Corruption, Inequality and Social Justice, Information & Communication, Populism, Racism

A ‘climate of fear’: Hungary, inside a dying democracy propped up by the EU

May 30 2019

By Peter Foster* – The Telegraph

When the Hungarian branch of the Union of European Federalists decided to meet and discuss the new challenges facing EU democracy, its secretary-general was expecting a spirited debate.

Eszter Nagy invited the main political groupings, including Hungary’s ruling Fidesz party, and booked a room at Budapest’s trendy Kossuth Klub, close to the national museum and big enough to hold a large audience.

It was only after Ms Nagy went to visit the venue to check on the final arrangements a few days before the event – Fidesz had declined their invitation – that the problems began.

It began with an apologetic phone call from the Kossuth Klub management. “Sorry,” Ms Nagy recalls the manager saying, “Because of the unbalanced political representation [since Fidesz declined to participate] we cannot host the event.”

She had the same problem with the nearby Harmonia Palace conference centre and only with 24 hours to spare did Ms Nagy find a host, a private German-language institution, that felt confident enough to hold a “political event”.

Ms Nagy cannot be certain why the first two venues refused her, but in the Hungary of 2019 she believes her organisation’s experience fits a broader pattern in the gradual decay of Hungary’s democracy.

“It is the general climate of fear now,” says Ms Nagy, “it’s always impossible to know if someone is responding to a direct intervention from Fidesz, or just self-censoring to avoid getting into trouble. But it comes down to the same thing.”

The Telegraph spoke to four separate political and civil groups in Hungary with similar experiences of struggling to book rooms for political events, two of whom wished to remain anonymous.

The phenomenon is even worse in rural areas and smaller towns, complains Katalin Cseh, a candidate for Hungary’s new liberal Momentum party, who was elected as a new MEP last week.

The party says it had similar problems in a hotel in Szolnok, a town of 70,000 in central Hungary where Fidesz controls 13 of 18 seats in the local council, handing it a near-total sway over licensing, jobs and business.

“The problem is in the small town the local mayor can control everything – jobs, tax, operating licences – and they are loyal to Fidesz,” she says in Momentum’s offices in an apartment block in Budapest. “No-one dares upset them.”

Even in the city, the government wields influence, says Ms Cseh, recalling that one of Momentum’s most committed supporters, who managed a venue, eventually had to ask to stop hosting events.

“He came to us and said, ‘I’m sorry, I can’t host any more events, the business is suffering too much’. After every event there was some form of government control – a health and safety inspection, a labour control, a tax audit. “That’s what the government can do,” she said.

State capture

Perhaps this is just the predictable carping of opposition and civil society groups, but the lack of a level playing field is part of a growing chorus of complaints about the dwindling of democracy in Hungary.

Viktor Orban, the country’s pugnacious prime minister, openly delights in his so-called ‘illiberal democracy’ which defines itself in opposition to the liberal western establishment which he argues unfairly predominates in Brussels.

But “illiberal democracy”, as Mr Orban explained in a recent interview in Austria’s Kleine Zeitung, is not about crushing democracy itself, but preserving a Christian Democratic Europe that prioritises family, traditional marriage and cultural homogeneity.

It is a vision that resonates naturally in Hungary, but after winning a super-majority in the Hungarian parliament in 2018, Mr Orban’s ruling Fidesz party seems less and less prepared to take chances on the democratic process.

After 2010, changes to the electoral system to make it much closer to a ‘first past the post system’ further entrenched Fidesz’s power and increased the value of having a fractured opposition.

The rise of new parties like Momentum, which attract young people who want an alternative to traditional and often corrupt opposition parties, ironically may serve to bolster Fidesz’s electoral position, not challenge it.

Still, despite its apparently impregnable position, since 2018 Fidesz stands accused of taking an increasingly brazen approach to capturing Hungary’s media and civil society via a network of oligarchical business interests devoted to their own enrichment and the entrenchment of Mr Orban’s power.

Last September, the European Parliament voted to bring Article 7 punishment proceedings against Hungary for breaching the EU’s rule of law requirements – a move dismissed by the country’s foreign minister as ‘petty revenge’ for the country’s anti-immigrant rhetoric.

But for all the bluster, the criticism keeps coming. This year the US-based Freedom House downgraded Hungary to only “partly free”, making it the first EU country to be placed in that category, citing issues over corruption, media and political freedoms.

When Mr Orban visited the White House this month, he suffered the embarrassment of a cross-party group of US senators writing an open letter warning of the “downward democratic trajectory” in Hungary.

They noted that even conservative US think-tanks, such as the American Enterprise Institute, were warning that Hungary had experienced a “steady corrosion” in its democratic functions.

In Europe’s pay

Regional analysts say this does not mean that Hungary is now a ‘dictatorship’ or a ‘totalitarian state’, as some more excitable commentators on the left have branded it, but that Mr Orban and his Fidesz party are taking control in a way reminiscent of Vladimir Putin in Russia in the 1990s.

Fidesz’s ability to capture the economic and social apparatus of the Hungarian state is partly due to the unique property settlement in Hungary that followed the Soviet era, according Botond Feledy, of the CEID think-tank in Budapest.

Unlike in other former Soviet satellites, such as Slovakia or Poland, the state compensated the property-owning classes in cash and not by returning the property to its erstwhile owners, says Mr Feledy, leaving citizens much more dependent on the state.

“It has left the middle class with no material foundation and much more dependent on government jobs and services,” he says.

This is compounded by the influx of EU structural funds – some €25 billion (£21.3 billion) in the 2014-2020 budget period – which international watchdogs like Transparency International say are systematically skimmed by the network of rich and powerful around Mr Orban.

The funds also help to keep Hungary’s GDP growth humming along at between 2-4 per cent since 2013, with real wage growth of 8-10 per cent further helping to cement Mr Orban’s popularity.

The net €3bn per year flowing to Hungary from the EU equates to some 2.5 per cent of Hungarian GDP – a figure that is set to shrink by up to half in the next budget cycle, which may yet test Mr Orban’s ability to keep the good economic news coming.

But for now, just as oil money enables Vladimir Putin to create a rentier state, regional analysts argue that Mr Orban is achieving similar results thanks to the EU funds which flow into a state apparatus increasingly devoted to maintaining the power of the ruling party.

Opposition groups are therefore calling on Mr Orban to join the European Public Prosecutor’s Office (EPPO), a new agency that will begin anti-corruption investigations into the use of EU funds after 2020, and for the EU to create a mechanism to disburse EU funds away from the clutches of the government.

“There needs to be more direct funding within the EU framework – like Horizon 2020 – which can ensure that contracts are put fairly to open tender. Hungary has one of the poorest records in Europe on this,” says Ms Cseh.

“We have to tie EU funding in with ‘rule of law’ obligations, because the people don’t deserve to be denied funding because of Fidesz corruption.”

Putin’s playbook

Superficially Budapest looks and feels like any other European city, with too much traffic clogging streets lined with coffee bars and bohemian beer-cellars, as well as a vibrant cultural scene and online discussions.

The bulk of the media might be state-owned or controlled by owners loyal to Mr Orban and Fidesz, but voluble dissenting outlets remain, such as Index.hu, Klubrádió and the weekly HVG news magazine, known for its satirical covers mocking the Orban establishment.

Hungary’s opposition political parties are also clearly operating freely – even if they have been hopelessly divided in recent years – with Momentum’s Ms Cseh acknowledging that her party’s modest office is only made possible by the provision of state funding.

But scratch beneath that surface and it is clear that Hungarian democracy and media freedoms are indeed encountering significant new limitations.

Otilia Dhand, the central and eastern EU expert at the Teneo political consultancy, says the Orban-Fidesz tactics are reminiscent of those in Serbia, which was downgraded to ‘partly free’ by Freedom House at the same time as Hungary.

“It is an established tactic, used for example by the President of neighbouring Serbia, to point to critical articles about the government to claim media freedom. It is similar to Russia, where some free media is allowed to channel discontent in a way that can be managed,” she said.

In Hungary the media landscape underwent a seismic shift at the end of last year, with the foundation of the Central European Press and Media Foundation (KESMA), which grouped together 476 assorted media outlets under a single umbrella.

The group, chaired by a former childhood friend of Mr Orban and five pro-Orban journalists and lawyers, contains all 18 of Hungary’s county-based newspapers and was exempted by the Government from media monopoly laws after the government declared it to be of “strategic importance”.

“Fidesz has not captured the opposition just yet – that comes later on in set-ups like this – since in any case at the moment the opposition can’t put forward a credible alternative,” says Ms Dhand.

“But the media is now in almost complete capture by business interests aligned to the ruling party. There are always a couple of independent media, but that’s not a major risk – they are not delivering messages to the core electorate.”

A paid-for Press

This month Reporters Without Borders’ (RSF) ranked Hungary 87th in its World Press Freedom Ranking, compared with 23rd spot when Mr Orban took power in 2010.

The consolidation of media control is also backed by the financial power of the Hungarian government’s advertising spending, which is concentrated in the hands of pro-government media, according to historical analysis by the Mertek Media Monitoring group.

Attila Bátorfy, an investigative journalist who specialises in monitoring media developments in Hungary, estimates that around 50 per cent of all advertising spending in Hungary is either directly or indirectly under the control of the government – but the knock-on impact exceeds even this.

“Fidesz channels enormous amounts of money into pro-government news, which distorts the media market, not just by using state money, but by influencing commercial advertisers also,” he says.

“If you are a retailer, say, and you have a very autocratic regime, and you would like to lobby for your interests, and you have advertising to spend, then advertisers will tend towards supporting pro-government media.”

The frequent Trump-style attacks on the ‘liberal news media’ and ‘fake news’ creates an ambience, Mr Batorfy concludes, where the threat of deeper control for existing independent media is never far away. “It’s a classic chilling mechanism,” he said.

Independent Hungarian journalists now fear that the indirect “chilling effect” is becoming increasingly direct and confrontational.

In April HVG, a news magazine in the mould of The Economist, published a story about the glamorous lives of the wives of prominent Orban government ministers and friendly oligarchs, featuring a cover mock-up of one minister’s wife with rollers in her hair made from banknotes.

For the last 40 years the magazine’s weekly cover has been a feature of the Budapest skyline, displayed on advertising hoardings – but on April 12 the company that controls the hoardings – Mahir Cityposter – ended its contract with HVG without notice.

A few months earlier the billboard company had been acquired by Hungary’s leading oligarch and Orban loyalist L?rinc Mészáros – a former gas-fitter and mayor of Mr Orban’s home village of Felcsút who is now estimated to be worth $1bn by Forbes magazine.

The company reportedly cited a lack of available space needed to fulfil its contractual obligations to HVG, but the magazine’s editor-in-chief believes the true motivation was to suppress criticism of the Orban government.

“This is clearly a new attack on press freedom, a qualified case of censorship,” Ibolya Jakus told The Telegraph via email. “These posters have been on the streets for decades, no matter which government was in power, or who was the owner of Mahir.”

Ironically, Ms Jakus added, the decision had actually boosted magazine circulation after protesters took to the streets carrying poster-sized copies of the HVG cover, but the overall picture for the media in Hungary remains grim.

The combination of the government using public information films to push political messages, the consolidation of media ownership and the politicisation of the advertising market has pushed independent media into what she called “isolated ghettos”.

“It is quite obvious that the Government does not tolerate any other public message in the streets, only its own propaganda,” she added. “Press freedom is in ruins in Hungary these days.” Mahir Cityposter did not return several requests for comment.

The rule of laws

The shifting media landscape is perhaps the most obvious sign of Hungary’s slide down international freedom and corruption rankings – Hungary is now 64 on the 2018 Transparency International ‘Corruption Perceptions Index, compared with 46 in 2012 – but critics argue that the entrenchment of Mr Orban’s ruling Fidesz party extends far beyond the media.

In December the Fidesz supermajority in Hungary’s parliament passed several new laws covering administration, judicial appointments and a new labour code, dubbed the “slave law” since it enables companies to pay over-time up to three years in arrears.

These were billed as reforms and modernisations, but campaigners and opposition groups – who protested vociferously against the new laws – fear they will become instruments of ever-deepening state control.

Among the biggest concern was a new law on Administrative Courts that will allow the creation of a new court system for government business.

The courts, which will manage issues including taxation and elections, according to Reuters news agency, will be overseen directly by the justice minister, who will also have significant powers to appoint judges.

The full force and final shape of the law is still to become clear, but the Helsinki Committee, a civil rights watchdog, said the move was a “serious threat to the rule of law in Hungary and runs counter to values Hungary signed up to when it joined the European Union.”

Demonstrators protesting against recent legislative measures introduced by the government of Hungarian Prime Minister Viktor Orban stand outside Parliament on December 16, 2018Credit: Getty Image Europe

The Hungarian government, which is adept at providing legal cover for its actions, has asked for the opinion of the Venice Commission, a group of constitutional law experts of the human rights body Council of Europe, to report on the new law.

It points out that other EU countries also have administrative courts under the direction of the justice minister – to which critics argue that Hungary under Mr Orban is fast becoming unlike other EU countries, no longer sharing the attachment to “liberty, democracy and respect for human rights and fundamental freedoms and of the rule of law” set out in the Lisbon Treaty.

Such shifts and ‘reforms’ are not black or white.

For example, administrative reforms ostensibly designed to modernise and drive efficiency in Hungary’s civil service, have also raised concerns among senior Hungarian civil servants who say they have watched the relentless politicisation of government service since 2010.

Last year the Telegraph revealed how Hungarian embassies across Europe have been ordered to collect negative stories about immigration in order to support the re-election campaign of Mr Orban’s Fidesz party, which has focussed heavily on the issue since the 2015 migrant crisis.

Two senior Hungarian civil servants who spoke to the Telegraph on strict conditions of anonymity said that reforms to their contract conditions had greatly increased the leverage of their political masters.

They argued that a new contract system which links salaries to individual positions – rather than the years or experience and skills of the individual – had “dramatically increased” the ability of staff to be removed or replaced on the whim of their bosses.

“The atmosphere is worsening,” said one long-serving civil servant, “It’s all done ‘legally’ but everyone feels their salary and job can be changed overnight – and the expectation is of total obedience and not raising unnecessary questions.”

Such relatively subtle changes are very difficult to counter with the blunt instrument of the EU’s Article 7 proceedings, which can in theory suspend the voting rights of an EU member state.

This is the ‘nuclear option’, but in practice it is always blocked by at least one other EU member state that either sympathises with Mr Orban’s autocratic bent or, more broadly, is wary of setting a precedent of allowing Brussels to interfere so dramatically in a nation’s affairs.

EU competition, equality and state aid legislation can, and has, been used to modify obvious or egregious breaches – but as with the politicisation of the Hungary’s advertising market – marking the boundary between illegality and self-censorship or ‘chilling effect’ is extremely difficult.

Others, like Ms Cseh of Hungary’s Momentum party, would like to see Brussels use the leverage of its ‘structural funds’ to force states into ‘good behaviour’, but there is no legal basis for this and cutting off funds will stoke resentment and hurt the ordinary voters who rely on them.

And so despite the general opprobrium of NGOs, the European Parliament and the international media, and even the threat of US sanctions and EU corruption enquiries, there is little sign or expectation that Mr Orban or his Fidesz party will relinquish their grip on power any time soon.

With growing control over the state, the media and the economy, Fidesz looks set to continue to steadily deepen its links with an electorate that – outside Hungary’s metros – is anyway instinctively sympathetic to Mr Orban’s vision of protecting a traditional, culturally homogenous, Christian Europe.

“There is that suffocating feeling that you cannot win,” says Eszter Nagy of the Union of European Federalists with a shrug of resignation. “The international media can write about it, but that doesn’t stop you getting fired if Fidesz wants to find a reason. All you can do is stay in line or sooner or later you’ll lose out. They always win.”

Additional reporting Balazs Csekö

—————–

*The Telegraph Europe Editor

site admin