Hungary's Political Crisis Deepens
Is both the government and country on the verge of collapse?
Since a resounding defeat of its policies in a national referendum some three weeks ago, the present Hungarian government of Ferenc Gyurcsany seems to be sinking deeper and deeper into crisis. A major blow was dealt to Gyurcsany's ruling Socialists when its junior coalition partner, the Liberals, announced yesterday that it will pull out of the coalition at the end of April.
This announcement by the Liberals was in response to Gyurcsany's wish to sack the Liberal Health Minister, Agnes Horvath, whom he held responsible for the referendum defeat (Hungarians Reject Government Stab at Social Reform). The referendum was held on March 9th and focused on the issue of user fees, with two of three relating to the health sector: the widely hated visit fee and the hospital stay fee. On top of this, other so-called reforms which saw the introduction of stringent quotas and the closing of many hospitals have all made Horvath widely unpopular. In fact, polls showed her to be the most unpopular politician in the country. It should come as little surprise, therefore, that the referendum saw a huge turnout overwhelmingly reject the government's policies. Some 85% of voters agreed to do away with the visit fee and hospital stay fee, as well as university tuition fees.
Although the prime minister and the population at large hold the Liberal Health Minister responsible for the failure of government reforms in the area, the Liberals countered that the reforms were actually Gyurcsany's idea and that the Liberals were merely doing his dirty work. Most agree with the Liberals on this point, as well as with the comment by the Liberal spokesperson Gabor Horn who commented on the sidelines while Gyurcsany was trying to rationalize the referendum result "that's not what they said Feri, they told you to go to f*** hell, admit it.?
As if to add insult to injury, the Liberals are also besieged by an internal crisis. Shortly before the referendum, it was revealed that the election of the present leader, Janos Koka, may have been fraudulent as votes were discovered of delegates who weren't even there. This has ultimately led to a split within the party between supporters of Koka and the followers of the other contender for the leadership, Gabor Fodor. Fodor is seen by many as being more intellectually honest and in touch with the people, as opposed to Koka who is often regarded as a typical neo-liberalist technocrat.
Because of pressures from within and without their parties, both the Socialists and the Liberals have now resorted to attacking each other, much to the delight of the main opposition party, the FIDESZ. Meanwhile, even the flip-flopping conservative party, the Hungarian Democratic Forum (MDF), which has been at times more critical of the FIDESZ than the Socialists despite standing on the same side of the ideological divide, has seen the writing on the wall. During previous attempts to topple the government through no-confidence votes and other such actions, the MDF had stated firmly that they were not in favour of changing the government. Now they have joined the chorus of voices calling for Gyurcsany to resign.
Political options
Whether the present crisis will lead to the fall of the Gyurcsany government still remains to be seen, however. Although the Liberals have sent the ruling Socialists a strong and clear message, they are mindful of what a new election at this point may mean. Their showing in the polls at this stage is dismal; if a new election were to be held they wouldn't even be able to make it to parliament. Thus, the fact that they announced that they would leave the coalition within a month appears more of a negotiating tactic than anything else.
As for the Socialists, they too are wary of what the future holds. Within the party there have been some noises for a change of course; a group calling itself the "Third Wave" are looking to reinvent the Socialists party so that it returns more to its socialist roots rather than being what many regard now as the party of bankers, multi-millionaires, and former communists who have secured for themselves a safe and cushy position. Without a doubt they will use the next few weeks to somehow seek a compromise with their coalition partner if possible.
On the other hand, the rift may be so wide that the two sides will not be able to find a compromise. In this case, there are still several options open to the Gyurcsany government. The most obvious is to stay in power as a minority government. In fact, many feel that this will be the ultimate outcome and have therefore been speculating on what this would mean for the country.
A minority government in Hungary is actually nothing new. There have already been two minority governments since the fall of communism, albeit these only lasted for a short while as the next election wasn't that far off. The first was in 1992 with the conservative coalition headed by the MDF; the second was in 2001 during the last year of the FIDESZ government.
Although the Gyurcsany government may end up as a minority government, it may not prove that hard to stay in power at least until the next general election slated for 2010. The ruling Socialists are only 6 votes short, thus it wouldn't be that difficult to secure that many votes from either the Liberals or the MDF. As many are unprepared and not in a good position yet for a new election, the desire by some to buy a little time may be enough to keep the government going for the rest of its term.
As for the main opposition, however, they are already preparing themselves for government. Their popularity in the polls is at an all-time high, and the disarray among their opponents makes them feel confident that it's only a matter of time before the Gyurcsany government actually falls. On the other hand, considering the animosity on the left that exists toward the leader of the FIDESZ, Viktor Orban, there is a good chance that many will adopt an "anybody but Orban" strategy and thus make sure the present government stays in place.
Finally, it can't be discounted that mid-term elections will be called, and that Hungarians might find themselves going to the polls to elect a new government by the end of the year. Indeed, some conspiracy theories maintain that this was Gyurcsany's plan all along. Thanks to a golden parachute which he secured by quickly signing the South Stream deal with Russia a few weeks ago, he is preparing to leave his comrades in the lurch while he jumps to safety. The South Stream project, a natural gas pipeline which will run through Bulgaria, Serbia and Hungary to Austria and operated by Gazprom, is seen as a rival to the Nabucco pipeline, a planned natural gas pipeline supported by the EU that will transport natural gas from Turkey to Austria via Bulgaria, Romania, and Hungary. Some contend that Gyurcsany was offered an executive position on the South Stream project by Gazprom; hence his sudden trip to Moscow a few weeks ago to sign the deal.
Hungary on the brink of insolvency
Regardless of what happens in the next few weeks, there is no denying that Hungary now finds itself in a serious crisis, much like that of 1989 which led to the fall of the communist regime. The troubles now facing the country isn't merely one of politics, but also of economics. Indeed, it's the economic crisis that the country is in which has precipitated the political crisis. Many experts have warned that the country is teetering on the brink of insolvency as it is unable to cope with its mounting national debt; this is situation is compounded by the enigma of rising personal debt as well.
Admittedly, the user fees introduced by the government and rejected by the population in the referendum was a vain attempt to address this situation. The problem, however, was that it was done in an unfair and underhanded manner. Moreover, most people feel that while they are being squeezed by government austerity measures, large companies and multinational corporations are getting away without paying their proper share. Hence, unless a government in Hungary has the courage to start taxing large corporations while giving space to small and medium sized enterprises to grow, then Hungary's fiscal problems may turn out to be insurmountable.
Given the dire economic state that the country is in, it may actually turn out to be in the interest of the ruling coalition to have the main opposition take over the reigns of power at this point in time so that they end up holding the bag when the country goes bankrupt. In fact, this can even be done without a new election as the FIDESZ has almost the same number of seats in parliament as the Socialists. The only question is whether or not they would be able to get enough support from renegade members of the MDF.
For its part, the FIDESZ has stated that it's fully aware of the dire economic situation that the country is in at the moment. Still, they feel confident and are both ready and willing to take over the reigns of power. Yet, the FIDESZ should careful for what they wish for -- they might get it in the end.