COMMENT: What is to be done about Hungary?

By bne IntelliNews November 27, 2014

Mark Adomanis in Washington DC -


Ever since returning to power in the spring of 2010, when his “centre” right Fidesz party managed to win a two-thirds majority in parliament despite netting only a little more than 50% of the popular vote, Hungarian Prime Minister Viktor Orban has gradually attracted more and more criticism.

Paul Krugman, despite being far better known for his macroeconomic commentary, was the first high-profile Western analyst to really sound the alarm bell about Orban and his plans for Hungary. Ever since late 2011 when he published a (in retrospect, shockingly prescient) column about the corrosive impact of recession on the country's democratic institutions, Krugman has regularly warned that Orban is a wolf in sheep’s clothing and that his protestations of democratic values should not be trusted. Hungary is too small a country to be a constant front-page topic, but in addition to his own output Krugman has frequently allowed one of his Princeton colleagues (Kim Lane Scheppele) access to his priceless internet real estate to warn the broader public about Fidesz and its slow-motion march into soft authoritarianism.

Orban has only really started to draw a lot of negative attention, though, since his foreign policy took on a noteworthy pro-Vladimir Putin tinge. Despite fierce resistance from Brussels and the fact that it blatantly violates a number of Europe-wide energy commitments, Hungary's parliament recently approved a law that would allow Russia's Gazprom to start building the huge South Stream gas pipeline, which will bring Russian gas up through Southern Europe into the heart of Europe. In case anyone still missed the subtext, Orban's government also recently took out a significant loan from Moscow to expand a nuclear power plant (with Russian technical assistance).

Many of the tricks that Orban has employed – packing the courts with loyal supporters, steering government contracts to firms run by privileged insiders, even directing newspaper advertising revenue away from opposition-linked publications – to consolidate his power should sound familiar to students of Russian politics. Orban has been careful not to run too blatantly afoul of the law or of democratic best practice, but the general thrust of his policies, and their focus on strengthening his personal power, is impossible to miss.

Although both the US and the EU have grown increasingly alarmist in their declarations about Hungary, the practical steps they’ve taken thus far have been limited. The EU has written a report and issued a number of statements, but the actual costs imposed on Hungary by Brussels have been negligible. There’s been talk of cutting off aid and limiting access to various EU funding streams, but to date it’s been just that, talk.

The US, for its part, has been slightly more active. In a policy that bears a distinct echo of the "Magnitsky Act" – legislation designed to punish to Russian officials allegedly responsible for the death of Russian whistleblower Sergei Magnitsky in a Moscow prison in 2009 – the US has gone so far as to impose travel bans on a number of Hungarian government officials. Despite hollow protestations that these bans "aren't related to Hungarian government policy," it seems clear that the Obama administration has decided that Hungary should be treated more like an adversary than an ally. Even the travels bans (which would have been unimaginable just two or three years ago) are still not that dramatic of move, and have had no apparent impact on Orban’s decision making.

We need to talk about Viktor

The reason that no one has really done anything about Orban is a simple one: there’s not very much that can be done. The West has gotten very good at sanctioning and punching countries that are outside of its warm embrace, but it’s never really had to police its own ranks very diligently. The simple reality, one that has been long known to “transitologists” and other students of the EU as an institution, was that the most effective lever was the offer of membership: once a country was in the fold, Brussels’ practical ability to influence its policy disappeared almost entirely. This is why no one really knows how to handle Orban because by all of the EU rulebooks he simply shouldn’t exist.

Probably the single most obvious lesson that can be drawn from Hungary is the importance of institutional design and, more particularly, just how bad the elite in charge of European integration has been at it. Much like with the euro currency (whose institutional failings became clear only in a moment of existential crisis), the architects of the EU never thought about the possibility of expelling a member. The assumption was always that if a country had ever achieved the level of good governance and democratic institutionalization necessary to join the EU, then it would not regress. Progress, in this simplistic worldview, was a one-way street: away from authoritarianism and towards democracy.

Hungary also drives home the importance of ensuring that countries only join “the West” when they are truly ready. In the aftermath of the war in Ukraine’s Donestsk and Lugansk regions, there has been an awful lot of talk about rapidly incorporating Ukraine into Nato and, eventually, the EU. The regression of Hungary under Orban shows that this would be a short-sighted and ultimately counterproductive step, as the ability to truly compel Ukraine to reform would be lost the moment the ink on its accession treaty was dry.

As if any reminders were necessary, history hasn’t ended. The European elite needs to do some very hard thinking about how it is going to deal with the many forces (nationalism, xenophobia, authoritarianism) that it thought had been banished from the continent forever. 

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