Hungarians Reject Government Stab at Social Reform

A small victory for democracy

On Sunday Hungarians overwhelmingly rejected government measures introduced last year in what was projected as the first steps in its social reform package. These first steps included three different types of user fees for the health and education sectors: a visit fee, a hospital stay fee, and tuition fees for higher education.

The significance of the referendum is myriad. Firstly, it was the most successful referendum in post-communist Hungary, surpassing those which had allowed for Hungary's entry into the EU. Fifty percent of eligible voters cast their ballots, with over 80% in favour of scrapping the various fees.

Not only was such a turnout unprecedented, it also indicated a sharp turn in recent trends. Voter turnout in referendums have gradually declined over the years, with the results of the last referendum in 2004 (a dual referendum on automatic citizenship for Hungarians living in neighbouring countries and the privatization of health care) being declared invalid because of a failure to meet the minimum votes required. In Hungary, a total of twenty-five percent in favour or against a question is required in order to be valid. Thus, if the total voter turnout is 48% and each answer to a referendum question garners only 24% of the vote, the result is invalid; conversely, if there is only a voter turnout of 30% yet 25% is in favour of one question while 5% is against, then the results are valid.

Aside from the massive turnout, the other most significant aspect of the referendum is that it was the first such referendum which sought to undo government legislation (March Showdown?). Although it was the main opposition party, the FIDESZ, which put forward the referendum questions, the fact that they addressed the everyday concern of Hungarians is the main reason for its success. Not only this, it has held the prime minister, Ferenc Gyurcsany, accountable for his words and deeds. During the election campaign he explicitly accused his opponent of wanting to introduce various user fees and pledged to do no such thing; a few month later he did exactly the opposite.

Unfortunately, the FIDESZ has sought to extract some sort of political gain from the referendum campaign, but it has since played down its rhetoric in this respect. Nonetheless, it mustn?t be assumed that the massive turnout and result in favour of scrapping the various user fees will somehow translate into votes for the right-wing opposition party. Many who voted against the government measures are still wary of the FIDESZ, in particular its populist leader Viktor Orban.

During the referendum campaign, while the FIDESZ may have attached too much political significance to the referendum by claiming that it would entail the beginning of the end for the Gyurcsany government, there is no doubt that it has dealt a serious blow to the ruling Socialists and the junior coalition partner, the Liberals. For both, the referendum result was a loss of prestige. While both had counted on a majority vote against the various user fees, none had expected such a massive rejection. Once again, Hungarian polling institutes have a lot of soul searching to do as most were way off the mark. Polls had assumed that the vote would around 65%, with an overall turnout of only 35-40%.

Apart from the shoddy polling, not everyone is happy about the referendum outcome in and of itself. Indeed, some have observed that the result wasn't as outstanding as most people think. Compared to the old system in where a simple 50% overall turnout was required for a result to be valid, Sunday's referendum would have barely made the threshold.

This may be true to a certain extent. Nevertheless, of all the referendums held in Hungary since the fall of communism, it can't be denied that Sunday's referendum was the most successful. Furthermore, if we acknowledge that the latest referendum was barely successful if we look at it though the prism of the past, then we can also conclude that Hungary shouldn't be a member of the EU, for those results were much less impressive (the EU referendum had a total turnout of only 45%). In fact, the reason why Hungary changed from the old system to the present one was because it was then known well in advance that the government wouldn't be able to secure the referendum victory needed for EU accession under the old rules.

Yet that was then and this is now. As the present referendum was a binding one, the government will introduce legislation immediately to scrap the user fees. Despite this, it has vowed to carry on with its reform policy. For most, however, the need for reform isn't the problem; what had angered most was the manner in which it is being done.

In many respects, the Hungarian government has little choice but to carry on with its reform policy. They are not only necessary to actually bring the country's fiscal house in order, but are one of the main objectives of the Lisbon Accords. The Lisbon Accords are a set of EU-wide reforms which seeks to make Europe the most competitive market economy by 2010. Hence, the corporation friendly reforms which are being introduced are not exclusive to Hungary but are being forced through everywhere in the EU. Likewise, people in most EU states are against such "reform" for it seeks to dismantle what is left of the welfare state as well as undermine consumer and worker protection. Hungary's referendum response, therefore, was not unique: user fees which were introduced in Slovakia and the Czech Republic have since been revoked; elsewhere in Europe, Lisbon style reforms have often been met with strikes and other forms of industrial action.

Although Sunday's referendum represents a sense of victory for many, it does set a dangerous precedent for the future. There is the fear that the use of the referendum as a political weapon may boomerang on the FIDEZSZ if they succeed in gaining control of parliament in 2010. The ultimate nightmare is that the situation could spiral out of control, as it had in California, if a referendum is used during each government cycle by the opposition in order to contest government policy.

For now, the government in Hungary is clearly on the defensive as its entire health care reform package is in jeopardy. The various user fees which the Hungarian public overwhelmingly overturned are the mere tip of the iceberg. There is one more referendum which is yet to come. Put forward by an individual member of the public and not a political party, it seeks to forbid the present government from privatising health care; in other words, plans for introducing private health insurers (i.e., HMOs) in place of the government is being challenged. This referendum question has yet to be officially sanctioned. If it is, as many hope, this could well be the killing blow to the government's plan to privatise public health care in Hungary, and will put the brakes on the neo-liberalist attempt to hand over the health and welfare of millions to a few profit-oriented multinational corporations.