Sunday 1 January 2012

What's going on in Hungary?

By Alan Go

h/t: Paul Krugman

After making ten amendments in their first year of power, the right-wing Fidesz government of Hungary, led by Prime Minister Viktor Orban, has now introduced an entirely new constitution. The word ‘republic’ has been removed from the official name of the country, but that is the least worrying change taking place. Every move from the current governing party has been heading in a disturbingly authoritarian direction, and there are deep fears for the future of a functioning, democratic Hungary.

With severe economic problems that have remained from the Soviet area, exacerbated hugely by the housing bubble and economic crisis, Hungary’s currency has been enormously volatile in recent years. Harsh austerity measures have been in place since 2007. The resentment towards the socialist party that had been governing since 2002 built up, resulting in a landslide victory for Fidesz in Spring 2010. They received 53% of the vote, which turned into a crucial 68% supermajority in the Hungarian Parliament.

The other beneficiary of the public’s discontent has been the Jobbik party, a former outsider with anti-semitic roots which even had its own paramilitary wing.

The most worrying change has been for the judiciary system, whose independence has been severely tarnished. Fidesz has been stacking the Constitutional Court with favourable judges, the age of retirement has come down, forcing many judges to retire immediately, and a single person now has sole authority to replace judges, move them to different positions, and even to decide which judge can hear each case.

Worrying new media laws have taken effect requiring an ambiguous standard of political balance. Self-censorship is already taking place, and one opposition friendly radio station was denied permission to have its license renewed. The new restrictions even apply to online media.

But perhaps the most blatant example of dictatorial behaviour concerns regulations about religion. There are 358 recognised faith groups in Hungary. Only 14 of them will be officially sanctioned. What this means for the remaining faiths, which include Islam and evangelical branches of Christianity, is not entirely clear. A two-thirds majority in Parliament will be required to have new faiths recognised. Orban seems to have made clear that he intends his country to be a Christian one. Marriage must be between a man and a woman, and all life is now protected from the moment of conception.

Interference with the Central Bank has destroyed the chance of a finanial bailout from either the IMF of the EU. Hungarian debt has been downgraded to junk status, and yields on ten year bonds are at an unsustainable 9.7%. If economic conditions stay depressed, as it is looking increasingly likely to happen, Hungary will struggle to escape from its budget deficit and other problems.

Fidesz’s popularity has dived since it came into power, and is now at less than 20%. However, the nature of the legislation they have rushed through is such that successive governments will have a hard time reversing the procedure. New electoral district boundaries have been drawn in such a way that Fidesz would have won all three of the last elections (two of which they actually lost). The terms of many official positions, including the head of the judicial office, and the head of the budget council, have been lengthened, and the people in those positions can stay in them unless new persons are agreed with a two-thirds majority. Other areas of law, such as tax policy, are also protected by this two-thirds supermajority requirement.

Although it has received considerably more attention than Syria, issues in Hungary have still failed to attract much attention from the press. International figures, including US Secretary of State Hilary Clinton, have expressed concern, but the fear is that countries will be too preoccupied dealing with their own economic crises to mount any form of effective protest.

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