How Hungary’s Viktor Orbán got his groove back


Despite a united opposition front, prime minister Viktor Orbán is headed to a crushing victory in Hungary’s April 6 parliamentary elections this weekend, consolidating his hold on power in the emerging central European country of 10 million.Hungary Flag Icon

Orbán’s victory looks so assured that it’s hard to believe anyone ever thought that his chances for 2014 reelection would be much tougher.

Only a year ago, Orbán appeared to have a much more troubled path to victory.

For example, an Ipsos poll from January 2013 shows that the three largest of the five parties that comprise the opposition, Osszefogas (‘Unity’), would win a combined 43% of the vote, compared to just 41% for Fidesz – Magyar Polgári Szövetség (Fidesz – Hungarian Civic Alliance). The largest opposition party, the Magyar Szocialista Párt (MSzP, Hungarian Socialist Party) won 32% of the vote.

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RELATED: Hungarian left unites, but will it be enough to stop Orbán?

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But the most recent March 31 Századvég poll gives Fidesz 51% of the vote, with just 25% for Unity. The far-right, anti-Semitic, ultra-nationalist Jobbik Magyarországért Mozgalom (Jobbik), which has surged over the past six months, would win 18%, and there’s a chance that it could actually win more seats on Sunday than the center-left Unity.

In early 2013, despite an uphill challenge under new election rules, designed to benefit Fidesz, the opposition had a strong case against Orbán, who has isolated Hungary from the rest of the European Union, increasingly chipped away at democratic checks and balances and the rule of law, and nearly torpedoed an already struggling economy with tax increases, further budget cuts, and a haphazard nationalization of Hungry’s private pension system.

What happened?

When Orbán took office after winning a landslide victory in 2010, he immediately enacted a controversial media law, which created a special media panel (staffed by Fidesz loyalists) that could impose huge fines on media companies for ‘unbalanced’ news, and which transformed Hungarian state media into Fidesz’s propaganda arm. The law confirmed the worst fears of Orbán’s critics and alienated European policymakers.

Orbán then picked a fight with the International Monetary Fund, which had provided Hungary with a €20 billion loan in 2008 to help weather the global financial crisis, largely over Orbán’s decision to introduce a 16% flat income tax as part of a move to shift the tax burden from income to consumption. When the IMF suspended review of Hungary’s loan program, Orbán instead directed a ‘crisis’ tax at some of the largest companies in the country, mostly in the energy, retail and telecommunications sectors, many of which are foreign-owned. He also effectively nationalized the country’s private pension system, worth about €10 billion, in a bid to help shore up the country’s public debt.

In 2011, Orbán and his allies, who enjoy a two-thirds majority in Országgyűlés (National Assembly), enacted a new constitution, further consolidating power in the government’s hands. Later that year, it adopted a law that reduces the central bank’s independence, as well as new election law that reduced the number of seats in the National Assembly from 386 to 199, that provided that more of those seats will be selected on a first-past-the-post basis in single-member constituencies (though 93 will still be selected on the basis of proportional representation), and that streamlined Hungarian elections into one round for the first time. The changes are widely seen as motivated to retain Fidesz’s grip on power by maximizing its electoral advantage against a divided opposition.

In 2013, when Hungary’s constitutional court struck down part of Orbán’s new election law, Fidesz passed a new constitutional amendment eroding the court’s powers.

Orbán raised Hungary’s VAT to 27%, the highest rate in the European Union in early 2012, despite ongoing tension with the IMF and an EU decision to suspend aid to Hungary over its budget deficit, and Orbán spent much of the rest of the year attacking both IMF and European interference in Hungarian affairs, even as the Hungarian economy contracted by 1.7%.

Over the course of 2013, however, Hungary’s economy improved — instead of contracting, GDP grew by around 2.7% in the fourth quarter of 2013 for an annual rate of 1.1% in 2013, with 2% growth forecast this year. What’s more, Orbán succeeded in pushing the country’s deficit below 3% of GDP. That gave him the financial moxie to kick the IMF out of Hungary last year, announcing last summer that Hungary would pay off its outstanding loan amounts, a popular move with Hungarians, who have welcomed Orbán’s nationalist rhetoric.

Though the extent of Hungary’s turnaround is debatable, Orbán heads into the election this weekend with economic tailwinds after four tumultuous years that have mixed both neoliberal and unorthodox economic policy.

A unified anti-Orbán front in 2013 might have more effectively countered the narrative of Hungary’s resurgence, but it took the Hungarian opposition much too long to unite in the face of Orbán’s rising strength.

Instead, the  Socialists and the other members of today’s Unity coalition spent too much time fighting each other, bickering over what would become their common agenda, and deciding who would lead Unity. They finally settled on Socialist leader Attila Mesterházy instead of former prime ministers Ferenc Gyurcsány or Gordon Bajnai. That may have been a mistake — Mesterházy led the disastrous 2010 election campaign, and despite his flaws, Gyurcsány, who served as prime minister between 2004 and 2009, is probably the most charismatic leader within the Hungarian opposition. 

Gyurcsány initially negotiated the 2008 IMF loan, which left Hungary committed to taking painful and unpopular budget steps that ultimately delivered the 2010 elections to Orbán, who served as a prime minister between 1998 and 2002, his autocratic tendencies limited by a multi-party governing coalition with a slimmer majority. Bajnai and Gyurcsány did the Socialists no favors by leaving the party to found their own respective groups, Gyurcsány’s Demokratikus Koalíció (DK, Democratic Coalition) in 2011 and Banjai’s Együtt 2014 (E14, Together 2014) in 2012.

Gábor Demszky, an economic liberal who served as mayor of Budapest between 1990 and 2010, might have been a better choice to head the alliance instead of Mesterházy, Gyurcsány or Bajnai. He he was wise enough not to run for reelection in 2010, and after four years out of office, he might have been a more effective advocate for change, untainted by the Socialist government’s decisions in 2008 and 2009 or the disastrous 2010 campaign .

In fact, the Unity coalition peaked the day it came together in late January. The news that Gábor Simon, a former deputy leader of the Hungarian Socialists, was arrested for forgery and failure to declare €700,000 in hidden assets in an Austrian bank account, fatally damaged Unity’s credibility.

Though there’s no disputing that Orbán’s government has run roughshod over press freedoms, used his supermajority to enact policies without public debate or transparency, and to centralize power and reduce or eliminate those checks that remain on his power.

But the opposition is somewhat overstating its otherwise strong case against Orbán’s overreach, making it less likely to take any of their arguments seriously:

“The election will be free in the sense that you can vote in a secret ballot, but not fair,” says Gordon Bajnai, a former technocrat prime minister of a Socialist-Liberal coalition. “Orban is trying to build a post-Soviet country on the model of Central Asia, Ukraine or Belarus. Hungary is en route to becoming an increasingly managed democracy.” But the pollsters could also be wrong, says Mr Bajnai, because many people are scared to voice opinions to a stranger. Collective folk memories from the dictatorship have returned. “Fidesz has instilled fear into the hearts of many.”

Whatever autocratic sins Orbán may have committed in his first term, Hungary is not Uzbekistan.

The ultimate embarrassment might be if Jobbik outpolls Unity on Sunday. Jobbik, which entered the National Assembly for the first time after winning a stunning 16.67% in the 2010 elections, is now also on the rise under the charismatic leadership of the 35-year-old Gábor Vona.

Despite beliefs that Jobbik’s popularity would recede as the Hungarian economy improved, Vona has made a strong push to appeal to young voters, and he’s campaigned on a more moderate agenda than in 2010, eliminating some of the harshest xenophobic, anti-gay and anti-Semitic rhetoric in favor of more orthodox calls for economic reform and a demand for a referendum on Hungary’s EU membership. That doesn’t mean Vona has eliminated all of Jobbik’s nastier tendencies — the party launched its campaign at a rally inside a former Jewish synagogue in February, to the disgust of Hungarian Jews.

If Jobbik actually improves on its 2010 showing, it could gain some real momentum, especially as it positions itself as the most euroskeptic option for the May European parliamentary elections.

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