Hungary risks isolation as Orban miscalculates

By bne IntelliNews October 29, 2014

Kester Eddy in Budapest -

 

Hungary's bungled handling of the US visa ban on what Washington calls corrupt government officials has focused international attention on institutionalised corruption in the country, leaving it isolated and Viktor Orban, the fiery prime minister, in a trap of his own making, say critics.

Meanwhile, the equally bungled attempt – believed by many to be Orban's personal idea  to introduce the world's first internet tax has galvinised the previously torpid Magyar public and precipitated public protests across the country at levels unprecedented since Orban swept to power in 2010.

While his government, elected with 45% of the vote last April, is still firmly in control, the upsurge in criticism and discontent has rattled both Orban and his Fidesz party, while giving hope to opponents that the religious-like zeal of his core supporters may finally be weakening. “Never, in the last 35 years, including the last 10 years of the [communist] Kadar era, has Hungary been so internationally isolated as now,” thundered Ferenc Gyurcsany, president of the pro-Europe Democratic Coalition (DK), at a meeting with international press on October 28.

In the eyes of the former Socialist – and to many on the right, disgraced - prime minister, the reasons comprise Orban's “historically dramatic shift” in politics, “turning the car of Hungary from the west to the east,” and the accompanying growth in institutionalised cronyism and graft. “I'm not just talking about general corruption [typical of the region]. It's not just the domestic rivals of this government, but the main international players, like the US, saying that the whole government is infiltrated by corruption issues,” Gyurcsany proclaimed.

Indeed, in less strident tones  interlaced with profuse diplomatic praise and warm overtures to cooperate – Andre Goodfriend, the US charge d'affaires in Budapest, verbally lashed the Orban government on October 24.

Asked what he meant in a statement suggesting a possible breakdown in cooperation with Hungary as an ally, he replied: “Hungary was a country ahead of the others [in throwing off communism]… From that high point of hope and expectation to rapidly being one where [we see] the weakening of the rule of law, the attacks on civil society, the lack of transparency and how rapidly those trends are taking hold, my statement last week was more of a concern for a valued ally.”

Goodfriend pointed to Hungary's sudden decision last January to expand the Paks nuclear facility using Russian technology and €10bn in credit as an example. “How was the decision made? Was it an open tender? Was there transparency in the decision? And that gets back to the discussion of… an overall environment in which corruption can flourish,” he said.

He also scolded Hungary for its statements on crisis-hit Ukraine. “At this time of Russian aggression in Ukraine… this is a time to stand firm with the EU, and understand the sensitivities on the ethnic nationalism question, particularly with calls for autonomy among Hungarian ethnic nationals in Ukraine. This is not the time to have that discussion… [nor] to break with EU partners and to publicly criticise the approach which the partners have taken,” he said.

Fidesz fightback

Hungary steadfastly argues that it is intent on fighting corruption, with Mihaly Varga, the economy minister, telling parliament on October 27 that the tax authorities are investigating suspected large-scale VAT fraud. Except, critics point out, that these investigations are at subsidiaries of Glencore, Cargill and Bunge  three US-based food companies.

Budapest also continues to insist that Washington reveal the names and evidence behind the ban on six of its citizens entering the US. Orban, speaking to reporters in Brussels on the day of Goodfriend's multiple broadsides, stressed that Hungary could not begin an investigation without evidence being handed over, saying “many of us do not understand why this is not happening.”

But critics point out that the US made clear when first informing Budapest of the ban that it would reveal neither the names nor the evidence against the individuals, as visa issues are a confidential matter under US law. “It's a good game, blaming somebody else, knowing that [the US] cannot give this information," Agnes Vadai, MP and DK vice-president, tells bne.

Goodfriend confirmed that he told the Hungarian foreign ministry on October 6 that there would be no names or evidence released, and insisted that evidence was already available to the Hungarian government if it wished to investigate. “[We have] nothing from any source that is not available to others from an investigation. People come to us and say 'this happened to me'… We received nothing through any type of covert means,” he said.

Quite how long the impasse can continue is a moot point. “Since the US ban [was revealed], PM Orban has been politically trapped. As, supposedly, his close allies are involved in these alleged corruption cases, it would be a political suicide for him to reveal names, or launch real investigations into these issues,” Tamas Boros, director of Policy Solutions, a Budapest-based political think tank, tells bne.

Boros also notes out that prominent Fidesz politicians and pro-government media have begun accusing the US of seeking to depose Orban with false allegations of corruption. “At a time of crisis, the government typically seeks counterattack as a communication strategy,” he says.

But in a country where more than 65% of the population supports European integration and Atlanticism, such a policy is fraught with risk. “I'd say this would be an extremely dangerous path for the Orban to take,” Boros warns.

 

Hungary risks isolation as Orban miscalculates

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