitt likes titles and most likely the money that comes with each position. He is not only a member of the European parliament but also the head of the Hungarian Olympic Committee in addition to being a member of the International Olympic Committee. I don't know anything about his activities on the International Olympic Committee, but I do know that he is a pretty lousy chairman of the Hungarian Olympic Committee. At one point there was an attempt to unseat him, but he managed to remain and at the last election there wasn't the slightest sign of protest against his reappointment. Earlier his activities in Brussels flew under the radar, it turns out for obvious reasons. A few days ago Schmitt was asked to make an appearance before the Hungarian parliamentary committee on European affairs. MSZP members of the committee asked all sorts of questions pertaining to European affairs from him but he was unable to answer most of them. As it turned out, because of his many other obligations he rarely appears at the parliament's sessions. For example, he wasn't even present when the members voted on the budget. A budget that surely mattered for Hungary.

Kinga Göncz, former foreign minister in the Gyurcsány govrnment, called for a debate between Schmitt and herself. Not surprisingly he refused. He said: "If there is a debate I will do my best to avoid it." Not too subtle! Since a televised debate is out of the question, Göncz is trying to make Schmitt commit himself in writing. She posed ten questions to him in an open letter and added that she was expecting answers by Saturday. I doubt that Schmitt will answer, especially since some of the questions might be very uncomfortable not just for Schmitt but for Fidesz. The MSZP staff has been madly looking through the thin voting record of Schmitt and found quite a few skeletons in the closet. The most interesting to my mind is that Schmitt supported an amendment of the communists that would have limited the employment of Hungarians in other countries of the EU. Interestingly, Schmitt voted against a proposal that would have increased women's rights to remain at home after the birth of their children from a minimum of 18 weeks to 20.

Fidesz has also given elegant places on the EU list to prominent members of the party. Two founding fathers of Fidesz, János Áder and Tamás Deutsch, are the most interesting names. Both men held very high positions in the party as well as in the Orbán government. Of late both men faded into the background; then they resurfaced on the Fidesz list. The Áder nomination has mobilized the other side, and not only in Hungary. One problem is that he claimed that he speaks English. Some enterprising Hungarian youngsters purporting to phone from Brussels taped his responses to their requests for an interview in English. The youngsters' English was not exactly faultless, but it is very unlikely that Áder noticed that problem. Anyone wanting a good laugh should listen to this YouTube segment: http://www.youtube.com/watch?v=1qRpLY14lkU In fact, as far as I can see, Áder doesn't speak any foreign language. On the Hungarian Parliament's website he is said to have passed the beginners' German examination. Apparently that means that he has no appreciable knowledge of the language. There is another problem with Áder. The socialist caucus of the European parliament placed him on a black list they call "the list of the most awful candidates." There are twelve names on the list, including Nick Griffin, the British neo-nazi. Áder got on the list because he likened Ferenc Gyurcsány and his finance minister's handshake after the budget passed to the kiss of Leonid Brezhnev and Erich Honecker. As for Deutsch, no one has tested his competence in English, but at least he passed the intermediate English exam. However, with Deutsch there is another problem. He doesn't always know what he should and should not say. He blurted out that if Fidesz wins the elections some of the important Fidesz people currently in Brussels as well as the hopeful ones like Áder or Deutsch might leave Brussels in the greatest hurry to return to Budapest and once again play prominent roles in the party and government.

Meanwhile the socialists keep reminding the electorate that their members have been very active and have been doing outstanding jobs. MDF proudly announced that between Lajos Bokros and György Habsburg they speak fifteen languages. The socialists emphasize that their candidates speak at least two or three languages. The socialists outright demand the withdrawal of Áder's candidacy because, according to them, he lied about his knowledge of the English language. Gyula Cserey, a young MSZP candidate, is leading the charge against Áder. According to him the most commonly used languages in Brussels are English and French. What will Áder do there? Most likely not much, but I don't that matters either to Fidesz or to the party faithful.

Hungary and the European Union: Anniversary and elections

It was five years ago, on May 1, 2004, that Hungary along with nine other countries joined the European Union. Although the number of people voting at the Hungarian referendum to join the EU was modest, 85% of them voted in the affirmative. Since then enthusiasm has waned considerably. Only about 30% of Hungarians are happy with the country's EU membership. This is not at all surprising. In general Hungarians expect instant results, and not just small improvements but revolutionary changes. And when that doesn't happen they are deeply disappointed. Again, not just a little disappointed but fundamentally so.

Of course, Hungary is definitely better off inside the European Union than it would be outside of it. Just imagine what would have happened to Hungary, given its current economic woes, if the country had been entirely "independent." Left in the lurch.

A wonderful article by Marcus Mabry appeared in The New York Times on April 25, 2009. He was reporting on his first visit to Budapest since January 1989 when he was an exchange student in Hungary. Earlier he could see the remnants of former grandeur but there was also an "unmistakable sadness that hung over it." Now two decades later "Budapest had become a dream realized, full of world-class hotels, ubiquitous construction cranes, mansions and museums scrubbed clean.... The stores were full to bursting, with local products as well as global brands. Hungary, it struck me, was part of Europe again."

Yes, of course, Marcus Mabry is right, at least in terms of material well being. The only problem is that the natives don't see any of this. And some opposition politicians make sure that they focus only on the dark side of things. These politicians recite long lists of numbers that all prove that Hungary is the last, the very last in everything. Tibor Navracsics, head of the Fidesz caucus, just yesterday rattled off some very impressive numbers on the incredible strides countries in the region have made since joining the European Union. The GDPs of all the countries he mentioned have grown by thirty or forty percent. But then there was Hungary with an anemic nine percent! I haven't double checked these figures, but Fidesz is notorious for its inventions. For instance, we know that Estonia and Latvia were growing by leaps and bounds but then their GDP fell by 15 percent or so. Another speaker (Christian Democratic People's Party) complained that in his own region, close to the Austrian and Slovenian border, nothing but nothing has happened since 2004. Nothing was built, and Hungary is losing ground to its neighbors.

Although it is true that in the last three years or so Hungarian economic development has slowed, the situation is not as bleak as the opposition paints it. As Mátyás Eörsi (SZDSZ) noted in the course of the same parliamentary session, the situation cannot be described only in black and white. But he also noted something that perhaps Marcus Mabry couldn't quite see standing in front of the storefronts and the glittering façades--that although Hungary might be part of Europe physically, it is not so mentally. In other words, a large majority of Hungarians still don't act like "Europeans." Because as Gordon Bajnai said, again at the same parliamentary session, in western Europe the word "Europe" is only a geographic description. By contrast, in eastern Europe people talk about "behaving like a European." That is, in a civilized way. And I must say that as far as political discourse is concerned Hungary is not a "European" country.

Finally, I would like to mention the launch of the campaign for representation in the European Union parliament. As things stand MSZP will most likely do quite badly. Even five years ago Fidesz managed to send more members than MSZP, but this time everybody predicts a rout. Or rather it will be a rout if too many MSZP voters stay home. Whether the party will be able to inspire its followers to go to the polls I don't know. But Fidesz is taking nothing for granted; it is trying to ensure a high voter turnout among the party faithful and keeps striving to expand its base. Fidesz politicians stress that this election is important. Because it is not really about the European Union; it is a referendum on domestic politics. By voting for the Fidesz list voters will pass judgment on the Bajnai government. This emphasis on the domestic was so pronounced at the opening salvo of the Fidesz campaign that there was not one European Union flag anywhere to be found. But how many Hungarian flags behind the podium! Perhaps two dozen. Viktor Orbán, by the way, gave a speech that was perhaps his most antagonistic to date. He was yelling so hard that his voice kept cracking. He called his political opponents "petty thieves"; the crowd, in response, screamed: "To jail with them! To jail with them!" The guest speaker was Xavier Bertrand, secretary general of the French conservative party. I'm just hoping that he didn't know what Orbán was talking about. The Fidesz slogan is "New Direction" and the recurring theme in Orbán's speech was "Enough." I assume that "Enough" is enough of the socialist government and "New Direction" is where a newly elected Fidesz government would lead the country. A rather odd theme for  European Union elections, but of course we know that this election has absolutely nothing to do with the EU. 

The launch of MSZP's campaign coincided with the celebration of May Day that is customarily held out in Népliget, a large park. The socialists have a picnic with good food and beer. I think that they themselves were surprised to see that the crowd was as large as it was. They admitted that a year ago there had been more people, but under the circumstances it wasn't a bad showing. By the way, I couldn't find out how many people went to the Fidesz campaign launch, but my feeling is that it was a smaller crowd than the party anticipated. Normally they come out with a very high estimate, but this time they decided not to say anything about the size of the crowd. At the socialists' gathering there were the party leaders and the prime minister, all casually clad in jeans. That included Ildikó Lendvai as well as Kinga Göncz, the former foreign minister who leads the socialist EU ticket. Behind the speakers was the EU flag as well as the flags of all the members states, just as it should be. Here we heard about the benefits of EU membership, and Kinga Göncz came up with an idea that should have occurred to Hungarian politicians (or perhaps even all members of the European Union's Parliament)-- that the delegates should at regular intervals report to  their constitutents on the accomplishments of the parliament in Brussels. Also they should say what they themselves managed to accomplish for the good of the country. One thing is certain. The Hungarian public is woefully ignorant of European affairs and that is not entirely their fault. I am a very diligent follower of political events in Hungary, but there is hardly any news about the European Union in the media. Lately there have been some comparisons of the accomplishments of the socialist members versus those of Fidesz, but otherwise citizens of the European Union hear little about the politics of Brussels. It would be time to change this. Perhaps then there would be fewer Euroskeptics in the European Union.

Ferenc Gyurcsány swings into action

It is almost inevitable that when there is really big trouble, Gyurcsány's adrenalin surges.This was the situation in late 2005 and early 2006 when MSZP trailed far behind Fidesz and Gyurcsány launched an incredible campaign to sell MSZP and his program. Miracle of miracles the MSZP-SZDSZ coalition won the elections. In the process he even managed to rally the normally apathetic MSZP troops: for instance, a huge spirited crowd gathered at an outdoor meeting and enthusiastically sang the catchy campaign song.

A similar burst of energy can be observed in the last few weeks, especially in the last few days. Most likely because the European parliamentary elections are near, Gyurcsány's verbiage is becoming sharper. Until now he was very careful not to emulate the tone of Fidesz politicians, although Gyurcsány can be devastatingly sarcastic if he is aroused. He was merciless when he made fun of Tibor Navracsics in parliament on February 16 and yesterday when in a speech he called his opponents "political con-men."

Yes, Gyurcsány is full of ideas and spares no energy to promote them. His latest is that he wants the European Union to arrange a package of as much as 180 billion euros to help East European economies, banks, and companies survive the economic storm. Here he is competing for attention with Viktor Orbán who on February 22 in Vienna scolded the west for not keeping its end of the bargain by not helping eastern Europe. He referred to a "contract" that had been broken, though it is not at all clear to me what contract Orbán was talking about. A couple of days earlier he apparently had talks with the prime ministers of Poland and the Czech Republic about some kind of cooperation among the East European countries. Today Orbán had a 50-minute talk with Angela Merkel. Since Merkel said nothing about the conversation with Orbán we have only Orbán's description of the meeting. According to him, he made three suggestions. (1) Western banks should resume cash flow to their branches in the region. (2) The European Central Bank should sell euros under the same conditions to non-eurozone countries as within it. And (3) Western governments should urge their companies to continue their investments in Eastern Europe. He didn't divulge Merkel's reactions, though he remarked that "minds are already open but not the pocketbooks." Orbán is even more ambitious than Gyurcsány: he wants 350 billion dollars or 276 billion euros. I think one can count one's blessing if Gyurcsány's suggestions bear fruit. Orbán's surely won't. For one thing, however bright his political prospects may be, he is not currently a major player on the international scene.

Gyurcsány already gave a name to his 180 billion euro plan: the European Stabilization and Integration Program. It would include short-term financing for governments, restructuring of private debt, capitalization of banks, and liquidity for companies in twelve different countries. Gyurcsány will present his plan at the March 1 European Union summit in Brussels. The Hungarian government already warned the Hungarian public not to expect results at the summit. It is not enough to convince the Western European leaders of its necessity; the plan would have to be put in place, which as we know only too well can be a daunting task. The program would help Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Romania. In addition two non-EU countries would benefit: Croatia and Ukraine. Meanwhile the European Bank for Reconstruction and Development and the World Bank launched major lending programs. The EBRD will lend 11 billion and the World Bank about 7.5 billion euros.

Gyurcsány has another favorite plan: to shorten the waiting period for admission to the euro-zone. Hungary has substantially reduced its deficit in the last two years. Right now the deficit is under 3%, comfortably below the 3.5% insisted on by the European Union. Inflation not surprisingly will also be low. Most likely well under 3.5%. According to the current rules Hungary would have to wait two years while holding the current figures before admission. This is what Gyurcsány would like to change. It seems that Poland will support the Hungarian proposal to shorten the waiting period. Whether the proposal will find support outside of the region is questionable. But Gyurcsány can be very persuasive. If he manages to pull this off his chances at the polls in 2010 would greatly improve. 

Economic Cacophony in Hungary?

At least according to Tibor Erdős that's what's going on right now in Hungary. One doesn't hear as much from Tibor Erdős as, let's say, from Lajos Bokros or László Békesi. Most likely one reason is his age. He was born in 1928. But the few times he speaks or writes it is worth listening to him.

Uncharacteristically, he wrote two articles that appeared in quick succession in Népszava. The first on February 19 with the telling title "Cacophony" (Hangzavar) and the second on February 26 ("Four serious problems"). In both Erdős tries to shed light on the complexity of Hungary's economic situation. Without pointing fingers he makes it clear that the reform economists don't realize that some of their remedies would actually deepen the economic crisis. Such as major cuts in spending. He also discards major tax cuts because the resultant growth in demand would only add to the country's dependence on imports.

So what should the government do? They should stimulate segments of the economy that would provide jobs and would not rely on exports. For example, investments in infrastructure. Moreover, such investment would be useful in later years once the country's economy rebounds. Investments in small and middle-sized Hungarian companies that target the domestic market would also make sense. Such investments are well suited for projects financed by the European Union. Let me add that it seems that this is exactly what Gordon Bajnai, minister in charge of economics and transport, is trying to do.

As for cutting back on spending, Erdős is cautious. He recommends restructuring expenses rather than decreasing the size of the total package. For example, he, like many others, suggests reducing the number of institutions of higher learning. I don't think he would go as far as Lajos Bokros, who would shutter over 60% of these institutions, leaving only 25 of the current 70+ institutions standing. But he would close those institutions that are not worthy of support. It might even help standards, which are fairly low at the moment. Practically anyone who finishes high school can enter some kind of college.

As for reforms. Yes, Erdős says, reforms are necessary but "reform economists and politicians, attention! Be cautious when it comes to reforms in the middle of an economic crisis. Introduce them after the crisis is over." Basically, if I read Erdős right, he endorses the government's program and warns politicians not to get too enamored with the radical suggestions of the reform economists. And this piece was written before the Reform Alliance gurus came out with their plans. Of course, it is possible that Erdős already knew what was brewing. After all, he is an academician, and in Budapest everybody knows everybody, especially within the same discipline.

Although Erdős's ideas are close to the government's proposals (and I wouldn't be surprised if he were one of the advisors the government consulted with) in one aspect he goes against the common wisdom. He suggests that the budget deficit requirement be loosened. A slightly higher deficit would help the country's recovery. That is most likely true, but what about the highly desirable Eurozone membership? Everybody thinks that Hungary should join as quickly as possible, and the government seems to be making some efforts to shorten the waiting period for countries that achieve the requisite inflation rate and budget deficit. The waiting period at the moment is two years. From what Hungarian politicians drop here and there one has the distinct feeling that for the moment at least the introduction of the euro is uppermost on the Hungarian government's mind. They are especially anxious about joining as soon as possible because the weakening forint is a real threat given the high percentage of outstanding loans payable in foreign currencies.

Well, Erdős's warnings didn't make an impression on certain Hungarian politicians. The cuts recommended by the economists of the Reform Alliance are embraced by SZDSZ and MDF. Both parties adopted the plan as their own, and parliament will vote on the question of whether the plan should be an agenda item, subject to the vote of the full parliament. I would wager to say that it will be dead on arrival. MSZP won't vote for it, and Fidesz is adamantly against any cuts in benefits and entitlements. Yet in order for the government's bill to go through they need some votes from either MDF or SZDSZ. So I'm almost sure that certain parts of the reform proposals will be incorporated into the final package to appease the enthusiasts of the Reform Alliance. I do hope that, in the give and take, they won't forget Tibor Erdős's warnings.

Fidesz and the European Union

In the last two or three days the news has been full of two new Fidesz initiatives. The first was actually a warmed-up idea: to dissolve parliament and hold national elections on the same day that the country will vote on Hungarian delegates to the European Parliament. Fidesz had planned to introduce this proposal tomorrow, during an extraordinary session of parliament convened specifically to discuss the economic crisis. But it was moved forward: Tibor Navracsics announced the Fidesz proposal on the very day when half of Europe's leaders gathered in Budapest to discuss the question of the Nabucco project. Well timed, according to communication experts: the Hungarian public will not talk about the country's success in taking the initiative in a European project aimed at solving the continent's reliance on Russian gas. Rather, the media will be full of news about the fate of the Gyurcsány government.

One internet newspaper, Hírszerző, well known for its editors' intense dislike of the prime minister, is already speculating about the date of the Gyurcsány's government departure: two weeks and gone forever. Every time I read something like that I can't get over the political ineptitude of some of the Hungarian journalists and political analysts. After all, it is clear that neither MDF nor SZDSZ would be stupid enough to support Fidesz in this endeavor. Indeed, the proposal is already dead in the water: SZDSZ announced that they wouldn't even vote to bring the Fidesz suggestion to the floor tomorrow. Ibolya Dávid said that MDF would vote for the dissolution of parliament if Fidesz would reveal the party's plans for handling the economic crisis. Of course, we know what that means. Fidesz has no plans or, if it does, it doesn't divulge them. The typically impertinent Fidesz answer came swiftly enough: perhaps Ibolya Dávid should pay attention to what's going on in the country instead of galavanting all over the world.

The second stone that was thrown in the water was new: Fidesz decided to make a frontal attack on Hungary's membership in the European Union. Yesterday there was a Fidesz gathering in Miskolc. This is a yearly affair dubbed "Talks about the Future." The main speaker was Tibor Navracsics, head of the Fidesz parliamentary delegation; Mrs. Pelcz neé Ildikó Gál, a native of Miskolc and one of the four deputies of Viktor Orbán, also spoke. There was no question that both quite openly questioned Hungary's membership in the EU. MTI reported it, and Magyar Nemzet gave a fairly detailed description of the two speeches. According to the MTI report Navracsics announced that there are many people who question the advantages of the membership "and thus we are in a situation in which we will have to reevaluate many things, including our membership" in the organization. That is clear enough. Mrs. Pelcz added that "Hungary is unequivocally the loser in the deal." According to Navracsics, "many believed that at last we will be a European country" but instead there is an economic crisis, a recession, massive unemployment. It seems that all this happened because Hungary is part of the European Union.

Well, let's start with the obvious question. What does it mean that one should reevaluate Hungary's membership in the European Union? There is no such option as renegotiating the terms of membership. There is only one choice: to stay or to leave. And I assume to give back all the billions of forints Hungary received from the EU. But then what does Navracsics mean? Why did he, who undoubtedly knows better, utter such drivel? The only thing I can think of is that this is once again an attempt to bring the far right that is virulently anti-Union under the Fidesz tent. But this doesn't make a lot of sense because it was only recently that Viktor Orbán talked about the European Union and transatlantic connections in glowing terms. Fidesz considers the forthcoming EU elections vital. They want to show their party's strength by wiping MSZP off the face of the earth. But if the EU is harmful to Hungary, why bother?

Well, it seems that Navracsics thought the better of it and the very next day tried to explain the whole thing away. He didn't mean to reevaluate Hungary's membership in the European Union. Instead, "one ought to think through whether Hungary in the last five years has managed to use the opportunities offered by the membership." This, of course, was not what he said. If this had been his clear intent,   why did László Csaba, the economist close to Fidesz who was present at the meeting, say: "it is decidedly better to be inside of the European Union than outside its gates."

The Navraciscs statement seems to have been part of a Fidesz trial balloon. After all, Mrs. Pelcz was at the meeting to lend ammunition to the position, and earlier László Varga, another deputy chairman of the party, made a similar very critical remark about Hungary's membership in the EU. But the balloon didn't exactly soar.

And that's nothing. Today it was reported that the EU will contribute 250 million euros toward the cost of the Nabucco project. That must hurt.

Miserable times?

Today to spice things up I'm going to interlace a few quotations from Warren Buffett, probably the least materialistic billionaire on the planet, with my summary of EU economic forecasts. Let me start with one that encapsulates so many of my vents: "The smarter the journalists are, the better off society is. For to a degree, people read the press to inform themselves--and the better the teacher, the better the student body."

I'm coming to the conclusion that Hungarian journalists use adjectives to describe the state of the economy or politics that are seldom used in English. In English-language media one is hard pressed to find adjectives like "deplorable," "lamentable," or "miserable" when describing the current economic crisis (though Warren Buffett, who is not prone to using trite adjectives, said that the U.S. is in the midst of an economic Pearl Harbor). I actually looked around on Google News and found no equivalent to describe the European Union's latest prognosis for its member economies in 2009.

Yet this is exactly how Népszava introduced the latest figures. Actually, the prognosis is not as bad as I had imagined. Of course, economic prognoses are not very reliable, particularly in volatile markets. Again, let me quote Warren Buffett; just substitute economic forecasters for stock forecasters: "The only value of stock forecasters is to make fortune tellers look good." The upshot is that for the eurozone they predict an average decline in GDP of 1.9% while for the non-euro countries 1.8%. They project that Hungary's GDP will decline by 1.6%, though the Hungarian government thinks that this figure is too optimistic. The prediction for 2010 is even better: a growth of 1.0%. This is what Népszava considers to be "deplorable, miserable, lamentable," take your pick. The fact is that although a recession is never pleasant, one ought not to exaggerate its effects by predicting "lamentable" or "miserable" times. Yes, they will be difficult but not miserable. The 2009 projections, for what they're worth, are worse for Germany and the U.K. (-2.3% and -2.8%).

Why are the economists of the European Union in Brussels so optimistic? First of all, they hope that accelerated government expenditures and growing investments will help the situation. In addition they think that lower inflation rates may stimulate consumption. (Yes, but think back to Econ 101: if you think that prices tomorrow are going to be cheaper than prices today, you'll hold off on your purchases.) According to the explanation attached to the predictions, "the different governments last August reported certain investments that will lessen the drop of GDP by 0.75%." Still the picture is grim, especially when it comes to unemployment. (Don't forget that unemployment is a lagging economic indicator, usually not righting itself until a few quarters after the economy does). They figure the loss of 3.5 million jobs. The predicted average unemployment figures will be 8.7% in the EU as a whole;  within the eurozone it will be even higher, 9.25%. Moreover, although there might be some economic recovery in 2010 they expect even higher unemployment figures for that year. Inflation, on the other hand, will moderate. In 2008 the inflation rate in the EU was 3.7% (in the eurozone only 3.3%) while for 2009 they figure 1.2% (in the eurozone 1.0%).

As for Hungary, unemployment will grow by 2.0% this year and by 0.4% next. That means an unemployment rate of 8.8% in 2009 and and 9.1% in 2010. Inflation this year will be 2.8% and next year 2.2%. These figures are higher than what the government predicts. Miserable? Lamentable? Well, it's not ideal, but I would refrain from using such adjectives. They don't do much for the soul, especially when the Hungarian figures, all in all, are not even that bad. They may get worse and then what? Journalists will have to come up with a new set of death spiral adjectives. And, to quote Buffett again, "Let blockheads read what blockheads wrote."

Courting the European Union

It seems that Viktor Orbán has decided to be an enthusiastic promoter of the European Union. This is somewhat surprising because until now Fidesz was fairly critical of the Union and Magyar Nemzet, a paper very close to the party, was often outright antagonistic. After all, the EU is a supranational organization in which the individual states had to give up certain prerogatives and had to adjust a number of laws in order to meet EU requirements. And because the Hungarian right is deeply nationalistic, any kind "infringement" of national prerogatives cannot be popular in those quarters.

Orbán's critics often mention a rather unfortunate answer to a reporter's question on December 17, 1999--that is, while he was prime minister. The question was what would happen if Hungary was unsuccessful at joining the EU in 2002-2003. Orbán's answer, most likely intended to be whimsical, was: "It won't be a tragedy if our membership doesn't materialize in 2003. We are not a member of the Union now and, as you can see, there is life outside the European Union." It's true that he added that "we try to hasten integration because that would help our economic growth." But, of course, the sentence often repeated is: "there is life outside the European Union." One of those glib answers that often backfire.

But even if we don't take Orbán's 1999 remark at face value, one must emphasize that on the whole Fidesz has been much more critical of or at least less enthusiastic about the European Union than MSZP or SZDSZ. In an apparent about face Orbán now enthusiastically stands for closer cooperation. He is calling for a strong Europe and a strong Hungary. A fairly lengthy article of his appeared in Magyar Nemzet (January 10) entitled "Stronger Hungarian nation, stronger influence." And in case anyone has forgotten: "Written by Viktor Orbán, former prime minister, chairman of Fidesz." Typical Hungarian title mania. An aside: once I wrote a letter to the editor in a Hungarian weekly in which I happened to mention the name of a man who was an associate professor at one of the Hungarian universities. Soon enough there was an answer from the man. He quoted a couple of sentences from me verbatim, or rather, almost verbatim. Where I referred to him without any title, he put Dr. in front of his own name within quotation marks! Pitiful!

Back to the former prime minister. At the beginning of the article he criticized the very paper in which his article appeared because Magyar Nemzet "often cries wolf"and talks about the horrible dangers facing the country from the European Union. After boasting about his "experiences of fifteen years with the European Union" (again a bit of an exaggeration) he claims that these kinds of arguments are  dangerous for Hungary and the Hungarians.

I assume that his sudden change of heart toward the European Union is based on two considerations. First, in a few months there will be European parliamentary elections where Orbán very much wants to show a substantial lead at the polls. I, for the time being, assume that neither SZDSZ nor MDF will have enough votes to be able to send delegates to Brussels. Currently, SZDSZ has two members, MDF one. Fidesz was the big winner five years ago. The party sent twelve members to Brussels while MSZP managed only nine. Now Fidesz wants to do even better than that. Orbán reasons that if MSZP does worse than it did in 2004 the party will get rid of Gyurcsány. Orbán also assumes that a strong showing of Fidesz at the European Union elections will further his chances in 2010 at the national elections. Second, Orbán is fairly sure that he will win the next elections and thus will become prime minister again. But his reputation within the European Union is not exactly sterling. Statesmen in Europe remember him as a troublemaker, they think he is a nationalist and a populist whose very presence in politics, domestic or pan-European, doesn't bode well for the future. Orbán with this laudatory article surely wants to calm the nerves of those who are not too enthusiastic about him. He wants to present himself as a responsible, serious politician.

First Orbán lists some of the shortcomings of the EU: too bureaucratic, too far from the average European citizen, discriminative practices among member states, and so on. Orbán especially finds it upsetting that certain Western European countries still don't allow workers from the Eastern European nations to work within their borders and that the new countries receive reduced agricultural subsidies. Orbán as a Hungarian shouldn't worry about the restrictive labor policies of certain countries. Hungarians, on the whole, are not mobile; when a few people accept jobs in Sweden or in England there is an outcry at home.

But after the few complaints Orbán moves on to the positive side. The European Union "often defends the Hungarians from their own government." I'm a bit baffled by this statement but the next sentence helps: "The norms of the Union often serve to keep the MSZP government on the straight and narrow." So, if I understand it correctly, if Hungary were not a member of the EU the MSZP government would trample on the democratic rights of the country's citizens. And he continues with all the pluses the EU brought to Hungary. If Hungary hadn't been a member of the EU "the country would have been bankrupt a long time ago." If Hungary weren't a member of the Union no one would invest a penny in Hungary. The only reason that foreign companies are still coming to Hungary "in spite of Medgyessy's and Gyurcsány amateurism" is that they feel more secure knowing that Hungary is a member of the EU. Finally, one ought to be grateful to the European Union because without it "the Russian economic expansion within the country" would be much greater. Another puzzle to solve in Orbán's rhetoric.

He further praises the European Union for not interfering in the internal affairs of its member countries. For example, people who are happy that Ireland torpedoed the new EU constitution that would have created a stronger Europe are upset over the EU not telling the MSZP government off. You can't have it both ways, says Orbán, and he actually votes for a stronger Europe with a common foreign policy and closer economic cooperation in order to succeed in the global economy. He calms Hungarian nationalistic nerves: don't worry, the nation states are as strong as ever and will remain so into the foreseeable future.

What will this strong Europe and within it a strong Hungary be like according to the Orbánian vision? 1. It should be very, very free and should make sure that all member states are free. For example, "we, Hungarians, expected more from the European Union when on the streets of Budapest the rights of people were mercilessly trampled on.... One needs a Europe that could defend its citizens if necessary even against their own governments." (I guess this is an exception to the principle that the EU should not interfere in the internal affairs of its member states.)  2. There ought to be a common economic policy, and he says a few flattering words about the "French role" in this respect. (Perhaps Sarkozy will forget his unfortunate encounter with Orbán in Budapest.) 3. The Union should get involved in minority questions. Again, a typical Hungarian demand. Somehow the European Union should involve itself with the question of Hungarian minorities in Slovakia and Romania. (I very much doubt that the EU would get entangled in this rather unpromising enterprise.) 4. The EU should develop a common energy policy. 5. Europe should have unitary foreign policy with a foreign minister at the helm. This seems to be necessary because of the fear of Russian aggression. (Common foreign policy is really a must but not just because of Russia.) 6. There is a need for a common agricultural policy. 7. The European Union doesn't seem to be able to save its citizens from bad products coming from outside. Especially worisome are spoiled foodstuffs. (That is interesting because Hungarian farmers even complain about the "junk" that comes to Hungary from other EU countries.) 8. Hungary is not helping its families and therefore there is a decline of its population while in other European countries promising steps have been taken. (As far as I know the whole European situation is pretty dismal in this respect.) 9. For Hungary it is especially important to defend the borders of the European Union against criminals and terrorists. 10. Europe's interest is education, innovation, and learning. Hungary has to rethink its whole philosophy of education. (Again? Once Fidesz completely undid everything the earlier government had done. Another "reform" would be devastating and most likely not a step in the right direction.) Orbán does mention the poor quality of teaching foreign languages. (This is certainly true, but improvement here cannot occur overnight. One needs teachers who actually know the foreign language they teach.)

According to Orbán the major lesson that should be learned is that Hungary needs a strong Europe and Europe needs a strong Hungary. Hungary is at a crossroads. Well, well. What a different tone. However, one has learned to expect such twists and turns in Orbán's political thinking.