Thursday, 3 March 2011

Viktor Orbán: Centre Stage at the EU

Hungary's accession to the rotating EU Presidency in January has thrown up the sort of political contradictions that may cause reflection by Europe's right-of-centre parties.

This Presidency is personified by the robust figure of prime minister Viktor Orbán, the 47 year-old, chairman and co-founder of Hungary's centre-right Fidesz party. Fidesz stormed back into power at Hungary's National Assembly elections last May, gaining a two-third's majority and becoming the first Hungarian party since the Soviet era to win outright election victory.

In Orbán's maiden speech to the EU Parliament, heading the latest Presidency to carry forward the EU's political agenda, he presented all one might expect from someone who has gained a rebellious political reputation, but it was far from what most MEPs wanted to hear.

Considerable discontent exists in the EU parliament over measures introduced in Hungary since Orbán's election. Aware of this, he chose to focus on defending his national position before MEPs rather than on the Presidency programme. And he did so not by explaining his legislation, but by accusing his critics of being anti-Hungarian and anti-Fidesz (because his governing party enjoys a freedom from coalition denied to others).

What has particularly upset liberals in the EU is Orbán's revision of Hungary's media laws, ostensibly to introduce EU compliance. However, additional requirements will compel all publishers, including those online, to register with a Fidesz-dominated media council and comply with legal requirements to reveal sources if required and to provide objective, balanced and 'moral' reporting, with threats of suspension or fines for non-compliance.

This is not only viewed as an undemocratic measure for an EU state, it is also seen to undermine the EU's ability to support press freedom within non-EU countries that exercise illiberal sanctions against media and journalists.

The conundrum that particularly now faces right-of-centre parties in the EU is the attitude to strike towards their nominally centre-right Hungarian partner. Uncertainty lies not just over Orbán's media laws, but also over his steps to reduce Hungary's budget deficit by nationalising the country's private pension funds and applying seemingly protectionist turnover super-taxes to many of the largest foreign companies operating in Hungary.

These are not the kind of measures one would naturally expect from a centre-right Christian Democrat party, of which EU group Fidesz is indeed a member. Yet, other legislation introduced by Orbán might provide succour even to economists of the Austrian School. Income tax has been levelled to a flat rate of 16 percent and ordinary corporate taxes also cut to 10 percent. By these tax-cutting measures, and provision of preferential loans to SMEs, Orbán hopes to raise employment and stimulate growth in Hungary's stagnant economy.

Overall, however, Orbán's economic package – the New Széchenyi Plan – distinctly departs from the response of most western economies facing excessive debt – plus, in Hungary's case, the pressures of repaying a $25 billion IMF loan. Hungary's treasury will be temporarily boosted by embracing private funds but deep and meaningful balancing cuts in government expenditure have yet to materialise.

The contradictions inherent in Viktor Orbán's conservatism confuse western observers, but they are better understood by Hungarians themselves. Since the 1980s, Orbán has followed a very public political journey, from an aggressive ultra-liberal to an ultra-conservative. As a radical liberal he became a natural activist against the elitist form of capitalism introduced by the 1990 election of the first post-communist HFD government. In this same year, Orbán placed his Fidesz party under the umbrella of the Liberal International. But over the following decade he took political advantage to change Fidesz into a right-wing conservative party. After winning the party's first election into government in 1998 he immediately switched political allegiance to Europe's Christian Democrats.

In this final guise, Orbán has led his party into representing itself as a pillar of traditional – though some would say authoritarian – Hungarian values. (Online blogs speculate he could apply his media laws to impose respectable family values on Hungary's most popular reality TV show!) In practice, Fidesz has polarised Hungarian politics, unifying the right against all the rest, who are roughly dismissed as "Liberalbolsheviks".

Yet, isolating Hungary's liberal SZDSZ party is an ambition shared with Fidesz' main opposition, the socialist MSZP. And between Hungary's two major competing parties there is evidence of even more co-existence of otherwise 'rightist' and 'leftist' policies.

The MSZP-led governing coalition ousted by Fidesz last year advocated free market economics and replacement of universal benefits with the targeting of social needs. In contrast, Fidesz has favoured state intervention in the economy, including potential ownership of significant economic enterprises. Fidesz' critics suggest the party shows too much support for favoured businesses. It has appointed party supporters to supposedly independent public bodies. Doubts are also expressed over the party's reluctance to introduce fundamental economic reforms, relying instead on the financial largesse of EU grants.

Contradictions concerning the political direction of Fidesz, and its outspoken leader, will therefore certainly remain. To many conservatives, Orbán's bold, plain-talking, and lack of inhibition in supporting national identity, are qualities to admire. And moderate Conservative parties facing similar budget issues, such as Poland's Civic Platform, will certainly offer Orbán support where they can. But he is likely to continue to be viewed as a controversial and divisive figure from the liberal-minded, cooperative ethos that predominates in the institutions of the EU.

Now at EU centre stage, Orbán will hope to separate his approach to domestic economic management from his wider EU responsibilities: namely, to secure the economic governance and crisis management reform programmes that have been outlined for the EU by the Belgian Presidency. Fortunately, he is not a newcomer to the EU, nor to the practice of adapting policy to secure political ends.

Orbán must hope to employ the charm and resolution he undoubtedly possesses to win the consensus needed from his European colleagues to be able to claim a successful Presidency. But, over the coming months, many in Brussels will surely experience anxious moments in expectation of Orbán-style departures from the conventional harmonised EU script.

N.B. Since this piece was first written in January, Orbán has somewhat modified his media law proposals at the behest of the European Commission. Private online bloggers, for one, will not now be required to register with the State.

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