Eastern approaches

Ex-communist Europe

Hungary's politics

Orbán and the wind from the east

Nov 14th 2011, 17:29 by E.L.

FEW countries in the region arouse more concern than Hungary and few politicians arouse more controversy than its prime minister, Viktor Orbán. Critics see him as the harbinger of authoritarian rule, presiding over the imminent collapse of the economy. (See here for a round-up of recent Economist pieces).

It is worth aiming off a little given that the critics are mostly (though not all) Mr Orbán's political rivals. Hungary's  economic difficulties are serious (the combination of large foreign-currency debts and a weakening forint is especially alarming). It is more vulnerable to the chaos in the euro zone than any of the nearby countries. But to be fair, Hungary is no longer in the intensive-care ward as it was when the IMF bailed it out in 2008. Mr Orbán inherited a mess and has (thanks to some bruising, and in some cases questionable, measures) brought public finances under control.

Similarly it is easy to exaggerate criticism of Mr Orbán's political approach. His headstrong way with public institutions can seem like a power grab, until you remember that Hungary's political system is based on the idea of "winner takes all". The Fidesz party that he leads gained a hefty mandate in the 2010 elections and has since then, quite rightly in his supporters' eyes, carrying out his mandate of stabilisation and reform. If that means biffing a few foreign bankers, borrowing money from the state pension fund, and spanking the central bank, so what?

Mr Orbán's dire public image abroad is a source of mystification and outright resentment among his fans. They blame everything from anti-Hungarian bias to the supposedly unhealthy links between the liberal elite in Hungary (which detests him) and the foreign media. One reason for this is that he doesn't give many interviews to the foreign media; his small circle of close advisers is similarly taciturn.  

But on a visit to London last Friday he made a notable effort to put his side of the story, first with a speech at the London School of Economics, and then in an hour-long interview with The Economist. A piece for the print edition will give a more analytical take on Orbánism and Hungary, but for now here are the main messages he wanted to get across. NB to commenters: this is a blog post, not an article.

At the LSE lecture he outlined the three prongs of his political thinking: burden-sharing, empowerment, and restructuring of the state. All are interesting: burden-sharing means broadening the tax base and also making the bankers share the pain for their bad loans, rather than loading the burden onto borrowers and tax-payers. Restructuring the state is a nice idea but difficult: public-administration reform is much talked about in ex-communist countries but only Estonia (and to some extent Latvia and Lithuania) have made serious inroads into reforming communist-era bureaucratic habits. Empowerment is a nice idea too though it is hard to know who, these days, is against it.

Talking to the Economist, he began by discussing what gloomsters would see as the crisis of post-1989 capitalism. He agrees, broadly, with the diagnosis. The assumptions of 1989 were that western civilisation had triumphed, the Russians were (“thank God”) being kicked out of central Europe, that market economies worked better than planned ones, free trade benefitted everyone. These assumptions were correct, but incomplete. A "by-product" of the changes of 1989 was globalisation, which allowed the poor world a unique chance to compete. "Those under-developed countries that were under us 20years ago are now more competitive than we are. Also, these emerging countries are not democracies."

To stay competitive, he argues, democracies have to adapt. They have to be less debt-dependent: debts creates weaknesses and hampers decisionmaking. They have to pay more attention to manufacturing, and to providing decent jobs for manual workers. That means a big shift in thinking (he quotes the proverbial Hungarian advice to children: "study hard or you may have to work when you're older").

That led on to the question of whether something is fundamentally wrong with the way that western democracies make decisions. Mr Orbán has no truck with that., Russian, Chinese and Brazilian decisionmaking is slow too. It is just that they are doing better than the old West right now. Those searching for a whiff of Putinism in the Hungarian leader's thinking would find little to chew on there. 

But he is in robust form when the questioning turns to his purge of the old regime's appointees in public institutions. For a start, he avers, the incoming Socialist (ex-communist) government in 2002 was "more brutal" than Fidesz is now. The leftists' purge then was accompanied by 144 criminal investigations against office-holders from the previous government (headed by him). And his own clean-out is far from complete: "We should do more", he says firmly.

To justify this, his argument turns less on precedent than on pathology. For him "post-communist" is not just an adjective, it is a political structure, involving fragile political institutions, weak parties, and an economy in which the old elite, and its lucrative and powerful cartels and monopolies, is entrenched. He also points out that plenty of other countries have political appointees too: not least the United States. And he insists that the Fidesz nominees to important public positions are a) not necessarily party placemen and b) thoroughly competent.

Asked to name some of his government appointments who are not loyal political hacks, he ponders the question briefly and then starts firing out names. Zsigmond Járai, was never a member of Fidesz and is now chair of the budgetary council. At the National Audit Office the vicechairman Tihamér Warvasovszky, a socialist, is  the deputy director (the director is from Fidesz). At the constitutional court, Professor Mihaly Bihari. Plus the chair of the supervisory council of the state asset management company is Árpád Kovács, another socialist. 

Turning to the economy, the prime minister readily agrees with the suggestion that success in macro-economic stabilisation has not been matched by progress on the micro-economic agenda: debureaucratisation, labour-market reform and particularly the black economy. He puts some of the blame on the European Union, both for low growth and for failing to disburse structural funds more quickly.

That is not terribly convincing. Other countries are growing a lot faster than Hungary and have done so by paying careful attention to the nitty-gritty problems facing small and medium-sized enterprises. He concedes that mentality is the biggest barrier to growth: "The main problem is lack of trust after 20 years of “post-communism”. We have to convince managers and entrepreneurs that the state is not their enemy, that the changes we are making are not temporary. It takes time."

Perhaps. But as Hungary wrestles with ingrained national cynicism, the outside world is moving on. It is striking that Commerzbank has decided to preserve its lending in Poland, but in no other European market outside Germany. Had this crisis happened ten or 15 years ago, Poland would have been seen as the first casualty, and Hungary as the foreigners' darling. 

The task for labour market reform is daunting. Hungary, with only 56% of the working-age population in the labour force, is the worst in the EU after Malta, he says. The EU average is 65%. "We want it to be 75%, like America". So far, his government has abolished early retirement and cut social benefits for those fit to work. Of 10m people in Hungary, he notes, only 4m have jobs, and (until his reforms) 1m of those didn’t pay tax. Hungary's new flat tax, he says, is unique in that it is both flat and family-friendly. Money needed to bring up children is tax-exempt. 

Yet this raises a paradox. If Mr Orbán is so passionately in favour of linking taxation and representation by widening the tax base, why has his new citizenship law given the vote to many (potentially millions) of ethnic Hungarians in neighbouring countries who don't pay tax to the exchequer in Budapest (and who, his critics would say, are likely to vote for Fidesz in large numbers). After some humming and haaing he concedes that tax is not the only basis for representation: ethnicity and national affiliation matter too. Moreover, he points out, the foreign Hungarians have only one vote, for party lists, whereas Hungarians within Hungary's borders have also a vote for a constituency MP. 

That brings the discussion neatly on to perhaps the thorniest question for the outside world: Hungary's relations with its neighbours. Asked why relations with Romania so good and with Slovakia so bad, Mr Orbán replies: "Because Slovaks see us as a threat and Romanians don't." Hungarians make up 10% of the Slovak population and live in an area along the two countries' common border. In Romania they are only 5% and live in less sensitive places. That prompts the reasonable-seeming question of what he as Hungary's leader could do to reassure the Slovaks. He replies with whiplash speed “That's not my job.” Hungary, he explains, has got used to living in modern Europe, despite having lost two-thirds of its territory. Slovaks have to "live with their situation too".

At this point, Mr Orbán lost me. Co-existence in a place with Central Europe's historical complications necessarily involves a degree of flexibility and compromise, and a willingness to try to see the other side's point of view. This is not an approach that seems to commend itself to the Hungarian prime minister. A revealing coda to this came with a question about Slovakia's cross-ethnic party, Most-Híd (from the Slovak and Hungarian words for "bridge"). This is trying hard to bridge the gap between the two language communities and has displaced the old Hungarian mono-ethnic party the SMK. Mr Orbán tacitly deplores this. Ethnic parties, he say, have a role to play, channelling inspiration, and self-esteem. "Don’t pretend ethnic differences are not important," he cautions. He moves on to deplore Slovakia's language law (the subject of much international criticism, and subsequently softened) and the lack of self-government structures for ethnic minorities there (which contrasts, he maintains, with the elaborate provisions for ethnic minorities in Hungary).

It is time to move on to wider foreign policy. The wind, Mr Orbán has said in speeches in recent months, is "blowing from the east". What does that mean? He is clearly enthused by the prospect of closer ties with China, and bats back suggestions that pro-Tibet demonstrators were mistreated when Wen Jiaobao visited Budapest in July. “We didn't lock up anybody,” he protests (true, but the demonstrations were banned and local Tibetans summoned to attend the government immigration offices on that day). He insists: "the government has the right to stop demonstrations that disrupt diplomatic relations. The Hungarian state has the right to pursue foreign policy in the national interest." Perhaps, but other countries do allow protests within sight of visiting foreign delegations, including those such as the Chinese whose feelings are famously prone to injury. His didn't. 

But the most notable Fidesz foreign policy flipflop has been on Russia. In opposition, the part was a stern critic of the ex-KGB regime in Moscow, berating it for neo-imperialism and shenanigans on energy security, and complaining about Western weak-kneedness towards the threat from the east. Now the tone is rather different. He makes some general points about Russia's 300-year history of different politics, says that the leadership there has shown signs of change, and then says: "I think there is a strategic alliance in the air between Russia and the EU." He is quick to point out that such rapprochements have, in the past, been bad for central Europe, and that he is insisting on guarantees on security, energy and trade (the latter must be north-south, not just east-west).

Such guarantees would be nice, but only energy security is clearly improving (especially for Hungary, which is en route to end its dependence on oil and gas from the east within two years, he says). For the wider security picture, the hopes of the smaller central European countries, and the Baltics, rest on Poland, which seems remarkably unenthusiastic about any kind of neo-Jagellonian foreign policy. Does he really believe that Poland cares about Hungary's security? He pauses. "I hope so." (I might add that for their part Polish officials seem rather unenthusiastic about Mr Orbán as an interlocutor, and pretty dismissive of the whole idea of any special security agenda for Poland's Visegrad and Baltic neighbours.) Mr Orbán continues: "Whether we like it or not they are big country and we are smaller." He adds firmly that  "I think we have an agreement  with Mr (Donald) Tusk (Poland's prime minister) on strategic points.

My impression is mixed. I am willing to accept some cut corners on politics and economics. When countries in "old Europe" so flagrantly break the rules, and when bankers behave so irresponsibly, one cannot be too cross about a politician with a strong mandate who rewrites the rules a bit, especially in conditions of economic near-emergency. I am rather more worried about his tin ear for Slovak concerns, and what seems to me to be an over-fondness for raison d'État in dealing with Russia and China. What do readers think?

 

Readers' comments

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TheEuropean

Daniel Prinz = The Prospective Economist

Don't post links in Hungarian, kid. This is against the comments rules and excludes non Hungarian speakers. Which is the majority of the readers of The Economist. This is not only unheard of but also rude. You've got to learn a lot kiddie.

What is the point of using 2 identical accounts and sending messages to yourself? Are you still in nursery school?

For those who do not understand Hungarian, here are the results of the latest opinion polls (Nov 2011).

Fidesz maintained its strong lead by 44%, second strongest result belongs to the right wing Jobbik: 22%.
Mszp, the disgraced former communist have fallen to third place with 20%. LMP, the left wing eco - party is on 11%. 3% went to the new DK "corruption" lead by the disgraced former prime minister, currently under criminal investigation.

TheEuropean

To the Editor and in reply to The Prospective Economist = Daniel Print

Shouldn't there be a rule to limit nonsensical, non English, propaganda aired on the comments pages?

For God's sake, this guy has multiply accounts, keeps posting non article related comments by the minute, referring links in Hungarian.

Or maybe this is in desperation over the demise of Mszp (socialist ) party? The grim standings in the opinion polls? Recent results
have shown that the Mszp have been overtaken in popularity by the ultra right wing Jobbik party.

That speaks volumes about the socialists inability to clean up their tarnished image.

Just for the record, support for the Fidesz, the ruling Centre – Right party is as strong as ever: 53%.

Daniel Prinz in reply to TheEuropean

Not that I care too much about how popular parties are (being very popular a year ago didn't make Fidesz's moves good and not being very popular now is not what makes them bad), but my reading of the data is that Fidesz's support is between 20 and 30%. Of course this is still more than twice the support of MSZP. Although you should note that MSZP, Jobbik, LMP and DK together now have more support than Fidesz.

(On posting things in Hungarian: I am assuming that the majority of readers here are Hungarian or can read Hungarian, if you can't please let me know, and I will happy to provide English sources instead.)

Daniel Prinz

What do you guys make of Akos P Bod's opinion this morning that Hungary's economic troubles are caused by the unpredictability of economic policy making and that Hungary might well be heading into a recession: http://inforadio.hu/hir/belfold/hir-467937
Is he a socialist agent or a reasonable conservative intellectual? (Hints: he was an MP for conservative MDF and served as Secretary of Commerce under the conservative Antall cabinet, as governor of the national bank under the same cabinet, as well as advisor to the office of Prime Minister Orban during his first premiership and was recommended as a candidate for PM by Orban during the 2006 elections. He received a high award from President Schmitt this year.)

qconover

@ Forlana
"no sign that he intends to break the foundation of democracy: voters' ability to discontinue the rule of bad/unwanted government" This is not true. One of the main objections of Hillary Clinton at her negotiations ion Budapest (reiterated by Ambassador Kounalakis in an article in a Hungarian daily plus in the démarche she presented to Orbán) was against Fidesz's plans of a new electoral law that would eliminate smaller parties, prevent new parties from entering the scene and tilt the electoral balance towards the single largest party. (Which is Fidesz for the time being.)Not mentioning extending the franchise to non-resident ethnic Hungarians, who are supposed to vote for the party with the more nationalistic line.

The Prospective Economist

Let me reiterate: I don't know the counterfactual; I don't claim that any Socialist appointees on any of these posts would have been better. Maybe we should be glad to have all these great people (esp. Sólyom or Baán) served us as long as they could. But don't say the winner-takes-it-all culture meant that the Socialists took over everything they could, and even more.

And today we could even be grateful for the single exception of the head of the National Theatre being "protected" from the vicious gay-bashing from, well, the right. So far.

By the way, we as a nation wasted so many of our brain cells and minutes on Earth to weigh in on the philosophical debates of where the motivation of our politicians came from, and therefore "who started it." Many observers would readily (or not) admit some grave mistakes of their "own chosen sides" but immediately rationalize it by claiming that it was only made necessary by the other side forcing it out with some grave error of historic proportions. E.g. the bias of the press can be blatant and disgusting on the right, shamefully financed by the taxpayer, but of course the right had no chance against the machine that the Socialists (or liberals?) inherited from Socialism, which readers kept on reading because of some inertia.

It is hard to find true "unforced errors". The politicians will always have their excuses.

And understanding their psychology is not necessarily helpful. Who cares about whether Gordon Brown was playing politics (electioneering) when he made the Bank of England independent? We can judge the move as it is. We can judge institutions and protocols as they are.

So whatever Orbán's (and Kövér's, who could really go apoplectic and have his conspiracy theories of betrayal about their erstwhile liberal mentors making a deal with the popular Socialists against the first Conservative government dangerously leaning towards chauvinism) defining trauma was, I don't care anymore about what his "real" personality ever was, or esp. what it "could have been." I don't think it will ever affect the future again. He might change once more, but not necessarily because during his time in Oxford (for mere 5 months, on the now-hated George Soros's money) he held different opinions.

Making this rambling relevant to the previous comments: You could always claim that the Socialists' gestures were never honest, they were cynical or at least driven by their bad conscience or guilt. In some sense I agree. We could not afford the benefit of the doubt against them. But still, they restrained themselves over the last 20 years, said the right (and modern, and professional) things to say, made gestures, while Orbán blew his chances for the benefit of the doubt and spent his little political capital available to make some amends for his "historical handicap" (against the "liberal machine", presumably).

Meanwhile, the generation that "rebelled against the tradition of urban-liberal-Western-modern rebelliousness" and followed the fad of new Conservativism similarly lost their political or democratic virginity, and thus their moral high ground. It must be a new trauma, a shock for them, as I can imagine their previous comfort and pride in being principled lions against the Socialists and the liberals making compromises (which is always dubious, everywhere), or against "decadent" intellectuals. As I said, this might be a defining trauma for this new generation. At the same time, the sizable liberal youth might find its confidence again that it is not just serving some undeserving political masters or carrying the burden of past compromises (or even crimes of the fifties). Many of the young can find that wanting to be Western, loving liberties, being tolerant is well, simply right, and the new Conservatives need not be given ground on the basis of their being wrongfully handicapped, misunderstood, tainted by libel of being anti-West, anti-modern, hypocritical, mean etc.

The Conservatives just proved themselves to be anti-West, anti-modern, hypocritical, mean etc. They will need to live with the consequences.

But all this psychology (of politicians and voters) need not change much about our judgment of the policies and the politics, as I said at the beginning.

The Prospective Economist

Back to politics for a second, some comments on the "winner-takes-it-all" politics: It is a bit easy to take this as granted, and cynically explain everything with it.

Again, not to whitewash any tragically irresponsible, incompetent and immoral previous government, but to elaborate on the institutional environment that Orbán was living in and could have continued:

— There had been more distance between the public broadcaster and the government. Maybe Zoltán Rudi was not your starry-eyed altruistic BBC chief either, alas, but surely not the same thing as "Philip" Rákay who made a career from a music TV VJ into a "Conservativism is oh-so-chic" young media personality via MCing Fidesz demonstrations (starting when Fidesz was in power, not when they were defending liberties or anything).
— Kondor Katalin was an overtly, vehemently biased editor of the main, well-respected, and authoritative news-and-politics arm of the public radio that has a large and loyal audience, the rough equivalent of BBC 1. She was a regular on panels of extreme right-wing publicists speculating about conspiracy theories and airing their anti-Semitism. As far as I know, the Socialist government, though they won more votes than Orbán in 2010, let Kondor finish her controversial term in office.
— Mária Schmidt is a controversial historian, with contemporary political messages mixed into her Terror Háza Múzeum: e.g. some captions of leading torturers, secret policemen an political leaders of the 1950s did not forget to mention their offspring being MPs of the liberal party — while they did not discuss much whether the children enjoyed any privilege or even paid their dues when they were organizing a secret opposition in the 1970s and 1980s while older Fidesz member were in the Communist party and younger Fidesz members, including Orbán and Kövér, was not much wiser, only younger, than Gyurcsány, when all had a (short) career in the youth wing of the Communist party. Whatever you think of the balance and the wisdom of the message of Terror Háza, I don't think Socialist governments did much harm to it.
— still on the cultural front, László Baán, in government under Orbán, remained the head of the largest (or at least most successful, most visible) museum, the Museum of Fine Arts - to much popular success one could easily add, thankfully. Still, when compares it to Baán's present-day power grab (he will remain the director when the National Gallery will be merged to the MFA), you see some differences…
— maybe you simply want to call it incompetence, but the Socialists continued to let the opposition nominate justices for the Constitutional court.
— as Daniel pointed out before, the Socialists could live with the fact that the liberals (!) let Fidesz elect a Conservative president in 2005, who used his power and voice later on against them, and also managed to nominate an independent chief prosecutor and chief justice. It is, ehm, controversial and hypocritical to now see it justified to not even let these people fill their terms in office.
— Fidesz had a strange and often-underreported affair ten years ago, when the chief prosecutor of the day suddenly resigned after a confidential conversation with the then-speaker of parliament, János Áder (now a Fidesz MEP). Nobody knows the reason, maybe there was a good reason. Still, the Socialists could live with the Conservative (and make no mistake, vocal, biased, or incompetent to various degrees) Péter Polt (prosecutor), Zsigmond Járai (CB chairman), Ferenc Mádl (president), Barnabás Lenkovics (a shockingly timid ombudsman, now rewarded with the constitutional court), Károly Szász (head of the financial regulator), in office, letting them fill their terms.
— call it different times or not (actually, for most people it is a perfect excuse for anything today, the original sin of the left following the personality-changing trauma of Orbán after the "liberal elite" [and the electorate, which is often forgotten!] ditched him after a brief love-affair around 1992): the Socialists did make gestures between 1994 and 1998, irrespective of their huge mandate. Funny that many people call the liberals the Socialists' concubines: If you don't acknowledge that the liberals kept the post-Communists in check, you must conclude that Socialists restrained themselves. Does that make Gyula Horn (with a hugely controversial role in fifties and 1956 in the political police and paramilitary, not to mention his political roles in 1980s) a truer democrat than Orbán? Unimaginable for most right-wingers, less obvious for a less partial observer.

Daniel Prinz

TheEuropean:

Here is an article that I published in 2007 at the height of Gyurcsany's powers:

http://www.nol.hu/archivum/archiv-449920

You can probably see that I was no less critical of his cabinet than of Mr Orban's. Have fun reading.

Bilboko in reply to Daniel Prinz

Dear Daniel Prinz,

from the link it seems that you write articles to Népszabadság.

This is the former communist newspaper, which was "the" newspaper
during the communist dictatorship. The title roughly means "People's freedom", which
did not change in 1990.

It is already very telling: as if a newspaper with the title "Übermensch" continued to operate under the same name after the 2nd World War.

The corruption of the socialists/post-communists was due to the fact that they understood: this was the last time they could steal. They lost contact completely with the country and with the idea that they were supposed to look for the interest of the country.

Real big corruption cases are those in which they ruined entire industries or several of the biggest Hungarian companies by giving them over to the Russians. Such things do not happen in other countries. No German government will sell Lufthansa/BMW to the Chinese for a low price.
(Such that you know that probably a prime minister got certain amount of money for it.)
Because of that you will not find such corruption in other Hungarian political parties than the MSZP/SZDSZ, or in fact, you will not find anything remotely similar in most other countries.

Thus, the post-communist corruption in Hungary was unique in the last 8 years.

Daniel Prinz in reply to Bilboko

I don't write articles for Nepszabadsag. I published one article in Nepszabadsag. In this article, if you bothered to look at it (I am assuming you are Hungarian, but here is an English translation), I write:
-I am bothered by the fact that in 2007 a daily paper calling itself independent publishes an article which claims that the government [the Gyurcsany government] has greatly improved healthcare and education.
-The Medgyessy cabinet's moves that doubled the wages of public employees were no better than the Orban cabinet's moves that doubled the minimum wage. [these are some of the things that lead to the economic problems of Hungary, especially some of the labor market problems]
-The socialist parties policies under Gyurcsany are not correcting mistakes made by Orban but mistakes made by SZDSZ and MSZP.
-MSZP is mistakenly claiming to be left-wing when they are in fact neoliberal.
-I find it problematic that Hungary is today [i.e. back in 2007] is led by politicians like Gyurcsany whose wealth and power is based on their positions during communism.
(Aside: The fact that Nepszabadsag publishes articles this critical of MSZP should make you think about this aspect of the "culture wars" and the division of the Hungarian media. While the left has some very loyal papers, radios and TV channels in which nobody would ever criticize them (Nepszava, 168 Ora, ATV, Klub Radio etc.), there also mainstream liberal and leftist papers (or at least you would presumably categorize them as such) that offer ample criticism of the socialists, some examples being Nepszabadsag, Magyar Narancs, Elet es Irodalom, Hirszerzo and to some extent Index.hu. Yes, these paper's do lean towards the left-liberal parties, but they also publish articles that criticize them, such articles (i.e. articles criticizing their own side) are incredibly rare on the right, although they do happen there too sometimes.)

Indeed, no German government would sell Lufthansa or BMW to the Chinese for a low price. And you know why? Because the German government does not own this corporations. Just like the Hungarian government does not own MOL. It didn't own it before the socialists came into power and it still doesn't own it. Do your research. By the way, what other companies were sold to the Russians?

Yes, there was corruption, a lot of it, but none of the instances of corruption listed above have to do with selling public corporations to anyone.

Daniel Prinz in reply to Bilboko

If you are worried about my being a socialist agent because I once published an article in a newspaper that you think is directed by the socialists, even though my article actually criticizes the socialists, let me offer you another piece that I wrote for a conservative website (Konzervatorium) in 2008 (this is a copy on my own site):
https://sites.google.com/site/danielprinz/links/hiteltelenl
In this article I take the three socialists PMs (this was before Bajnai), Horn, Medgyessy and Gyurcsany and argue that they have no credibility because of their connections to the communists.

Bilboko in reply to Daniel Prinz

"I don't write articles for Nepszabadsag. I published one article in Nepszabadsag."
Look, the Gyurcsany government did make incredible "mistakes", they committed incredible crimes. Why to explain it in the party propaganda newspaper? Is not it like the reform communists who had critical comments about the "real" communism, however, after all they were still of the same sort.

"Indeed, no German government would sell Lufthansa or BMW to the Chinese for a low price. And you know why? Because the German government does not own this corporations. Just like the Hungarian government does not own MOL."

I meant that, even if the state _officially_ does not own it, somehow these corporations remain German. In fact, BMW is Bavarian, not even German. (The Bavarian local government would not even allow it to leave from Bavaria.) In contrast, 20% of MOL went from the Austrians to the Russians. You are right, the state did not own it. However, in such a big business the state has a determining role. If the Hungarian state does no tallow it, it does not happen. Instead of stopping the business, the Hungarian government _facilitated_ it through fake buyers, who sold further what they got to Russia. That is the problem.

Or the MALEV, Hungarian airlines: they sold it to the Russians. They ruined it. They started to replace Hungarian pilots with Russians from Moldavia. Then Hungary (Orban's government) bought it back such that Russia made a big income. Imagine, why they do not do the same with Lufthansa. (Independently from who owns it.)

Or, when they somehow "sold" several large buildings to Russia, which were the property of Hungary for a very low price. I was really feeling like in 1945, when the Russian took everything that was movable. But now were are in 2010.

Or, when the Russian secret services arrived at Budapest, and interrogated the members of the Hungarian secret services with a lie detector. Sounds like a sci-fi, happening in an alternative reality, but it was like this.

http://hetivalasz.hu/itthon/fordulat-a-kemugyben-41766

Bilboko in reply to Bilboko

Just some clarifications: all these happened during the soc-lib government.

"Then Hungary (Orban's government) bought it back such that Russia made a big income. "
Orban had to buy it back for the price they could buy it back...
The big income and the damage to the country was there because the soc-lib government sold it for nothing to a buyer who could not run it.

Bilboko, thanks for the comment, this is relevant. My two cents: selling well-run companies cheaply is waste. However, it is not obvious how much we wasted with privatization.

There is sometimes no value to be destroyed. Only the promise of a company, of a business. But if the state cannot run it well, there is no value (no future profits, nothing). I am less sure about MOL, but for Malév, you really need to say it was a shame if the Russians ruined it because otherwise Lufthansa could have bought it and, boy, then it would have had so much value. Because in state hands, it never had.

This is what people getting emotional (and chauvinistic) about national champions usually get wrong. But The Economist usually tries to show: The company is valuable if it produces value for its customers and perhaps some profits for its owners. If our state railways would make profits for new foreign owners, they were most likely only recovering their investments they sink in in the first place, while customers get a better service, and we as the Hungarian populace, a nation, would be hugely better off.

Britons have been less squeamish about selling national treasures to benefit from investments into them and seeing them better run.

If you say that customers do not get better off after a privatization but the owner just siphons off profits you must say that there was some capital there in the first place worth siphoning off. This is what makes these stories hardly believable about these Hungarian companies. (Also previous arguments about industry.)

They never had much capital either.

OK, some of them earned monopoly rents, like Budapest Airport, or perhaps MOL had some oil fields, or some market power because of imperfections in the market, which is also true for MOL. But it is still hard to make a story where a foreigner would forego profitable investments and some profitable operation (where customers pay for the value they get — but they get value!) just to siphon off the capital and rents instead. Not impossible, but hard to imagine. And we definitely could have used more calculations, more deliberation, more proof before we blow the annual education and welfare budget on this, many times over…

(By the way, utilities and banks might need regulation to rule out the abuse of market power. And sadly, it was rarely there before or after selling them, and you saw some adverse outcomes. However, selling the firms to Hungarians (who never had the capital in the first place), or just running them publicly, would not have solved the problem of regulation either. It is not clear you would have seen less of the abuse.)

Oh, and by the way, if you really think the Hungarian population is robbed by foreign capitalists, you should it in our financial accounts. Check the central bank's numbers on that. I don't think you see much profits or capital being siphoned off. (Though arguably, I would pay some of that price to have a decent railway, or some hospitals, e.g. …)

This is a sanity check similar to what people should have done when they talk about the income of the "oligarchs" and money stolen. They just don't have that much wealth.

Daniel Prinz in reply to Bilboko

I am not sure what makes you think that Nepszabadsag is a "propaganda newspaper". (I think you are confusing it with Nepszava?)

But here is something that will probably make you a little bit confused.
Gyorgy Matolcsy has published not one but five articles in Nepszabadsag:
http://nol.hu/archivum/archiv-484721
http://nol.hu/archivum/archiv-475117
http://nol.hu/archivum/archiv-472477
http://nol.hu/archivum/archiv-407986
http://nol.hu/archivum/archiv-138951
Mr Matolcsy also served in high positions in the Treasury during communism and was a member of, wait for it... MSZMP. (http://hu.wikipedia.org/wiki/Matolcsy_Gy%C3%B6rgy)

Viktor Orban published one article in Nepszabadsag:
http://nol.hu/archivum/archiv-349372

Janos Martonyi published five articles in Nepszabadsag:
http://nol.hu/velemeny/20110910-a_terrorizmus_tervesztese
http://nol.hu/lap/vilag/20100911-egyutt_erosebbek_vagyunk
http://nol.hu/archivum/archiv-381209
http://nol.hu/archivum/archiv-374641
http://nol.hu/archivum/archiv-101808
Mr Martonyi served as special counsel with responsibility for, wait for it... privatization in 1989 as a member of, wait for it... MSZMP. From as early as the 1960s he reported to the Hungarian secret services.
(http://en.wikipedia.org/wiki/J%C3%A1nos_Martonyi and http://hu.wikipedia.org/wiki/Martonyi_J%C3%A1nos_%28politikus%29)

So are Prime Minister Orban, Treasury Secretary Matolcsy and Foreign Secretary Martonyi communists just like Daniel Prinz is? I think not. People tend to publish articles in Nepszabadsag, because among the four Hungarian national political daily papers (Magyar Nemzet, Magyar Hirlap, Nepszava, Nepszabadsag) it leaves the most space for discussion and it also happens to have by far the biggest leadership.
Thanks for listening.

Daniel Prinz in reply to Daniel Prinz

And of course needless to say, all four of the national political daily papers used to be run by the communist government in some capacity before 1989:
-Nepszabadsag by the Hungarian Socialist People's Party
-Nepszava by the National Council of Unions
-Magyar Hirlap by the Council of Ministers (i.e. the cabinet)
-Magyar Nemzet by the Patriotic People's Front
So you arguments are somewhat shallow in this respect too.
What you are doing is that projecting your idea that Nepszabadsag is today leaning towards the left (which I think is true, by the way) on your idea that today's left is communist while today's right is not, and from this projection you conjure up an image that left-leaning papers are communist propaganda continuing in the fashion of communist times, while right-wing papers are independent, forget their very similar (basically exact same) past.

Daniel Prinz in reply to Bilboko

Wait. This seems contradictory. The soc-lib government sold a valuable company to someone who couldn't run it, and then Orban "had to" by it back for more than it was sold for? That seems to suggest that its value has increased? (Of course you need to discount the increase because it was partially caused by people knowing that Orban wanted it back.)

I am also not sure, and you don't explain, why Hungary needs to own Malev or why such a company is necessary..
It seems to me that the German state does not own Lufthansa, it's ownership structure is as follows: "Lufthansa is owned by private investors (88.52%), MGL Gesellschaft für Luftverkehrswerte (10.05%), Deutsche Postbank (1.03%) and Deutsche Bank (0.4%)" (Wikipedia: http://en.wikipedia.org/wiki/Lufthansa_Group#Corporate_affairs_and_identity)
You might be right in claiming that Lufthansa is in some special sense German, although I am not sure how, but that does not entail being owned by the German government. Lufthansa has also merged with Swiss, so then the Swiss don't have their own "national" company?
I also can't find the Slovak national airlines, is there one? Other regional countries (Poland, Romania, Czech Republic) do have their own state-owned airlines, but I don't think there is a clear-cut reason why this is the way to go, and certainly not that if we don't go this way our government is deeply corrupted.

With regard to MOL, I am not sure why the Russians are worse owners than the Austrians, and that the move of the Austrians to sell it to the Russians in itself constitutes corruption. Of course there might well have been corruption, no doubt about that. In any case, to the best of my knowledge, MOL was privatized under the first, conservative government of Hungary (when Matolcsy was, by the way, also serving in high government positions as was Martonyi). In any case, I think you are taking statements from the Orban cabinet at face value too much without giving us independent reasons as to why they are right move to make. (Notice that in my questioning any of your arguments I don't need to worry about whether the socialists did the right things. They probably didn't anyway.)

Daniel Prinz

Also it might be a little problematic that 31. seems to be repeating the previous ones, right?
Also the single biggest element on this list is "Nyékesi Béla MSZP", with HUF 300m, which is $1.5m.
Would you care to tell us who he is? I have never heard of him and can't find him anywhere on Google. What was his position under which socialist cabinet?

"Deme Gábor MSZP": you are saying that an MSZP politician committed manslaughter? That seems a little bit strong. While Deme Gabor is accused of instigating manslaughter (and not of committing it) in Csepel, from what I could find, he is not affiliated with MSZP, and in fact the victim of the murder was a local MSZP politician, and principal of a local school. Would you care to tell us Deme's affiliation with MSZP?

TheEuropean

To Daniel Printz = TheProspectiveEconomist

CONT – The space provided by the Economist is simply not enough to list the disgraced, former socialist MPs and local authority chiefs. There is a traffic jam in the Hungarian Courts to sentence the common criminal MSZP politicians. Thank God’ for Fidesz!

26. Nyékesi Béla MSZP 300 Million Fts of embezzlement – under police investigation

27. Kálmán András MSZP Embezzlement, under police investigation - Dunaújváros
28. Borovszki Tímea MSZP Under arrest for embezzlement of millions of Fts.

29. Gál György MSZP Under arrest for running a socialist party affiliated criminal gang. Acted as connection between the criminal underworld and the socialist party

30. Kardos Péter SZDSZ –Liberal party functionary – embezzlement of millions of Fts

31. Eight socialist (MSZP) local authority members were charged in a the Budapest district of Erzsébetvárosi for embezzlement, court case is in progress

32 Kolompár Orbán MSZP Charged for embezzlement of millions of Ft Court case in progress

33. Kodela László MSZP Tax evasion – Sentenced and was told to re-pay 8.1Millions of Fts

34. Weiszenberger L.MSZP – Charged and sentenced for using his authority to gain financial rewards. Embezzlement, bribery etc.

35. Balázs Gábor MSZP – PRISON sentence for using public funds for this business (salami factory)

38. Deme Gábor MSZP Under arrest for manslaughter - socialist party criminal gang member

39.Gyarmati Mihály MSZP – Under arrested for bearing false witness

40.Hámori Csaba MSZP PRISON sentence for using his authority as socialist MP and was attempted murder of opponents

41. Hering Gyula MSZP – PÉCS He stole money from his own bother. PRISON sentence – 1 year

42.Kemecsei Árpád MSZP Campaign chief for socialist Budapest mayoral candidate. Under police investigation for issuing false invoices

43. Kövecses Gábor MSZP Charged for forgery, embezzlement

44. Lados István MSZP He gave false evidence during in the socialist criminal gang trial associated with Zuschlag, Mszp (socialist) trial Was charged for misleading court.

Prometeus

Before 1989, Hungary was the only country in the communist bloc which possessed semi-private industrial companies, that produced items that could compete on the international market by the virtue of quality rather than price.
Those were companies like Ikarus (buses) and Tungsram (electrical appliances).

After 1989, all respective Hungarian governments have been too naively trustful about western companies, allowing them to buy those Hungarian ones in the hope of further investment.

Instead, these western companies didn't show the commitment that Hungarians expected, and closed down the companies when they were no longer feasible in their current state, or moved them to countries with lower wages like Romania, Ukraine or even China.

After joining the EU in 2004, especially France has been pushing the new member states to "rationalize" its agriculture. Hungary, being a producer of high quality wines, fruits and vegetables, was forced to cut down most of its production, as it was too small-scale to compete with the huge French and Italian producers.

Now Hungary has a huge unemployment rate and too narrow an economic basis to recover from this soon.

Poland, Slowakia and Romania went the way of attracting foreign investors for modern industrializing, starting from scratch. Slovenia and The Czech Republic, having an industrial history too, could carve out quality industrial niches, and the Baltic states could quickly switch to a modern service economy.

Hungary missed the boat on all of those options, starting out as being the most promising country only after Slovenia.

As a result of feeling cheated by the West, many Hungarians now turn east for hope and alliances, Jobbik being even more articulate on this.

However, most of this is only rhetoric, as it is generally understood by most Hungarians, even the nationalist ones who boast being "descendants of Atilla" or threaten to make common cause with figures like Ahmadineshad, that their true and only home is in Europe.

One thing that could get Hungary back on the Western track might be more EU-backed investment and less selective moralizing by the western press.

TheEuropean

To Daniel Printz = TheProspectiveEconomist

How wrong you are. It is not only gyurcsany, the corrupt and disgraced former Prime Minister of Hungary who is facing trial.
As I said, most of former socialist and liberal MPs, local authority chiefs from the socialist party are in prison, under arrest, ore under investigation.
Here is the list of mszp/szdsz = socialist/liberal culprits who robbed the country:

1.Bajor Zoltán SZDSZ - liberal MP - was caught for accepting bribes , currently under arrest
2. Tátrai Miklós MSZP - was working for "Nemzeti Vagyonkezelő" - an institution to protect Hungary's assets. He is under arrests for embezzlement of public funds.
3. Wieszt János MSZP - He was caught infamously for taking bribes from people of the public to gain commercial interests in the local authority MSZP (the socialists) were running
4. Kabai Károly MSZP - IN PRISON - Part of the socialist elite got 2.5 years for forgery, cheating taxes
5. Nagy Imre MSZP - Under house arrest for 100 Million Fts VAT return fraud
6. Zuschlag János MSZP - IN PRISON - One of the highest ranking socialist MPs, 6 YEARS in prison for embezzlement and running a gangster style criminal ring - with the full agreement of the socialist party
7. Fürst György MSZP - Member of the scandalous Terézváros criminal gang - they were in charge of the Budapest district's finances. Hundreds of millions of Fts were embezzled. Under investigation
8. Páva zoltán MSZP - Socialist MP for Komló - under investigation for the disappearance of hundreds of millions of public funds.
9. Orbán István MSZP - took bribes - under arrest
10. Benedek Fülöp MSZP - Former socialist State secretary Forgery -SENTENCED to 1.5 years in prison and part of ongoing investigation for embezzlement
11. Horváth Klára MSZP - under investigation for embezzlement of hundreds of millions of public funds
12. Herédi Dezső MSZP - Was running Tiszaderzs - under arrest for embezzlement
13. Gál István SZDSZ - Liberal local authority leader, embezzlement of public funds in Balmazújváros
14 Szabó Lóránd MSZP-SZDSZ Dombóvár - Local authority leader who overruled police findings unfavourable for mszp/szdsz supporters. Under arrest
15 Kálmán András MSZP - Embezzlement - under arrest
16. Karakasev Anna MSZP IN PRISON for 10 month. (Salgótarján)
17. Walter Dezső MSZP - SENTENCED for influencing police matters and helping criminals
18. Gyurcsány Ferenc - Disgraced former socialist MP of Hungary Under investigation for Sukoro, embezzlement and forgery has been proved with his company "Altus". He made a law passed to ignore financial criminal activities over 20 years. Nevertheless, the Supreme Court ruled that he embezzled 84 million Fts
19. Rácz Péter Magyar SENTENCED - 1,5 year in prison for embezzling the assets of the Pioneer Association
20. Csonka Gábor MSZP IN PRISON for embezzlement. He was the press office and election campaign chief for Lendvai (socilaist)
21. Szabó Gábor MSZP- SZDSZ - socialist - liberal PRISON sentence - 8 months for forgery
22. Kaszab Csaba MSZP IN PRISON - 2years for using his authority to overrule police matters for socialist party supporters
23. Szarvas Attila MSZP - PRISON SENTENCE forgery - he is on the run, escaped from police custody
24. Pénzes Sándor - Veres János MSZP SENTENCED TO PRISON for cheating taxes
25. Hunvald György MSZP -Highest ranking MSZP BP local authority chief - Under investigation for running a criminal gang in his department. He embezzled money to run his playboy lifestyle: two jaguars, one private jet and exclusive properties - COURT CASE IN PROGRESS
The space the Economist provided is too short for the continuation of the list so see next comment

Daniel Prinz in reply to TheEuropean

It's great that you were able to copy a sketchy propaganda document from the internet from this address: http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CD0Q...

I agree that these people have been disgraced and should be prosecuted. However, my points still hold:
(1) These people, besides Ferenc Gyurcsany and Janos Zuschlag are not part of the socialist elite (okay, Benede Fulop might be, he served as assisstant secretary in the ministry of agriculture), by any means. For the most part they are local politicians in Budapest districts. (By the way, Zuschlag's prosecution and what was said during his trial makes me think that more of the socialist elite is culpable. But one is left to wonder why they are not prosecuted... Some people guess that this because some of the Fidesz money elite is not all that far from the socialist money elite, particularly when it comes to campaign financing.)
(2) Their prosecution, if we are to hold the premise that the prosecution service is independent from the executive branch headed by PM Orban, is not an accomplishment or Orban's.
(3) Unfortunately your list has a number of factual inaccuracies:

1.Bajor Zoltán: you claim that he was an SZDSZ MP, whereas, he was on the local council of a Budapest district (an incredibly corrupt district and council, in fact, most of the cases that you list here come from that one district). He is also not under arrest.
2. Tátrai Miklós: you claim that he is MSZP, while he was director of the national asset management agency. I am willing to go with your characterization, however, that he was a political appointee. (Aside: this underscores that E.L. was right in stating that Hungay has "winner takes all" in politics, which was disputed by some people here. Indeed, in Hungary, after elections the winning party fires a lot of people from a lot of positions that are independently appointed in better countries. This goes for both Fidesz and MSZP.) The bigger worry I have here is that he is not under arrest anymore.
9. Orbán István: not under arrest anymore
24. Pénzes Sándor - Veres János MSZP: Veres was Treasury Secretary under the MSZP cabinets, but he has not been arrested at all.
And so on. Yes a lot of these people have been prosecuted and some have been found guilty, but few them are actually under arrest.
Also, while these people represent how corrupt the MSZP-SZDSZ cabinets were, which is the reason why I wanted to see change and was happy when Orban came into power, their work in no way explains the scale of the country's economic problems. Most of these people took bribes in real estate deals and the like of sums like ~2m ($10 thousand) or so. This is obviously not acceptable, but I have the feeling that many people think that this had a significant role in bankrupting the country and that prosecuting these people can replace competent economic management and policy-making on the part of the Orban cabinet. Let me give you an example of what I am thinking here. Gyorgy Eiselt, deputy assisstant secretary in the Department of the Interior under the new Orban cabinet is being accused of corruption, and the daughter of Sandor Pinter worked for the company in question (from which Mr Eiselt took the bribes in the form a brand new luxury car) on the case in question. Is this terrible? Yes. Do we want to see that justice be done to Mr Eiselt (and well, to Mr Pinter's daughter which will never happen of course). But this in no way replaces policy-making, and is in fact the business of prosecution service. See, Fidesz is not as uncorrupt as they make themselves sound, cases from recently contracting Mr Pinter's security company for the protection of public corporations to contracting conservative think-tanks previously run by Fidesz politicians to legislating to help CBA and Mr Jarai's companies to intimidating non-Fidesz mayors that their towns and villages won't be given government help to hiring relatives of high-ranking Fidesz politicians in government department in positions for which they are not qualified for (remember the head of department in the office of the president in her twenties?) should give you a pause.
Yes, I totally agree with you that the socialists are much more corrupt, which why I want to see Orban govern, but beware that Fidesz is not as clean as you describe them to be and much of what you are claiming is simply not happening.

Needless to say, while to did some work on giving us a list of prosecuted politicians, you were not able to give us any facts with regard to the judges and justices in question, so maybe you can do that in your next comment?

Daniel,
don't defend the corruption cases. They should be prosecuted, and we there is no need to compromise our valid policy arguments with whitewashing any of this.

But the intellectual take-away, again, is that stealing affects how the pie is cut (shared, distributed). This country should talk more about why the pie is small. We are not a rich, efficient, productive country whose only problem is that some mafia is redistributing our plentiful output to itself.

I told you, if anyone bought something whose public benefits are lower than its real production costs, that is shameful waste. But we should identify those cases, not "simple" graft and overbilling. And we should talk about where our hundreds of billions gone missing, not where our millions got misappropriated.

And on this note, see that the sports-car-rental of János Lázár (who says we "sadly cannot afford" to pay for the poor) for 600.000 a month, this high partly to be able to break the law (speed limit) with impunity, is not kosher either. And Lajos Kósa has a "20% Lajos" reputation (WikiLeaks?), which would affect not only billions in his city of Debrecen, but is immediately much more likely to distort efficient procurement and public investment.

Fun stories, like that of Lajos Gubcsi, are marginalia.

I am not defending corruption cases. I want to see more of them investigated. I am saying that we should remain factual about them, and not use sketchy far-right websites to conjure up lists with half of the things untrue on them.

One of the problems of the list is that it misses some of the real biggies: Miklos Hagyo, deputy mayor of Budapest and a whole lot of people working with him, Erno Mesterhazy, counsel to Mayor Gabor Demszky etc.
Oh, there is plenty of socialist/liberal corruption. But let us not use a propaganda list circulated all over the internet on Jobbik and similar websites to think about them. (Google any element of the list, you will see that it has been posted in the exact same form in Hungarian all over the Hungarian web, especially some far-right websites.)
The original list probably comes from the database of a great website, the Corruption monitor: http://www.k-monitor.hu/index.html
However, this website lists a nonnegligible numer of Fidesz cases, which are conveniently skipped over.

Just as importantly, here is a perfect example of the cases that cause at least as much as economic harm and inefficiency as more frequent but smaller graft for personal gains: http://atlatszo.hu/2011/09/12/looking-after-the-lottery-money/

Just because this money was meant to finance political campaigns and media (yes, including some of the "respectable" right-wing media establishment/conglomerate — and probably the left-wing counterparts too), and not cars or villas of politicians directly, we as a society still lost these tens of billions a year. This should have been much bigger news.

Not to mention how much of political reporting is discredited in Hungary if it is financed ("subsidized") by such methods.

And of course, it should be bigger news how hundreds of billions are lost in subway-construction, highway-building, state railways, state airlines, bureaucracy etc.. I don't care that this money was not stolen. It was wasted. Inefficient transactions, small value from high costs. That is tragic. And nobody stops that.

TheEuropean

To Daniel Printz = TheProspectiveEconomist

Why did you come back just one day after declaring that you are "leaving this site"? Is that how credible you are? True left/liberal traits, say one thing, do another?

an't you see how much you discredit yourself?
And nobody is interested your idiotic, repetitive, useless comments.

I repeat the FACTS:

Fidesz has unprecedented 2/3 majority and rules Hungary. The voters expectation was to clear up the previous, corrupt and ineffective system. That includes the removal of corrupt and mszp (socialist) affiliated judges.

Don't like it? Who cares? Fidesz is in the majority and is doing what the voters want, to the satisfaction of majority of Hungarians.

Of course, if you were bankrolled by the corrupt socialist system, and there is no more opportunity to steal from public funds, you must be furious. Which explains your anger.

And we just laugh at you.

TheEuropean

Daniel Prinz = TheProspectiveEconomist

What's the point of sending messages to yourself and answering?

No need to multiply idiots, one of you is far too much.

No matter how many comments any of your IDs is posting, they are useless, really.

f7UHMkFUdc

The interview and the comment of the Economist is surprisingly misguiding, and fraught with inaccuracies..Speaking of strong mandate, and clearing the ancien regim's monsters should have been double checked before so smoothly and uncritically accepted. The new constitution and the media law is not inspired by any sort of ideology or higher public policy aim, unless the one to lock in power Orban's people (have a look on the new list of twothird laws please next time! The truth is that each and every independent institutions were taken by storm (and in many times illegally) by fidesz. The idea of winner takes all has never been the leitmotiv of the Hungarian democracy, rather the exact opposite, but anyway how can you be so dismissive of criticism and talking about a mere exaggerated raison d'Etat, when -just to pick two examples: Orban packed the ConCourt (the supposed to be check on the parl.majority) with five new Fidesz judges by changing the ConCourt judges numbers; plus you let Orban make Bihari like a neutral, non-Fidesz ally ConCourt judge, the one who ruled in favour of the 2008 truly populist and unconstitutional referendum that inter alia brought back Orban, in order to have a new mandate on the ConCourt. Only a bit of strong statism and chauvinism? that would be it, the Economist's criticism?

TheEuropean in reply to f7UHMkFUdc

Reply to f7UHMkFUdc

Mr Orban has an unprecedented mandate and has every right to clear out the old, corrupt and undemocratic system. This is what he promised to the voters and this is what is expected of him.

That includes the removal of disgraced judges, corrupt directors, and sending half of socialist party elite to prison for stealing money from the pot. They thoroughly deserved it and Hungary ceased to be a gagster state.

This is called law and order. Nothing was illegal. It was the decision of the people of Hungary to end the previous utterly useless and corrupt socialist rule. Thus Mr Orban enjoys historic 2/3 majority and the people expected him the make historic decisions. He did just that. And we are happy.

Fidesz is ruling Hungary pretty well. The last 8 years showed that those who oppose Mr Orban, did nothing but destruction so don't expect them to be credible now.

Daniel Prinz in reply to TheEuropean

"That includes the removal of disgraced judges, corrupt directors, and sending half of socialist party elite to prison for stealing money from the pot. They thoroughly deserved it and Hungary ceased to be a gagster state."

I am not sure how credible this is.

With the "disgraced judges" you might be referring to the justices of the Contitutional Court or the chief justice of the Supreme Court.

Andras Baka, the chief justice of the Supreme Court was appointed with votes in the Parliament from Fidesz, amid much resentment from the socialists. He was nominated by Laszlo Solyom, the president who was also put in place with votes from Fidesz, amid much resentment from the socialists. I am not sure how he can be seen as a disgraced judge. Incidentally, he has also served as a conservative (MDF) MP in 1990-91, and has served on the European Court. I am not really sure how much he can be seen as a socialist agent. (for info on him see http://hu.wikipedia.org/wiki/Baka_Andr%C3%A1s)

None of the justices of the Constituional Court have been removed, so I am not sure how appropriate it is to talk about their removal. The problems with the ConCourt can be summarized in the following point. Please give a detailed refutation of each.
(1) The right of the ConCourt to rule on laws regarding government spending and taxation has been taken away. Whether the ConCourt should have a right to rule on such matters is up for debate (the Supreme Court of the United States cannot rule on statutory federal spending), but the problem with this move was that it came in response to the ConCourt striking down such a law (specifically the law regarding the 98% taxation of severity payments, and once again my view in no way means that I don't have a problem with the severity payment, but I still hold that if they had been illegal they should have been reclaimed through civil litigation rather than retroactive legislation), and the law was repassed. Also this came before the passage of the law on the taking of the pension funds (again, it is irrelevant whether it was good to take them or not), which most people anticipated the ConCourt would find unconstituional.
(2) The number of justices who sit on the Court was increased from 11 to 15. It is up for debate whether the ConCourt should have more (or fewer) members, but this is not an issue that was on the table before. Fidesz never proposed to increase the number of members, and also didn't campaign on this issue. Please provide us with a reference where Fidesz promised to increase the number of justices from 11 to 15. It is pretty clear that Fidesz once again changed the number of justice in order to make sure that the Court leans towards them even more. I say even more, because the vast majority of the justices who were on the Court at that point were there with votes in the Parliament from Fidesz, specifically the following justices before the increase in the number of justices: Peter Paczolay, Elemer Balogh, Mihaly Bihari, Barnabas Lenkovics, Peter Kovacs, Istvan Stumpf, Laszlo Kiss. You could hardly call these people disgraced, since let me reiterate this, they were put in place with votes from Fidesz in the Parliament.
(3) Two justices, Istvan Balsai and Istvan Stumpf did not meet the qualifications to serve on the ConCourt, therefore it was illegal to put them there. The Constitution requires that the members of the court be lawyers and have either outstanding theoretical knowledge of the law or have 20 years of legal practice. Mr Stumpf is not a lawyer (he holds a doctorate in political science), and Mr Balsai does not have the required practice or theoretical knowledge , since unlike all other justices he spent most of his career as an MP and not as a law professor. (Aside: Mr Bihari holds a doctorate in law but spent most of his career as a political scientist and sociologist, indeed he founded the PhD program in Political Science at the University of Budapest, but his election is slightly different because he had previously served on the Court.)

I am not sure who "corrupt directors" are, could you elaborate on this, like give us a list of "corrupt directors" who have been removed under Mr Orban?

While I would like to see corrupt socialists on trial, there are two problems here:
-only one member of the socialist elite has been put on trial, Ferenc Gyurcsany
-no member of the socialist elite has been imprisoned
-to the best of my knowledge, in Hungary whether someone is put on trial is decided by the independent courts on recommendations from the independent Prosecution Service, so this has little to do with Mr Orban. Or are you saying that Mr Orban can or should be able to decide who to put on trial? But then you can hardly sustain your claim that Orban is not crushing independent institutions, right?

By the way, this is a great scholarly reference: http://scholar.harvard.edu/jrobinson/files/jr_wb_goodcrises.pdf (top of page 12, or figure 1). The story is also prominent in their upcoming book with super-scholar Daron Acemoglu.

And more on the stellar president with a huge mandate still losing fights with the courts in countries where people respect the rules (which of course affected that people still keep on respecting the rules): http://www.nybooks.com/articles/archives/2011/dec/08/how-justices-get-wh...

But if you only read one, stick to the academic paper, as always.

NDB2

Just one more note:

I wonder when Western Europeans will stop referring to our region as "Ex-communist Europe", as for example here in the headlines. I think this expression might have been adequate in 1990 (even thought the "socialist" systems we had had not really much to do with communism I think), but it is 2011 already.

Refferring to a whole region as "Ex-communist Europe" in 2011 is about as adequate as reffering to the USA as a group of former British colonies.

I personally even find the term "Eastern Europe" offensive when someone is reffering to the Czech Republic or Hungary. It is incorrect both geographically and historically. Eastern Europe is Russia. We are Central Europe. Or East-Central Europe in the worst case.

NDB2, this is a more politicized issue than perhaps you meant: Orbán just put into the constitution by fiat that the post-Communist, post-transition era started only last year… :)

It's great that the his "national agreement" (unity, consensus) allows such off-hand trashing of much of the country and its voters. (But at least he's less keen on calling only his supporters Hungarians and patriots than ten years ago.)

But this is off-topic, I know, I know. Instead I am expected to simply insult the ever-so-useful TheEuropean. I won't.

I wonder if any reader seriously believed him that I got my facts wrong: http://www.economist.com/node/21538766. (Guess who's citing SOURCES again…)

I am sorry about my English, I am really glad the academic economic community embraces me and understands the way I am. I am glad Larry Summers had no problems understanding me. I can only dream about living up to the linguistic and economic standards of this mythical, wise creature modestly hiding behind the nick TheEuropean.

Why do you need to insult me, really? You are used to winning arguments that way?

TheEuropean

Daniel Prinz = TheProspectivEconomist

I don't understand your comment. Full of English mistakes and serious factual mistakes.

Useless, really.

You know what? TheEuropean was right in two things: I was acting like an immature teenager when I descended into a flame war with a troll like him. That was a disservice to our fellow readers and Mr Lucas, and a disgrace to the professional circles I am coming from. He was also right that fellow readers know better anyway.

I should waste no more time on him, so I will do what I most readers are already doing: ignore him. I go back and have a life (though I have a wife, I need no girlfriends, thank you), and will focus on economics. I got overly excited about the troubles of my homeland. This was a mistake.

But to be civil, I thank you, TheEuropean, for engaging in some sort of a discussion, and at least bothering to read what I wrote and trying to understand. As an academic, I can easily imagine that people disagree, and someone do not see something proven and remain in disbelief. Your standards of proof and arguments were peculiar, but as always, readers will need to decide for themselves. Yes, they might dismiss me too for being a smug jerk. So there is no need for you to reminding them about that option.

Take note: I am chiming out, and won't reply to your comments, however relevant, factual and on-topic you think you'll make them. This does not mean I acknowledge I was wrong on anything on-topic.

I hope Mr Lucas was still grateful for some of the topics, news pieces, views and sources that came up. He can make up his own mind about all of this. And other readers too.

TheEuropean

Daniel Prinz = TheProspectivEconomist

How childish you are. Do stop pretending you are not the same people. Surprise, surprise, the only commenters after midnight, just minutes apart. Same bad English, same grammatical errors, and same senseless remarks.

The familiar, groundless fantasies are dead giveaway that we are facing a politically illiterate “young” pretender. Your mental age can’t be over the troubled phase of an obsessive teenager, that is.

Let’s look at the facts: Fidesz – KDNP enjoys an unprecedented, 2/3 majority in the parliament. They can do whatever they want. Don’t need approval from anybody, and only accountable to the voters, not to you. And they do maintain transparency, integrity and moral upper hand. Whether you like it or not, Fidesz is maintaining the strong support and showing remarkably strong economic results.

GDP growth is higher than in most of the EU, certainly higher than in the UK. Hungary is the only country apart from Sweden that managed to reduce state debt. Moreover, Hungary is one of the mere 6 nations succeeded to keep deficit under 3% percent.

Truly remarkable, indeed.

So stop pretending it matters what you say.

And congratulations, even the Editor got fed up with your immature comments and started to remove them.

If this week's Economist is any good, Hungary grew exactly as fast in the last quarter as austerity Britain.

Or by the "latest" numbers, you can compare us to more countries: not only grew we slower than the mature but advanced economies of Sweden, Denmark, Belgium, Germany or France, we were much slower than our counterparts playing catch-up, including the Czech or the flying Poles.

We managed to grew as fast as the euro area average, where perhaps it's only the Netherlands who grew slower than us and are not experiencing a crisis (yet? there was a scare about them too this week).

The most we can say is that Orbán himself admitted that he made mistakes and now he is changing. Give him the benefit of the doubt if you want to, that now, now, now he will see the light, leave his mistaken followers behind, and after the trauma of his sudden drop of popularity in 1993 or the loss of 2002 or whatever, he will finally recover his confidence that he does not need to live up to standards of atavistic chauvinists et al. Say that you think his true identity will finally shine, if you believe there is something better under his skin. But don't fool yourself and each other when even he admitted this week that things were going bad, bad, bad.

The Prospective Economist

I know that this comment will be considered more off-topic (by some) than further personal insults on Daniel or me, but I still must note how stunning it is that Fidesz (or at least the KDNP fraction) has time to fantasize about a Hungarian Legion d'honneur on the very same day we are dealing with the IMF to save us (if not our face).

And to fire the chief justice with a constitutional amendment, of course.

But they did delay the new election law, thank God.

Truly remarkable.

TheEuropean

To Daniel Prinz = TheProspectiveEconomist

How boring, you and yourself became the bulls*t generator of the day. Grow up, this is the Economist, not your nursery school.

I thoroughly agree with Professor Higgins of Indiana University,
that you are annoying and patronizing and totally pointless reading the ridiculous comments. You know nothing.

Little surprise Fidesz is doing so well; your comments clearly demonstrate the unsuitability of its opponents. .

About Eastern approaches

Eastern approaches deals with the economic, political, security and cultural aspects of the eastern half of the European continent. It incorporates the long-running "Europe.view" weekly column. The blog is named after the wartime memoirs of the British soldier Sir Fitzroy Maclean.

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