Prime minister has cultivated a group of friendly businessmen in what critics call crony capitalism
Across the road from Viktor Orban’s modest farmhouse in his childhood village of Felcsut stands a temple to the Hungarian prime minister’s passion: football. With a slate roof and wooden supports evoking illustrations from Hungarian folklore, the Pancho Arena — from the nickname of Ferenc Puskas, widely regarded as the country’s greatest footballer — seats 3,800.
The population of Felcsut, about 45km west of Budapest, is little more than 1,600. At the end of the road runs a narrow-gauge railway along which, three times a day, a little red tourist train chugs 6km to an even smaller village, Alcsutdoboz, where Mr Orban lived until he was 10.
The train, closed in the 1970s but reopened last year with €2m EU funding, is largely empty most days. The railway and stadium have been pilloried by the prime minister’s critics as vanity projects. But they have something else in common. Both were built, in part, by Felcsut’s mayor, and a childhood friend of Mr Orban, Lorinc Meszaros.
Corruption is a harmful, but widespread phenomenon in Hungary, which is part of the everyday life and the politics. It affects the government’s relationship with the EU, the USA and Russia too. But why is it growing nowadays? What is the role of bribery in Hungary, a country led by the prime minister Viktor Orbán since 2010?
Corruption or “mutyi”- a term recently popularised by the Hungarian media – is no longer considered an outstanding phenomenon in Hungary. With a silent consent of the Hungarian society, bribery became a part of everyday life during the soft dictatorship of the Kádár-era; people still pay additional sums to receive better service in hospitals or faster administration in offices.
In a dry clearing of woodland in southern Hungary, there is the drone of wood-chippers and rumble of earth movers. Dozens of men are clearing the ground for what Viktor Orban, Hungary’s prime minister, believes will be a solution to the country’s worsening migration crisis: a 175km steel and barbed wire fence along its flank with Serbia.
More than 80,000 migrants have crossed this stretch of land into Hungary — and the EU’s passport-free Schengen zone — so far this year, placing the country on the route of a trail that begins as far away as the fields of Kunduz in Afghanistan and the bombed-out streets of Aleppo in Syria.
But Hungary’s Balkan borderlands are now set to become the choke point for what has become Europe’s most heavily travelled migration route. Many expect the €20m fence — which should be finished by November — to trap thousands in neighbouring countries such as Serbia and Macedonia, where migrants say they face police violence and extortion.
The fence has attracted criticism from migrant rights groups, the UN’s refugee agency and the European Commission. Serbia’s government, which was not notified of the plans in advance, reacted with alarm to the decision to seal the border but has pledged to boost border security co-operation.
“I am not sure whether the fence between Serbia and Hungary will help that country protect itself against mass influx of asylum seekers,” said Nebojsa Stefanovic, Serbia’s minister of the interior. “However, we cannot interfere with decisions of neighbouring countries that are within their exclusive competence.”
Mr Orban, who has linked unmanaged immigration to terrorism, insists border security is a national obligation. But since the plan to build the fence was announced, the numbers detected crossing the border have only increased, sometimes reaching more than 1,500 a day.
Even though the vast majority of those have left to try to reach Germany and other more prosperous countries, daily arrivals are straining Hungary.
The surge has become especially noticeable outside train and bus stations in towns such as Szeged in the country’s south, where city authorities have set up a makeshift help centre complete with fresh water taps, stocks of sandwiches and power sockets for migrants to charge their phones.
But not all are so welcoming. Anti-immigrant vigilantes have begun patrols along the border, in search of migrants who have escaped the attention of border police who use heat-seeking cameras, dogs and sometimes helicopters to monitor the area.
Just a few kilometres away, on the other side of the planned fence, dozens of Afghan migrants appear at an abandoned brick factory near the town of Subotica to receive food from Pastor Tibor Varga, who runs the Eastern European Mission, a Christian charity.
“I don’t know what will happen with this fence; I don’t think it will help Hungary stop the situation. It may mean more people being trapped here in Serbia and I don’t know how that will end,” says Pastor Varga.
One of the men at the factory, which migrants call “the jungle”, is Muhammed Bilal, a network engineer, who says he left Kunduz in Afghanistan because of violent attacks by the Islamic State of Iraq and the Levant, known as Isis.
Mr Bilal and his friend Tlha Jan from Jalalabad have travelled for more than a month in the hope of reaching Germany. Mr Jan says Bulgarian police stole his phone and $500 in cash before breaking his ribs and beating his feet with hammers. His toes are black and swollen.
“Now our journey has gotten more dangerous,” says Mr Bilal. “This morning, a person told us the Hungarian government plans to make a fence along the border. But that takes time; we will get across in the next few days.” he adds.
Hungarian ministers say the country has less than 3,000 residential places for asylum seekers, while the number arriving this year alone is more than 20 times that figure.
Very few applications for asylum are completed as most abscond to continue their journey. Lawmakers in Budapest last week approved measures that could see asylum applicants pushed back to neighbouring countries such as Serbia.
But Amnesty International has warned that illegal migrants deported from Hungary face multiple human rights violations in Balkan countries.
Although the new rules and the planned fence have yet to stem the flow of migrants, observers say the government’s rhetoric has hardened the public’s attitude towards migrants.
A recent poll commissioned by conservative magazine Heti Válasz, showed 63 per cent of respondents believe immigration poses a threat to Hungary’s security.
Opinion polls also indicate another trend: since Mr Orban announced the planned border fence, support levels for his governing Fidesz party have risen at the expense of the radical rightwing Jobbik party, ending an eight-month trend of declining approval ratings.
European Union leaders face many intractable problems: what to do about Russia, the growing Islamist threat within and beyond its borders, and last but not least the populist backlash shaking the political landscape in a number of countries.
In this last respect, Hungary, and the rise in political extremism there, is a case in point.
Europe has a problem with Hungary, so much so that the European Commission President, Jean-Claude Juncker, was recently overheard calling Hungary’s leader a “dictator” upon his arrival at an EU summit.
The remark was hastily dismissed as a joke, even though it betrays wider European concerns about an apparent weakening of civil institutions and a backlash against civic groups in the country.
Hungary’s Prime Minister, Viktor Orban, is an interesting political case study.
He began as a darling of those on the side of political freedoms, with his strident anti-Communist background.
Yet that all seems a long time ago now.
He hasn’t been helped by Hungary’s economic problems.
The global economic crisis of 2008 hit Hungary hard, leading to an international bailout.
His ruling Fidesz party insists on a version of Hungarian history that stresses Hungary’s fate as a victim of World War Two – although government ministers have also acknowledged the country’s shared responsibility for the Holocaust.
All this helps garner support in Hungary itself, and not just from those who are attracted to the political extremes.
Many Hungarians approve of Mr Orban’s populist and Eurosceptic approach.
They believe Brussels has no real idea of the scale of the challenges facing the country and the institutional and social legacy left behind by decades of political and social neglect under Communist rule.
They argue that one-size-fits-all solutions and liberal orthodoxies are too simplistic and one-dimensional.
And yet, rather paradoxically, overall support for the EU remains strong among Hungarians.
That must be in part due to the financial realities.
The EU gives more than €5bn (£3.7bn) in financial support to Budapest – some 6% of Hungarian GDP.
But the question for some is what does the EU get in return?
The Orban government, like those of Slovakia and the Czech Republic, is a sharp critic of EU sanctions against Russia over the conflict in Ukraine.
More recently, Hungary’s leader attacked fellow EU leaders for what he called their “absurd, bordering on insanity” proposals for migrant quotas.
To his European critics, Mr Orban is a serial offender when it comes to what they call European values, such as respect for human rights.
The row with Europe over the possible return of the death penalty in Hungary is just the latest example. It won’t be the last skirmish of its kind.
In the wings lurks the increasingly popular nationalist party, Jobbik, which has openly anti-Semitic supporters.
A Jobbik MP came to wider public attention a little while back for openly spitting on a Budapest Holocaust memorial.
A few years ago, another leading Jobbik figure claimed, during a debate on the Middle East, that people in authority of Jewish ancestry “pose a national security risk”.
The party has contributed to a worsening of relations with the Roma, Hungary’s biggest ethnic minority community.
The Roma population, which lives on the fringes of Hungarian society, has faced persecution and discrimination for centuries.
Jobbik’s success continues to rattle the government of Hungary.
As recently as April, Jobbik won a parliamentary seat previously held by the ruling Fidesz party.
All in all, the political momentum appears to be with Jobbik. And as the party gets stronger and nearer to its ultimate goal of supreme power, it appears to be cleaning up its act.
The party’s leader, Gabor Vona, insists he is determined to rid the party of its unsavoury elements and reposition it as a people’s party like the German CDU or CSU, in a bid to win outright power in the next general elections, due in 2018.
He has been turning down the volume when it comes to the party rhetoric.
“Whoever has a romantic Nazi yearning… has no place in this party,” he declared at a recent political gathering.
Mr Vona appears to want to shed the party’s extremist origins, stay in the EU and work with foreign businesses.
Critics say this is a sham, a cynical ploy to win votes.
In a recent speech in Budapest, the World Jewish Congress leader, Ronald Lauder, said Jobbik’s rise was hurting Hungary’s image abroad.
His voice matters: Hungary is home to one of Europe’s largest Jewish communities, but one recent poll suggested a third of Hungarians expressed anti-Semitic views.
None of this is necessarily helping Hungary’s position in the group of EU nations.
It is worth remembering what happened when a far-right party entered into a governing coalition in Austria, back in 2000.
The Freedom Party’s success led the rest of Europe to give Vienna the cold shoulder.
That political reality is probably one of the strongest cards left in the hands of the Hungarian leader.
His combination of nationalist populism and state control of key areas of the economy still rules the roost, for now at least.
Last week, the EU also had to contend with its Hungary problem—one that hinges on similarly tricky questions of where the boundary lies between the powers of the EU and the sovereign rights of its member states.
At a specially convened session of the European Parliament to discuss the situation in Hungary—the fifth such session since Prime Minister Viktor Orban returned to office in 2010—a senior European Commission official threatened to suspend Hungary’s EU voting rights if Budapest pursued policies the Commission considers contrary to “European values.” Mr. Orban’s crime?
To have floated the idea that Hungary might restore the death penalty, and to have commissioned a public consultation on immigration that many say is divisive and discriminatory.
This isn’t the first time that Mr. Orban has fallen foul of Brussels over his allegedly cavalier attitude toward European values, as defined in the EU Treaties, which includes respect for democracy, human rights and the rule of law. In 2012, the EU started infringement proceedings against Budapest for limiting the independence of the Central Bank and the data protection authority, and for compulsorily retiring 274 judges.
He has also been criticized for attempts to control the media, including via a controversial Internet tax, and his replacement of officials at state institutions with supporters of his Fidesz party.
Many Europeans are also alarmed by Mr. Orban’s attempts to promote a nationalistic version of Hungarian history that glosses over inconvenient episodes, including the cooperation of Hungarian authorities in the Nazi genocide. Neighboring countries have been unsettled by his talk of “communal rights” for ethnic Hungarian minorities.
He has been critical of the EU response to Russia’s annexation of Crimea and the crisis in Ukraine. At a summit last week, Commission President Jean-Claude Juncker was overheard jokingly calling Mr. Orban “the dictator.”
Of course, Budapest rejects the charge that it is flouting European values. Instead, it accuses Brussels of adopting narrowly defined one-size-fits-all rules that take insufficient account of the challenges faced by a country still confronting the legacy of communist dictatorship.
The EU model of a liberal market economy can’t simply be supplanted into a society with no tradition of independent institutions, and in which the state has always played a leading role. Hungary was initially very successful in attracting foreign investment after the collapse of communism, but many citizens are disillusioned that, after 25 years, gross domestic product per capita remains less than 40% of the EU average.
Mr. Orban’s own conversion from young leader of the anticommunist movement to enthusiast for the “illiberal state” was in part shaped by Hungary’s experiences during the global financial crisis. This exposed deep vulnerabilities in its economic model, including an over-reliance on foreign capital to fund large budget and current account deficits and a banking system recklessly over-exposed to Swiss-franc denominated mortgages.
When the crisis hit, the Socialist Party was forced to turn to the International Monetary Fund for aid and a caretaker government embarked on deeply unpopular cuts to pensions and benefits and a public-sector wage freeze. In the 2010 elections, Mr. Orban won by a landslide.
The lesson Mr. Orban drew from the crisis is that Hungary needed to make itself more self-reliant. His program has focused on addressing the imbalances, reducing the budget and current-account deficits and reducing the reliance on foreign capital.
A flat tax of 16% was introduced on income and capital with the aim of generating higher domestic savings to fund the government debt. He also forced banks to convert Swiss Franc mortgages into Hungarian Forint mortgages to remove a key element of exchange risk from the economy, thereby paving the way for the forint to fall and allowing the central bank to cut interest rates.
At the same time, he has pursued controversial policies aimed at bringing key parts of the economy back under domestic ownership, including the banks, utilities and media.
At one level, Mr. Orban’s policies have proved remarkably successful. The imbalances have been substantially reduced. Hungarian officials point out that the country is closer to fulfilling the criteria for eurozone membership than most current members. The mortgage conversions averted disaster after Swiss National Bank abandoned the franc’s peg to the euro this year.
More recently, the Hungarian National Bank has been able to cut interest rates, providing a welcome stimulus to the economy, which grew by 3.6% in the year to March, assisted by the recovery in Hungary’s key eurozone export markets.
Nonetheless, critics say Mr. Orban’s unpredictability is damaging the economy, driving away foreign investment. Foreign banks, hit hard by heavy losses on the mortgage conversions, are scaling back exposure to Hungary. The long and deep recession has also increased the number of Hungarians living below the poverty line to four million out of a population of 10 million.
Although unemployment is officially 7.8%, this partly reflects Mr. Orban’s creation of a government jobs program that has taken 400,000 off the dole queues while a further 500,000 Hungarians have emigrated. That is fuelling support for the right-wing Jobbik party, which has been gaining sharply in the polls and emerging as the main opposition ahead of a fragmented left.
Does that mean the EU’s Hungary problem is doomed to descend into a Greek or U.K.-style stand-off? Not necessarily. Even Mr. Orban’s opponents acknowledge that while milking his disputes with the EU for domestic advantage he knows when to back down. Meanwhile support for EU membership remains high.
Even Jobbik now claims to be a pro-EU party. That may have something to do with the €5 billion-€6 billion of EU funds—equivalent to 5% of GDP—that flowed from Brussels to Budapest last year. After all, that’s one European value that is universally recognized.
Thousands of demonstrators gathered in Budapest on Sunday to protest the Hungarian government’s Internet tax plan.
The Internet tax plan was contained in a draft legislative package for next year.
If passed, Internet service providers will have to pay 150 forints (62 U.S. cents) for each gigabyte of data downloaded by users.
Balazs Gulyas, who founded the Facebook page “One hundred thousand against the Internet tax,” called on the government to withdraw the bill.
Addressing protesters in front of the economy ministry building, Gulyas said the government had 48 hours to withdraw the bill. If the government fails to do so, they will demonstrate again on Tuesday, he added.
The crowd then moved to Heroes’ Square. Some protesters left the square and went to the Fidesz party headquarters where police lined up. Some people threw used computer parts at the building, damaging windows.
Violence offers no solution to anything, the Fidesz party said in a statement, adding that it was open to dialogue and prepared to submit an amendment to the bill.
Small-scale demonstrations against Internet tax were also held in cities like Miskolc, Pecs and Veszprem.
Opposition parties MSZP, LMP, E-PM, DK and Jobbik criticized the Internet tax proposal and supported the demonstration.
When foreign ministers from 106 nations met in June 2000 to sign the Warsaw Declaration Toward a Community of Democracies, Hungary was a poster child for the Community’s vision.
The country’s emergence from Soviet dominance and rapid democratic development confirmed the conventional wisdom that democracy was the only legitimate form of government — and that the 21st century would see the establishment of a new democratic world order.
In 2011, Hungary joined the governing council of the Community of Democracies. But at a U.N. meeting last month, the Community set in motion a process that could result in Hungary’s removal from the council and withdrawal from the Community.
If Hungary leaves, it will be an international acknowledgement that the nation has ceased to be a democracy.
The Community of Democracies, one of the world’s leading democracy clubs, is an intergovernmental coalition of states committed to cultivating democratic values and institutions. It supports member nations at various stages of democratic development by promoting discussion and identifying best practices.
The Community touts its founding document, the Warsaw Declaration, as “one of the most complete and coherent documents on democracy,” and declares its intention to support democratic transition and consolidation worldwide.
Hungary once fit the docket, but since 2010, its government has pursued an agenda that is being termed, with growing frequency, the “Putinization of Hungary.”
In short, Prime Minister Viktor Orban has stolen Putin’s playbook. He has rewritten the constitution to dispose of checks and balances, stack the judiciary, and erode media and religious freedom.
In short, Prime Minister Viktor Orban has stolen Putin’s playbook. He has rewritten the constitution to dispose of checks and balances, stack the judiciary, and erode media and religious freedom. The April 2014 elections, in which Orban was reinstated for a third term, were free but not fair.
His party, Fidesz, rewrote the election rules to its own advantage, making it difficult for opposition parties to gain a foothold. In May, Fidesz also won decisively in the European Parliament. Just last weekend, Orban further consolidated power through local elections, wining control of all county assemblies.
“Hungary is a powerful country because at each vote, it managed to present a unity that is rare in Europe,” he declared. This “unity” gives Orban a mandate to continue advancing his authoritarian agenda.
Sonni Efron, a senior fellow at Human Rights First, points out that Hungarian opposition leaders have been decrying a worsening climate for political freedom for years. Orban has grown increasingly cozy with the neo-Nazi, anti-Semitic party Jobbik, enacting almost all of Jobbik’s campaign promises.
His administration has also promoted revisionist interpretations of the Holocaust, downplaying the history of Hungarian fascism and Nazi collaboration. But Orban spelled out his intentions most clearly in a startling speechlast July. Declaring his belief in the superiority of the “illiberal state,”
Orban held up repressive regimes in Russia and China as successful models of political organization. The systems “capable of making us competitive,” he told his countrymen, “are not Western, not liberal, not liberal democracies, maybe not even democracies.”
In accordance with this thinking, Orban has demonized liberal NGOs operating in Hungary as “foreign agents.” Over the summer, elite, armed forces conducted raids under the pretense of investigating an accounting problem. Respected NGOs like Transparency International and the Hungarian Civil Liberties Union are now on Orban’s enemies list.
As part of his “opening to the East” policy, Orban has also forged new economic alliances with Putin, indebting the country to Russia for the next thirty years. Last month, at Gazprom’s request, he cut off gas to Ukraine.
It is hypocritical, to say the least, that Hungary continues to hold a leadership position in a democratic organization. Indeed, Hungary’s presence in the Community of Democracies is an insult to countries that have overcome legacies of communism, colonialism, civil war, and dictatorship to become members. Mali is a case in point:
The country was suspended from the Community after the 2012 military coup; it was reinstated this year in recognition of strides made to reestablish democratic norms.
Mali’s inclusion in the Community is important — symbolically and functionally — as it strives to maintain stable democratic institutions and practices. But the Community itself is devalued when it includes the likes of Viktor Orban’s illiberal state.
Hungary has sustained a series of ineffectual scoldings — from the Venice Commission, the Council of Europe, the European Court of Human Rights, the Organization for Security and Cooperation in Europe, and even its own Supreme Court. But Orban marches on, unperturbed.
With the United States and the European Union focused on Ukraine, it’s begun to seem possible that he’ll slip beneath the radar, steadily tightening his authoritarian grip just as Ukraine moves to liberalize.
But last month, President Obama cited Hungary in an address about the growing global crackdown on civil society. Speaking on The Daily Show, Bill Clinton, too, called out Orban as one of those guys who “just want to stay forever and make money.”
Perhaps most significantly, the United States moved for the Community of Democracies to issue a formal report on the status of democracy in Hungary. It also asked Hungary to consider whether it wants to abide by the values and institutions of the Community. In so many words, that amounts to asking Hungary if it even wants to be a democracy anymore.
Unless Orban’s administration vows to reform, it’s likely that the Community will vote to replace Hungary on the governing council with a country more deserving of the position. Efron thinks that Hungary may resign from the organization before the vote to spare Orban further diplomatic embarrassment.
The Community of Democracies may only be a footnote on the world stage, but Hungary’s removal from the council — and potential exit from the coalition — would carry heavy symbolic significance: Orban can’t continue to enjoy the perks of membership in democratic organizations while violating all the democratic norms Hungary is sworn to protect.
The move would also pressure the European Union to take a harder line. How will President-elect of the European Commission Jean-Claude Juncker, who takes office in November, handle an EU member that is openly recognized as undemocratic? Norway’s Minister of European Affairs, Vidar Helgesen, is already demanding that the European Union take action.
In these instances, Orban has a habit of sending envoys to explain that his actions have been misunderstood, but it’s increasingly hard to see how he’s going to maintain that charade. Norway, which pours massive funds into Hungarian NGOs and civil society initiatives, has made it clear that the funding will stop. Hungary’s ambassador to Norway also quit his post this week.
It is widely believed that his decision was motivated by the difficulty of defending Hungary’s behavior to Norwegian authorities. (In the photo above, Hungarian protesters raise their hands to tell their prime minister to “stop” after he accused Norwegian organizations of political meddling.)
In an additional international embarrassment, the European Parliament voted on Oct. 6 to reject Orban’s nominee for Commissioner of Education, Culture, Youth, and Citizenship, Tibor Navracsics.
Navracsics was Hungary’s Minister of Justice while Orban hollowed out the country’s judiciary and ousted the Supreme Court Justice. The commissioner post would have put him in charge of Europe’s civil society portfolio, a troubling responsibility given his background.
U.S. policy toward Hungary has changed too. In recent remarks, Assistant Secretary for European and Eurasian Affairs Victoria Nuland demanded,
“How can you sleep under your NATO Article 5 blanket at night while pushing ‘illiberal democracy’ by day; whipping up nationalism; restricting free press; or demonizing civil society?”
Though addressed to Europe’s backsliding leaders generally, her question was plainly aimed at Viktor Orban. And as of Oct. 17, 10 Hungarian officials and businessmen with close ties to Orban have been banned from entering the United States, a further sign that the U.S. is escalating pressure on Orban to change his authoritarian tactics.
But as Efron argues, the EU and NATO will both have to “step up their game” if they want to keep Hungary from abandoning liberal democracy altogether. Under Orban’s guiding hand, the country is swiftly joining the ranks of the international “democracy recession.” With growing pressure from democratic nations, Orban will have to take a stand on what kind of state Hungary is going to be.
For many, he’s already taken that stand — in the form of his July 26 speech lauding illiberal regimes. But formal exile from democratic societies — the Community of Democracies, the European Union, and others — is a new step in a direction from which it becomes increasingly difficult to return.