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Brave new Hungary

Fidesz does not have any coherent ideology, but depending on the context, employs elements of various currents, mixing neo-conservative tropes (God, Patria, Family) with anti-globalization arguments (anti-corporation, anti-finance), classic populist slogans with anti-EU and anti-minority refrains echoed by extreme right groups.

Leader of Fidesz and Prime Minister of Hungary, Viktor Orban.

After Prime Minister Orban Viktor declared, while in the Romanian city of Băile Tușnad (Tusnádfürdő), that Hungary seeks to build an “illiberal system”, with Russia, China and Turkey as models to follow, two important questions emerge.

Firsty, how is it possible that one election cycle was enough to dismantle the results of 25 years of peaceful transformation towards a democratic, pluralist society, based on the rule of law?

Secondly, why does the European Union accept such stark policy shifts in one of its member states and then finance their realization?

When Fidesz gained back power in 2010 its declared goal was to radically remodel Hungarian society. It started right away in three main directions: the fundamental reshaping of the legal and institutional system, the centralization and redistribution of economic assets and an ideological offensive.

The transformation of the legal and institutional system included the rewriting of the country’s constitution, electoral laws and districts, reshaping the Supreme Court and the Constitutional Court, purging the judges and introducing changes that make it possible to pass laws with record speed.

Since 2010, the parliament where Fidesz and its coalition partner, the Christian Democrat KDNP, enjoy absolute majority, passed more than 850 new laws and numerous modifications, decrees and regulations. As a result, the governing coalition can carry out its agenda undisturbed by “outside” social or political control and is able to secure its future re-elections. An OSCE report concluded that “the main governing party enjoyed an undue advantage” during the 2014 elections, but the results were not contested. The coalition won with 2.2 million, approximately 44% of the votes - compared to 3.32 million, 53% in 2010 - but the composition of the parliament does not mirror the loss of more than a million votes (66.8% of the seats compared to 68%).

The legal changes were accompanied by a radical reorganization of the institutional system from state offices and public services down to such remaining pockets of autonomy, as local self-governments and universities, making sure that government-mandated officials control their everyday running.

Centralization and neutralization of independent institutions of regulation and control have been the leitmotifs of the sweeping reorganization of the country’s economic system as well. The state took over a considerable amount of economic assets - productive facilities, public utilities, infrastrure and land - via nationalization, forced buy-outs or simple government decrees.

Through laws, regulations and taxes the state is able to control and interfere with undertakings outside its orbit. The revamping of the economic institutional system included centralization of the decision-making mechanisms and putting Fidesz-nominees in charge of key institutions, like the Central Bank, Fiscal Council and the State Audit Office. The coalition made significant efforts to terminate cooperation with the IMF and to get out of the EU’s excessive deficit procedure, not in order to avoid the Troika’s grievous crisis management, but to get rid of interference from external regulative bodies as well.

The centralized economic assets are redistributed to the governing elite and a faithful Fidesz clientele. Through the public procurement system, closed bids or uneven competition land, key public works, major government programs from large-scale constructions to re-writing, printing and distributing school text-books tend to land in the closed circle of insiders. Government funds are also used to fulfil Fidesz’ political agenda, from feeding the state-run propaganda machine through financing the artificial reduction of public utility costs, to the construction of “white elephants”, like a series of ultramodern soccer stadiums.  

Fidesz politicians do not even deny that there is a radical redistribution of economic assets, but they “justify” it by pointing out that after the collapse of the old system, in the period of wild privatizations, members and allies of the reform-Communist political leadership had their opportunity to enrich. With the pretext of “correcting history”, instead of a more just and equitable distribution of wealth and development opportunities, the country’s current leaders establish the bases of their long-term dominance not only in political, but economic terms as well. Simultaneously with the creation of a wealthy new ruling class, Fidesz’ policy has led to a rapid impoverishment of large sections of the society. According to a recent OECD report, more than 25% of the population suffers from severe material deprivation (the highest in the OECD) and inequality and poverty have increased substantially since 2009.

In addition to expropriating and concentrating internal resources under its management, Fidesz uses European Union money to accomplish its program that undermines the most elemental EU values. Hungary is one of the key beneficiaries of EU funding; 95% of public investments are financed with EU contributions. Less than 2 months after Orban’s speech in Băile Tușnad, the European Commission signed a new Partnership Agreement with Hungary that will provide lavish funds for the forthcoming 6 years. Hungary is among the most corrupt Central European countries and corruption is particularly high in the distribution of EU funds. It’s not an accident that the government wages a war against the Norwegian funds, one of the few remaining sources that finance independent activities without its interference.

After it regained power, Fidesz launched a large-scale ideological offensive to imprint its political and aesthetic values into Hungarian society. Making use of an efficient and omnipresent propaganda machine, extremely tight control of the media and its predominance in key positions of decision making, Fidesz leads a genuine cultural revolution, from renaming streets and reshaping public spaces, closing down and establishing scientific, memorial and artistic institutions, radically altering the system of education, from kindergarten to universities, changing theatre directors, re-organising the film industry and many others.

Fidesz does not have any coherent ideology, but depending on the context, employs elements of various currents, mixing neo-conservative tropes (God, Patria, Family) with anti-globalization arguments (anti-corporation, anti-finance), classic populist slogans with anti-EU and anti-minority refrains echoed by extreme right groups. This eclectic rhetoric is embedded in a nationalist discourse depicting an imaginary, pure and noble nation that is alternately the victim of historical injustices and/or a hero and example for the whole world.

Mr Orban (and his team) use skillfully identity politics to create a much needed feeling of community, solidarity and purpose among their followers and identify the enemies that ‘threaten’ this unity. They use a rather exclusive notion of nation, re-heating the slogan of Matyas Rakosi, the Communist dictator of the 1950s, “those who are not with us, are against us”.

Used in the external context, however, the nation becomes immediately inclusive; one of the first measures Fidesz took in 2010 was to give citizenship and voting rights to Hungarian minorities living outside the country. This policy paid off: at the 2014 spring election more than 95% of the “new” Hungarian citizens voted for the party.

By now this tightly knit-together system works at full speed and if eventual hurdles appear, like an unexpected move by the Constitutional Court demanding a revision of a government decision, it’s quickly resolved by direct intervention. Formally a pluralist parliamentary democracy, Hungary has in fact become a personalized one party system.  There is hardly any distinction between the government and the main party of the governing coalition. Fidesz is a highly centralized, monolithic party, without any visible internal divisions, run under the tight control of Prime Minister Orban.

Fidesz’ full-scale domination of the Hungarian society would not have been possible if there were attractive and feasible alternatives to it both inside and outside of Hungary. The domestic opposition is weak, divided and disorganized. The reformed Communists had three opportunities to prove that they were able to create a democratic, just and efficient society and they failed each time. They failed to address such fundamental issues as the heavy social consequences of the radical privatizations, the transition crisis, the situation of the Roma minority, the problems of land, agriculture and the countryside, the absence of an efficient small and medium-size domestic entrepreneurial group and of grass-root democratic institutions.

The other parties of the opposition, including the new formations that emerged from various civil society movements, are also pathetically weak and unable to mobilize people, despite increasing disappointment with Fidesz’ policy.

The picture is similarly desperate in the wider context. For several years now, the EU’s only answer to the waves of economic, financial and political crises that have undermined the social and political acquis and the productive base of our continent has been the uncritical following of the same neoliberal policies that had led to the crisis. By imposing unrevised austerity packages and signing trade and investment deals that give ever more power to corporations, the EU has lost a lot of its credibility and attractiveness. Its belated and hesitant reactions to such major crises like the Syrian war or the annexation of the Crimea seriously undermine its role as a guardian of fundamental human and social rights as well.

The only efficient answer to this situation is to start building urgently, from scratch, a new economic and social model based on genuine democratic participation and control, social justice, human rights and sustainable development - in Hungary, in the other European countries and within the EU itself. Otherwise, Europe’s people remain trapped between the Scylla of nationalist authoritarianism combined with populism and the Charybdis of deregulated financial capitalism that takes us straight into the wall.

About the author

Yudit Kiss is a Hungarian economist and author, based in Geneva. Her research focuses on the post-Cold War economic transformations of Central Europe; her latest book is Arms Industry Transformation and Integration: The Choices of East Central Europe (OUP, 2014). Her articles of wider interest on politics, social change and culture have been published, among others, by the Guardian, Lettre International, El Nacional, Nexos, Gazeta Wyborcza & Eurozine. See here.


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