The events of recent weeks have not yet created an alloy strong enough to merge all Hungarian opposition parties. However, there has been a definite breakthrough in the surprisingly-effective, experimental political system, which leads to the conclusion that it will be increasingly difficult for Orbán to keep pretending Hungary is a democracy.

There has been an important change in Hungary, protests that began on December 12 have been regularly held throughout the country. The demonstration in Budapest has finally united the opposition, trade unions and the civil society. These three groups have so far not been able to establish strategic cooperation. Amazingly though, the government has helped them in their endeavours.

The main reason for the protests is a new law – referred to as the “slave law” – which gives employers the opportunity to increase the permissible number of overtime an employee can be required to work from 250 to 400 per year (ten additional full-time weeks), and at the same time extends the time period for payment to the employees for this work up to three years.

Moreover, the law was passed in violation of the parliamentary rules and was quickly signed by President Janos Ader.

Viktor Orbán

To understand what led Hungarian legislators to pass this extremely unpopular law requires a look at their economy.

The recent economic growth of 5% gives Hungary the chance keep up with their partners in the Visegrad Group, but not the Western economies of the EU.

For years, the region’s economies have grown giving Visegrad citizens a chance of prosperity. However, the Hungarian GDP per capita has not changed and is already lower than that of Poland. It may even be lower than Slovakia’s.

In order to maintain current living standards, Hungarians must find a new model to follow. Already today, the labour market is shrinking by 1% per year; the society is ageing, and at the same time the traditional sources of labour migration (Romanian and Ukrainian) are running out because those countries are facing similar demographic challenges. In addition, young people are increasingly opting to move abroad and work in the more developed economies in the west.

In the current economic climate, these trends have resulted in one of the lowest unemployment rates in Europe, 3.7%. If Hungary does not find a way to magically increase productivity, it will have to reduce production.

Meanwhile, the same situation has put pressure on wages; indeed, the earnings of Hungarians are rising significantly above the inflation rate. This will soon affect the decisions of investors regarding the location of factories whose profitability was related to a low-qualified and poorly paid group of employees.

There is situational irony in fact that Viktor Orbán does not want migrants from the south partly to protect jobs which have been provided by the very same investors who might soon find it tempting to move their factories to Africa to cut on labour costs.

A long time coming

At this point, it is worth looking at the political and economic promises of Viktor Orbán.

In the beginning of his career, Orbán was associated with the proposal to build up a middle class. This was a promise of upward mobility for the lower classes and importantly equal legal standards for the richest.

He began by building civic clubs based on the belief that economic entrepreneurship should fund a strong liberal-conservative party of reforms. However, analysing the sources of his earlier political defeats before 2010, he decided that his future power must heavily rely on the lower class constituency.

This is how the political life of the Hungarian Prime Minister was born. From the myth of improving the situation of the middle class, he has kept taxes low, which then entails a lack of financing for significant investment projects by the state.

Simultaneously, the people have been fed with an anti-immigrant rhetoric, which has been used as a remedy for what many have felt is a lack of dignity – it is worth going to the Hungarian countryside to see how poorly Orbán’s most faithful voters live.

In the end, the most important group responsible for retaining Fidesz in power turned out to be the higher class. Those were initially investors and eventually also new oligarchs, Hungarians who have built their wealth from public sources because of their allegiance to the prime minister.

Lőrinc Mészáros

This group has been building its wealth at an astounding speed. A case in point, Lőrinc Mészáros – the former mayor of Felcsút, the prime minister’s hometown – has seen faster economic growth of his companies over the last 10 years than Facebook. In December 2018, Forbes has declared him already the richest man in the country.

This class of Fidesz “clients” have offered the most concessions to the government, which in turn binds the interests of the authorities and the rich more and more. As the old liberal conservative Lord Acton used to say – “Power tends to corrupt and absolute power corrupts absolutely.”

Crisis spinning out of control

Importantly, in tandem with the “slave law”, a law establishing administrative courts was adopted. These courts will take over all matters relating to irregularities, including corruption, in state offices.

Both the loud and considerable obstruction by parliamentarians and the reaction on city streets was predictable. But the question is why Viktor Orbán decided to take this step now.

It is widely believed that the least popular reforms should be implemented during the first hundred days of government.

Last April, Fidesz won a third term as the leading party in government, enjoying nearly 50% support from the electorate which assured itself another constitutional majority in the parliament. This essentially means they have near absolute power when it comes to law-making, including making amendments to the constitution.

Noteworthy, this is one of the factors which distinguishes PiS from Fidesz – the Hungarians have, so far, dismantled the democratic system of law in a manner consistent with the rules and with the legitimacy of the overwhelming majority of votes.

From Twitter

On the one hand, introducing controversial changes to the legal system just before Christmas plays a trick on democratic legitimacy. Winter effectively limits the risk of protests, and government critics must compete with high-budget advertising campaigns in the media during the pre-Christmas period. This is why autocratic leaders often choose this period for introducing understandably unpopular laws.

But this time Viktor Orbán miscalculated. Hoping for a quick legislative operation his method backfired.

Moreover, by letting the opposition MPs be beaten by security guards on public television or by arresting some leading demonstrators, the Hungarian prime minister has given poignant and flagrant examples of his autocratic rule. Besides, during his recent numerous visits to the east, he publicly attributed to Hungary the “Asian” identity, implicitly meaning non-democratic.

Orbán’s worst enemy, himself

Even if he tried to withdraw now from the obviously unpopular regulations, he still would be tied to the interests of investors who have clearly demanded a guarantee that their investments will remain profitable. Otherwise, the factories – many of which are German-owned – will close their doors and sail over the Danube to look for better opportunities in cheaper countries.

In order to visualise the trap Orbán has made for himself, it is worth paying attention to the narrative that the power camp built around this matter. Peaceful demonstrators were referred to as aggressive troublemakers spurred on by foreign forces seeking to bring waves of migrants to Hungary.

All in all, investors would have nothing against a potential surge of new labourers if the migrants could prove to be skilled or able to be trained.

Orbán, however, knows that his popularity is already contingent on a perpetual fear campaign which has been so successful that half of the country has been made to believe nearly the entire population of Africa dreams of coming to Hungary.

In fact, nothing could be further from the truth; due to the lack of social protection and low wages, former migrants treated Hungary only as a stopping point on their way to the west.

This trap, therefore, concerns not only the prime minister, but the whole country which he has taken hostage. Bluntly, where do the Hungarians think they are heading?

The ways ahead

This question can only be answered in the alternative. In a report published less than three months ago by Visegrad/Insight and the German Marshall Fund of the United States, several dozen analysts, innovators and journalists from the region – many specifically from Hungary – outlined five scenarios of political events for our region and two of those highlight events close to the current dynamics.

The first one assumes that the Prime Minister of Hungary may decide to leave the EU because he doesn’t see any chance to improve his economic and political situation in the legal framework of the European Union.

In 2018, for the first time, the EU parliament voted to pursue disciplinary actions against Hungary over their alleged breaches to the rule of law and core European values. This vote may have very well killed Orbán’s dreams of climbing higher up the political ladder within the union.

What’s more, the next EU budget may not allow for many (if any) greedy morsels for the elite gathered around Orbán. All the more, the Hungarian exit – while staying within the customs union and allowing for the continued free movement of people – can be no less an attractive form of economic colonisation.

The second scenario that can take place is a generational rebellion.

In the pictures from the demonstrations, the faces of the young clearly stand out. They know that they are fighting their future, and meanwhile, they are being ruled by the oldest political group, which basically just wants to preserve their own privileges and prosperity.

Fidesz has long since abandoned its rebellious moniker of the “alliance of young democrats” and has become a professional recruiter for politicians of well-educated conformists.

On the political stage, there is room for a new generation and time will show whether the latest protests will help in such a change. For now, it seems that it is still as idealistic as the dreams of the opposition in the 1980s.

 

This article is part of the #DemocraCE project series run by Visegrad/Insight and the Res Publica Foundation in cooperation with the National Endowment for Democracy (NED) as well as editors of leading newspapers across Central Europe. The original was published in Polish on Polityka.pl and can be found here.

Editor-in-chief of Visegrad/Insight and chairman of the Res Publica Foundation


Report

Over the past several years, it has become ever more apparent that the post-Cold War era of democratic reform, socio-economic development and Western integration in Central Europe is coming to an end. Five scenarios for 2025 map possible futures for the region and encourage a debate on the strategic directions.

Visegrad Insight is published by the Res Publica Foundation. This special edition has been prepared in cooperation with the German Marshall Fund of the United States.

Download the report in PDF