Nationalist Nonsense
In Hungary increased populist rhetoric has betrayed the extent of the country's nationalist shift
It has been a shaky start for the new Hungarian government. Even before being sworn in, leading officials of the victorious FIDESZ party, including the Prime Minister elect Victor Orban, had begun to portray an image of getting down to business quickly and decisively. Yet the populist manner in which the FIDESZ has conducted itself in the interim period has revealed several inconsistencies as well as clumsy blunders. Among them was Orban's implicit warning that the head of the Hungarian National Bank (MNB), Andras Simor, would have to go. Observers as well as Simor himself immediately put a damper to Orban's propaganda offensive by noting that the head of the MNB is protected by the constitution and independent of government influence. Likewise, it was noted that Brussels takes the issue of central bank independence very seriously.
Although having suffered a brief and unexpected setback in its offensive against Simor, the FIDESZ will no doubt attempt to link the head of the MNB and the scandal over his offshore bank account to one of the myriad corruption probes underway. If such a link can't be made, however, then it's almost certain that Simor will somehow become the center of a new corruption scandal.
The present struggle between the new government and the MB aside, the issue of corruption over the past several months has been a godsend for the FIDESZ. Not only had it assured Orban a massive electoral victory and complete control of parliament, but by subsequently adopting an anti-corruption crusade as an integral part of government policy, an outlet has been established for people to vent their anger and frustration away from the new government and its policies. It also gives the FIDESZ a weapon with which to use against its arch rival, the Socialists.
While the merits of an anti-corruption crusade are quite obvious, there is nevertheless a danger that it could lead in the opposite direction. Experts caution that political campaigns which focus on eliminating corruption frequently end up having a negative impact on good governance. Indeed, a populist misuse of anti-corruption policy could threaten to dent citizen and investor confidence even more. This is because a single-minded focus on corruption often precludes more substantive political programs.
Bulgaria provides a perfect example of this. For the past fifteen years international community and local awareness campaigns to root out corruption have produced few results. Expensive media initiatives over-estimated the ability of the general public and civic organizations to act against venal officials and politicians. Consequently, corruption is frequently used to explain all of society's ills; meanwhile politicians, businessmen and the media regularly accuse their opponents of it in pursuit of various private agendas. As a result, the international-led effort backfired as the public became bored by the endless campaigning. The ineffectiveness of these campaigns, in turn, further undermined people's limited trust in key institutions.
This same process can be seen unfolding in Hungary. Not only has corruption undermined trust in key institutions, but anti-corruption campaigns have become a weapon in the country's internal political debates. Subsequently, this has led public confidence in state institutions to fall further still. In fact, confidence in state institutions is so low that corruption is now perceived by many to be the country's third most pressing problem, after unemployment and low incomes.
"Anti-Multi" Backlash
This situation looks set to only worsen. The continuous use of the word "corruption" has virtually deprived it of all meaning, making the fight against it increasingly banal. To make matters worse, a large segment of the public has become increasingly indifferent to it: everyone knows that corruption is widespread but few dare to say so or do anything about it, knowing that it could jeopardize any chance of possibly benefiting from it. The enigma of debt queues among small and medium enterprises (SMEs), for instance, which affect a large part of the Hungarian economy, is a case in point.
For many small firms, delays by their clients in paying for work that has already been done, or for goods already supplied, cause massive cash-flow problems. When customers don't pay on time, SMEs find it impossible to pay staff and suppliers, as well as overhead costs like rent or electricity. In Hungary, a majority of late payments to small firms are deliberate. Moreover, these late payers are for the most part large firms or public authorities. In effect, because of these debt queues SMEs in Hungary end up providing their customers with interest-free credit.
While the FIDESZ and its supporters focus primarily on corruption scandals which have tainted their political rivals, what they have failed to address is the fact that it takes at least two in order to be corrupt. The crooked privatization deals of the past as well as shady EU financing agreements of the present mostly involve foreign parties, many of them multinational corporations as well as foreign governments, including fellow member states such France and Germany.1 Yet these partners in crime for the most part escape the glare of the anti-corruption spotlight, which calls into question how serious the commitment to tackling corruption really is.
Indeed, giant multinationals are for the most part the major contributors to the crippling debt queue enigma in Hungary. SMEs are terrorized by the fear that they won't be able to secure future contracts from these companies, so many suffer in silence despite the fact that EU legislation exists in where penalty interest should automatically be imposed whenever payments are delayed beyond 30 days.
As a result of all this, it should come as no surprise that multinationals have become the focus recently of people's anger and frustration in wake of the financial crisis. This "anti-multi" backlash in large part explains the success of the far-right JOBBIK in Hungary. Realizing as much, the FIDESZ has adopted a similar, yet much more moderate form, of this anti-multi rhetoric. In fact, the FIDESZ and its supporters now acknowledge that the goulash capitalism of the past twenty years has been unfairly tilted in favor of foreign multinationals, which have received preferential treatment in terms of tax breaks and other incentives while Hungarian companies as well as SMEs were left to struggle on their own in a clearly unlevel playing field. Yet despite such acknowledgments and commitments to end this preferential treatment toward multinationals, little has been said or done on how to correct the errors of the past.
Paradoxically, having taken advantage of the legislative chaos over the past twenty years, multinationals and their supporters also agree that it is now time to nurture true competition into the Hungarian economy. Together with the new government, they seemed to have adopted the position that what has been done can't be undone. This unique and symbiotic relationship between the new government and big business has allowed the FIDESZ to gain supporter from those that previously were wary of the party and its seeming anti-multinational stance.
The problem at this point is that the general public isn't interested in just simply acknowledging the wrongs of the past and then continuing from there. They feel that those who had profited from the goulash capitalism policies of the past two decades and have succeeded in firmly establishing themselves by buying into markets and destroying the local competition shouldn't be allowed to hold on to their ill-gotten gains. Hence, many expect some form of proactive retribution as opposed to a mere passive acknowledgment of past injustices.
This is where some call into question the true intentions of the FIDESZ. While adopting the rhetoric and the image which has secured it massive support from the right as well as the disillusioned left, the new government appears to be intent on continuing the same basic policies of the past. The only difference between then and now is that the point of emphasis is a little different. While previous governments focused on rapid privatization and "reforming" the economy and political institutions in order to make them receptive to globalization and neo-liberalism, the new government is primarily focused on consolidation. Hence, when introducing his government's program to parliament earlier this week Orban described this shift as "the start of a new era". Not surprisingly, many big businesses are supportive of this "new direction" so as to secure the positions they had succeeded in carving out for themselves.
Thus, despite Orban's tough talk in the past that "there is life outside of Europe" and that Hungary will not bend to IMF demands, it's quite clear that many of the so-called "reforms" which people have been opposed to – smaller government, a simplified tax regime, the foreign ownership of land, etc. – is chiefly for the benefit of big business, often to the detriment of the general public at large. In this respect, the success of the FIDESZ has been to dupe its supporters into accepting what they don't really want. Yet because this package has been carefully wrapped in populist rhetoric, many are unaware of what they have bought themselves into.
Along these lines, it's quite clear that the FIDESZ has been playing the nationalist card heavily in order to divert attention away from its more controversial objectives. Most of these are in the realm of economic policy. In effect, the FIDESZ plans to force through IMF dictated policies that previous governments have been unable or unwilling to implement because of the popular backlash it would cause. A prime example of this is the idea of a flat tax, to which Orban cryptically referred to as reforming the tax system so that it can "fit on a beer coaster".
Dual Citizenship: Much Ado about Nothing
Aside from corruption, perhaps the most contentious issue brought up by the FIDESZ as a diversion tactic is that of dual citizenship. The notion of dual citizenship was a vague campaign promise of sorts while the party was in opposition; thus when the time came to put words into action, it quickly became obvious that there was no clear concept on the part of the FIDESZ as to what it really meant by dual citizenship.
Immediately following their election victory Tibor Navracsics, the leader of the FIDESZ faction in parliament, asserted that dual citizenship will only be granted to Hungarians living beyond the country's border if they possess a residency permit. A few days later Janos Martonyi, the new foreign minister, contradicted Navracsics and claimed that dual citizenship will be open to everyone, but the right to vote will not apply. This position was then superseded a few days later in where it was claimed that the right to vote will also apply, albeit it's still uncertain as to how and in what context.
Given the uncertain nature of what the new government hopes to achieve with its dual citizenship policy, pundits for the FIDESZ have begun to backtrack from earlier statements and positions. No longer is the issue seen as something that would be granted to Hungarians living in neighboring countries automatically and en masse. In fact, some have begun to even re-evaluate the events of December 5, 2004, when the World Federation of Hungarians had sponsored a referendum that would grant dual citizenship to Hungarians living in neighboring countries. Contrary to right-wing propaganda, which put the blame for the defeated referendum on the activities of the left-wing government headed by Ferenc Gyurcsany, the referendum failed not because those against dual citizenship were in the majority (in fact, more had voted in favor of dual citizenship), but because voter turnout was so low that the results were invalid. In other words, the vast majority of Hungarians didn't care about the issue one way or the other.
Oddly enough, many right-wing pundits now regard the whole episode as premature and reckless. Some have gone further to criticize the World Federation of Hungarians for launching the referendum in the first place. Moreover, the World Federation of Hungarians itself has come under attack by the very same who had supposedly been its erstwhile supporters. What makes this all the more incomprehensible is that those who now consider the referendum of 2004 to be a mistake were at the time the same ones who had campaigned hardest for it to succeed.
Aside from playing around with an ill-defined concept in order to win right-wing support, the new government appears to have used the issue in order to provoke its neighbors. It's hard not to believe that Victor Orban and Robert Fico (the Prime Minister of Slovakia) didn't sit down for a coffee somewhere and agreed to use dual citizenship for their mutual benefit; the political theater which has since unfolded is more than a little absurd.
What makes this whole issue all the more puzzling is that while the new Hungarian government is determined at all cost to allow dual citizenship for Hungarians living in Slovakia (who don't really need it) despite vociferous protests from Bratislava, at the same time the new foreign minister merely acknowledged that it's not possible to grant dual citizenship to Hungarians living in the Ukraine (who are in need of it more than anyone else) given the position of the government in Kiev, and that Hungary respects this position. Neither has any mention been made of Austria, which also doesn't allow for dual citizenship.
In many ways, the issue of dual citizenship is a non-issue. Dual citizenship has always existed in those countries which the new government has focused its attention on (Slovakia, Romania, and Serbia) and in places where it has never existed (such as the Ukraine and Austria) it won't be forthcoming. In other words, not much will change. What is more, within the context of the European Union, and in particular the Shengen Accords, dual citizenship within Europe nowadays is almost meaningless.
Populism and Nationalism
Not only this, for nationalists within Hungary dual citizenship threatens to do more harm than good as it makes it much easier for Hungarians living beyond the country's borders to resettle in Hungary. The rationale behind dual citizenship for Hungarians living beyond the country's borders is that it would help to symbolically rectify the injustices wrought by the Treaty of Trianon in 1920. The problem is that for the past twenty years, as it has become increasingly easier for people from the region to travel, many Hungarians living in Slovakia, Romania, and Serbia have already moved to Hungary, altering the ethnic balance in the process. Towns and villages which used to be dominated by the Hungarian minority in these countries have, in effect, become dominated by the majority population. Ironically, what wars and ethnic cleansing failed to do in the past is now being accomplished through globalization and economic migration in the present.
The issue of dual citizenship threatens to simply accelerate this process. The new Hungarian government, meanwhile, maintains that it only wants to make the process easier for those who apply. It emphasizes that those who receive dual citizenship won't automatically have access to services as those who live within the country. Still, it's hard to see how this can be effectively monitored.
While the new Hungarian government has used the issue of dual citizenship to bolster its populist image, in Slovakia the incumbent government has used it to fan the flames of nationalism in order to win votes ahead of the general election. Nationalist Slovaks see dual citizenship for Hungarians as simply another trick by Budapest to slowly but surely reassert its claim over territories that it had lost at the end of the First World War. All this plays into the hands of the far-right SNS, which has made anti-Hungarian and anti-gypsy rhetoric the focal point of its campaign,
In the end, nationalists in Hungary may feel that they are in the driver's seat having given the FIDESZ a two-thirds majority in parliament. Yet the populism of the new government appears to merely act as a cover for the lack of detail and direction in its policies. Desperate to gain power at any cost, promises and statements were recklessly made in the past without giving much thought to ultimately fulfilling them. Within the next few months many will soon find out whether they backed the right horse or not.