Hungary

   
 

Executive Summary

Erosion of checks and balances continues
Hungary has been governed by Viktor Orbán and his Fidesz party since 2010. In the April 2014 parliamentary elections, the government succeeded in maintaining its two-thirds majority – despite receiving 600,000 fewer votes than in 2010 – which allowed Orbán to be elected prime minister for the third time. Following a number of lost by-elections, the government lost its two-thirds majority in February 2015. In the period under review, the third Orbán government continued its dismantling of checks and balances and its “refeudalization” of the economy and society. With the April 2018 parliamentary elections approaching, the government’s agenda has increasingly been shaped by electoral considerations.
Democratic institutions being hollowed out. Assault on NGOs, higher education
Throughout the period under review, the Orbán government has continued to hollow out the institutions of democracy. It has demonstrated little trust in the soft power of its huge propaganda industry and has stepped up efforts to weaken the opposition while undermining the remaining checks and balances. It has limited the opposition’s access to the public by restricting opposition parties’ use of billboards, which had played an important role in the 2010 and 2014 election campaigns. It has further tightened its control over the media, as the last four remaining regional dailies were bought by oligarchs close to Fidesz in July 2017; it has massively campaigned against independent, foreign-funded NGOs and introduced a new law that makes their work more difficult; and it has sought to close the Central European University (CEU), which is not only the country’s most prestigious institute of higher education but is also a stronghold of independent thinking. The assault on NGOs and the CEU has been part of a massive campaign, marked by anti-Semitism, against the Hungarian-American millionaire-philanthropist George Soros. As a centerpiece of Fidesz’s election campaign, these efforts have been closely linked to Fidesz’s ongoing anti-refugee and EU rhetoric.
Corruption, crony capitalism pervasive. Recovery based on EU funds - stones, not brains
Hungary’s political system, economy and society have been linked by pervasive corruption and a special variant of crony capitalism. Hungarian society has increasingly taken on the features of a proto-feudal system in which the supporters of the regime benefit from corruption and nepotism. Economic policy has been characterized by an increasing “re-nationalization” of the economy and a “re-feudalization” of public procurement. In the war among the oligarchs, Lajos Simicska and Zoltán Speder have lost to Lőrinc Mészáros, István Garancsi and István Tiborcz (Orbán’s son-in- law). The Orbán government’s decisions are largely meant to provide investments and business opportunities for this network. As a result, the recovery of the Hungarian economy since 2013 has been strongly based on the influx of resources from European funds and on investment in stones rather than brains. Given the fact that the education and R&I systems have been subject to chronic underfinancing, political control and dubious organizational reform and that the shortage of qualified labor is growing, Hungary’s medium-term economic perspectives look bleak.
Some reforms, but without consultation
In the period under review, the Orbán government adopted a number of institutional reforms. To underline its reform commitment, it created a new Competitiveness Council and announced the creation of a cabinet committee on family affairs. In October 2017, in a campaign-driven move, it also appointed two new ministers, János Süli for the Paks-2 new nuclear station and Lajos Kósa for the Modern Cities Program, thereby continuing the government’s proclivity to create top-level positions for its allies. While Orbán back in 2010 emphasized the need for small government, the third Orbán government in fall of 2017 consisted of 178 ministers, state secretaries and deputy state secretaries, twice the number of the Bajnai government in 2010. At the same time, policymaking has continued to suffer from over-centralization, hasty decisions and the renunciation of public consultation and external advice.
EU is last remaining veto player. Patience with Orbán wearing thin
Due to the fact that the Hungarian institutions meant to counterbalance the power of the government – such as the Constitutional Court, the media and the president of Hungary – have failed to fulfill their mandates, the EU is the last remaining veto player. Indeed, as the EU has repeatedly made a point of highlighting corruption, administrative shortcomings and illegal practices in the Hungarian government, Brussels is unsurprisingly increasingly attacked as an enemy in the eyes of the Orbán government. On October 23, 2017, an important national holiday, Orbán held a campaign speech in which he began by drawing a parallel between the former “homo sovieticus” and the “homo brusselicus” as a historical burden of Hungary and closed by stating that “true Hungarians” would vote for Fidesz. In its confrontation with the EU, Fidesz has focused primarily on two ongoing infringement processes in political matters and the European Court of Justice’s refusal of Hungary’s attempt to sue the EU on the issue of refugee allocation to demonstrate its commitment to an alleged fight for freedom. These campaigns, together with several other anti-EU measures have deepened the conflict between the Hungarian government and the European Commission and the broad majority of EU members states. Even within the European Peoples Party, the patience with Orbán has worn thin.
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