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Hungarian ambivalence

Keno Verseck / db
April 23, 2014

Hungarian Prime Minister Viktor Orban has made no secret of his critical attitude toward the EU. But the conservative politician won't dare risk an open split between Brussels and Budapest.

Viktor Orban
Image: picture-alliance/dpa

When the European People's Party (EEP) held its congress for the European Elections in early March, Hungary's participating head of state Viktor Orban appeared to be a supportive European.

Orban congratulated EU Commission President Jose Manuel Barroso on the euro bailout und urged Europe to defend its democratic values in the face of the Crimea crisis.

A week later, Orban stood before thousands of supporters in Budapest and held a completely different speech. Hungary, he told the crowd, is fighting enemies far bigger and more powerful than the country itself - a reference to the EU headquarters in Brussels. His government, he added, needs to protect Hungarian families from "profiteers, monopolies, cartels and imperial bureaucrats" - the latter his term for EU Commissioners and officials.

Nationalist tirade

Such public appearances are typical for Orban who likes to come across as moderate and pro-European when abroad but changes tack on the domestic stage. Ever since he and the ruling Fidesz party won a two-thirds majority in parliamentary elections in April 2010, both have increasingly distanced themselves rhetorically from Europe and the EU.

According to Hungarian philosopher Gaspar Miklos Tamas, Hungary has a new official state ideology: he calls it "a mixture of euro-skeptic nationalism and ethnicism."

crowds with flags National Holiday in Hungary
Hungarians celebrate Revolution Day on March 15Image: Reuters

In its 2014 election campaign, Fidesz focused on the cost of utilities in Hungary, where prices for electricity, gas, water and waste disposal are comparatively high. Last year, the government lowered prices twice for utilities by about 10 percent, and again in February 2014 - clearly a gift to the electorate aimed at boosting the ruling party's popularity. The move went hand in hand with nationalist rhetoric aimed at foreign energy corporations and the EU, which is currently looking into whether the price cuts breach EU laws.

The scapegoat

Hungary's hefty value-added tax of 27 percent and state monopolies in some sectors are to blame for the high cost of energy and municipal services, according to experts. But Orban and Fidesz try to make the public believe that foreign companies are "raking in unjustifiable additional profits" at the expense of Hungarian consumers - with the help of the EU.

Despite the government's anti-EU rhetoric, Hungary has no current plans to exit the bloc.

Fidesz politicians and party-friendly businesspeople benefit greatly from EU funds and subsidies for the agricultural sector, which is a huge economic factor in crisis-stricken Hungary.

Paks nuclear plant
Russia is helping Hungary upgrade the Paks nuclear plantImage: picture-alliance/dpa

Is Moscow an alternative?

At the same time, Hungary is looking eastward to expand business ties. In January, Orban traveled to Moscow, where he signed a deal with Russian President Vladimir Putin for a loan worth 10 billion euros ($13.8 billion) to expand Hungary's nuclear power plant in Paks using Russian technology.

Just a few weeks later, Orban traveled to Beijing to promote more Chinese investments in Hungry, promising the country would not interfere in Chinese domestic issues.

"Orban's turn to the East has consequences for the EU," says Dariusz Kalan, a political scientist with the Polish Institute of International Affairs (PISM). China and Russia, he argues, are taking advantage of Budapest's approach to continue its strategy of weakening Brussels with bilateral negotiations with EU states.

Orban is particularly keen to strengthen the euro-skeptics, pleading for more autonomy for individual member states and for a "Europe of Nations" in which conservative values once again play a larger role. The Hungarian leader views the EU today as disoriented

Lucrative business for the West

Most Hungarians don't fully subscribe to the anti-European tendencies voiced by Orban and his ruling majority. Opinion polls show that while an increasing number of Hungarians have developed a negative view of Europe and the EU over the past few years, their euro-pessimism is still below the EU average.

Hungry's growing pessimism toward the EU may stem from the feeling that EU accession was fraught with many mistakes. Not only did access to EU funds prove more difficult than expected, but large amounts also flowed right back to western consulting agencies and suppliers.

engineer at gas pipeline
The government helped cut household utility billsImage: AP

EU expansion in conjunction with open, liberalized markets proved a lucrative business for western European companies. But for countries like Hungary, it caused havoc in numerous sectors. Many small farmery and produce growers, for instance, didn't survive the transition.

On the other hand, Hungary owes a good deal to the economic expansion, according to economist Miklos Koren. "The multinational companies in Hungary are more productive, they grow faster, and so do their wages and the number of people they employ," he told Hungary's index.hu news portal. "They pay the most taxes, and the regions they've settled in are on the rise."