The Future of Europe. Perspectives from Hungary
This article documents the political discussions in Hungary around the topic of European integration and perceptions of the economic and social crises in Europe. In doing so, it points to the main political actors in Hungary and their stances on the European Union, as well as on the Green positions and proposals for getting out of the crisis. This article on Hungary is the first in a series of background country positions on the future of Europe, especially written for GEF’s future of EU web- dossier. The article was written by Kristóf Szombati (Heinrich Boell Stiftung, Prague Office) starting from discussions that took place in the expert round table debates “Ways Out of the Crisis: The Future of European Democracy”. The debate was organised on October 5th 2012 in Budapest, by the Heinrich Boell Stiftung, the Green European Foundation, Ecopolis and the School of Public Policy of the Central European University.
1. Background and Information
levels of public debt (that already reached 67% in 20072). The population’s vulnerability was connected to foreign currency (mostly CHF) loans3. The financial crisis of 2008 and the ensuing global economic crisis severely affected all three sectors. The depreciating forint drove the debt obligations of the 1 million citizens holding foreign loans up and also impaired the positions of banks, prompting the latter to basically suspend lending activities. Strong exposure to the contraction of export markets (the ratio of companies participating in international production systems is 40%, the contribution of these companies to export is 75%) hit manufacturing and resulted in GDP dropping by 6.3% in 2009. The strongly indebted state was not only incapable of introducing counter-cyclical policies, but was forced to ask for an IMF-bailout in 2008. This is why economists have classified Hungary as one of the hardest-hit European countries characterized by bleak economic prospects and strong external vulnerability. While the new right-wing government that came to power in 2010 has so far – albeit narrowly – evaded insolvency, its “unorthodox” economic policies (introduced with the aim of preserving jobs4 and incomes and cloaking austerity measures) appear to have jeopardized the prospects of economic recovery until at least 2014. Moreover, these safeguard policies have only helped the middle-class, meaning that their price has largely been paid by the working and non-working poor whose incomes and social rights have been significantly cut and curtailed by the government5. As a result, the gap between the middle class and the lower classes has further widened, spawning deep frustration and apathy at the bottom of society.
a) Impact of the financial and economic crisis on Hungary Due to long-standing structural problems and irresponsible policy decisions the global financial and economic crisis struck down upon an already weakened economy and a vulnerable state and population. The austerity measures introduced by Ferenc Gyurcsány’s Socialist government in 2006 (with the aim of reducing the budget deficit to 3% by 2008) led to the dramatic slowing of the economy, with GDP-growth falling from app. 4% to 1% in 20071 and close to 0% in 2008. The state’s vulnerability was mostly connected to increasing
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http://www.indexmundi.com/g/g.aspx?c=hu&v=66
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http://www.indexmundi.com/g/g.aspx?c=hu&v=143 At the end of 2009 housing loans amounted to 15% of GDP, of which 63% were foreign currency based 4 Figures show that the crisis was followed by a modest increase of unemployment, with the ration of jobseekers increasing from 7.3% in 2007 to 10.9% in 2011. The biggest redundancies took place in foreignowned automotive and electronic companies and the mostly Hungarianowned construction sector. 5 The introduction of the flat tax was detrimental to low- income groups. Worst affected were unmarried couples and families with less than 2 children (because they could not take advantage of tax cuts helping larger families). Welfare benefits supposed to help the non- working poor were further decreased and the government introduced the obligation to work (in the form of public works programs), resulting in the stigmatization and further marginalization of the “deep poor”. 3
b) General perceptions of the crisis and the EU in Hungary
pushing significant numbers of middle-class voters into the arms of the opposition.
In the last two years of the last government (2008 – 2010) then opposition Fidesz managed to convince the majority of Hungarian citizens that it was the Socialist “comprador elite” which was responsible for the hugely negative impact of the crisis in Hungary. In fact, the majority of the population still perceives the 8 years of left-wing government as a period of missed chances characterized by ineffective economic policies and massive political corruption.
c) Political standpoints on European integration
However, Fidesz’ inability to revitalize the economy and the institutionalization of corruption have significantly reduced voters’ anti-Socialist sentiment and have forced the right-wing to come up with a new explanation for economic failure. Fidesz has therefore designed a new communication strategy that lays part of the blame on the loosely defined topos of the “West”, which its leaders have begun portraying as underperforming and decadent. Besides this the government has embarked on a rather aggressive anti-IMF campaign, portraying the government as a defender of Hungarian interests against rapacious and immoral foreign capitalists. This propaganda has been echoed in media outlets that are partially or wholly under governmental control, meaning that in the last year there has been a palpable rise in eurosceptic discourse in the public sphere. Since there are no reliable scientific studies analyzing how this discursive shift has affected Hungarians’ opinion of the EU, all we can say is that the already high level of euroscepticism6 has probably not waned. Concerning the factors underpinning anti-EU sentiment quantitative researchers7 revealed that euroscepticism has increasingly risen in the countryside and among citizens detaining lower education and skills. This warrants the assumption the emergent pro- vs. anti-EU political divide is to a large extent based on a class divide separating the winners and losers of Hungary’s transition to capitalism. While this appears to present an obstacle for the political forces campaigning against the government on a pro-European ticket (i.e. it may make it more difficult for them to mobilize lower-class voters), we must also note that the government’s attempt at scapegoating the “West” may actually backfire – e.g. by
Before addressing the issues that were raised and debated at the event in Budapest I would like to give readers an idea of the state of the political debate on European integration in Hungary – a critical issue which was not directly addressed in the discussion. I begin by stating that there are three more or less distinct political standpoints on the issue of further integration: i) an uncompromising anti-EU stance represented by the farright party Jobbik; ii) a status quo stance (generally opposed to further integration, but exhibiting a certain willingness to reach compromise) represented by Fidesz; iii) a pro-integration stance represented by left-of-centre opposition forces: the Socialists, LMP and the newly founded electoral alliance ‘Together 20148. It is worthwhile to note that the content of the prointegration stance has been somewhat altered, although it is difficult to pinpoint exactly how because the party programs are still very much evolving. What we can safely say is that the unconditional pro-integration stance of the liberal party SZDSZ has been replaced on the political spectrum by the more nuanced stance of the greens (LMP), with the latter promoting stronger integration in areas such as environmental and social policy, but also defending the push for more regional autonomy and the safeguard of national sovereignty in budgetary and agricultural policy. The stances of the Socialist Party and Together 2014 remain to be clarified in the future.
2. Participants of the event The “on invitation only” event was attended by approximately 20 participants. Most of them were intellectuals or academics representing the country’s pro-European elite. Speakers were individuals who had worked in the European Union or were representatives of the Hungarian or European parliament.
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A recent study revealed that it was in Hungary that citizens’ assessment of EU membership deteriorated the most pronouncedly between 2001 and 2009. While in 2001 71% of Hungarians believed that EU membership would be beneficial to Hungary, in 2009 only 38% thought the same. 7 http://www.tarsadalomkutatas.hu/kkk.php?TPUBL- A933/publikaciok/tpubl_a_933.pdf
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This was founded by the Patriotism and Progress Association – represented by Gordon Bajnai, the country’s former Prime Minister (2009 - 2010) –, and the One Million and Solidarity movements.
Future of Europe. Perspectives from Hungary
3. Main questions touched in discussion a) How democratic is the current EU? What institutional reforms could ensure more democratic legitimacy in the future? The hottest debate turned around the question of “democratic deficit” within the EU. Participants who work or had previously worked for the European Union argued that “There is no democratic deficit at European level” on grounds that members of the European Commission (EC) are appointed by democratically elected parliaments and are also legitimized by the European Parliament (EP). The stance of the European officials was rejected by politicians elected to the European Parliament and the Hungarian parliament. These participants would like to see the EP invested with significant extra-powers, such as the right to elect members of the EC. It must be noted that greater involvement of the EP in decision-making was not rejected by the first camp either (citing, for instance, that the EP should have been more involved in the elaboration of economic policy proposal, such as the fiscal compact). It is also worth stating that there was agreement between the two camps on the adoption of a single (common) electoral law for European elections in member states, as well as the introduction of trans-European candidate lists and party nominations for the position of EC President. However, there was some degree of discord on two further issues. While all participants agreed that proposals for a bicameral system were welcome, European officials argued that the second chamber of the EP should represent national governments, whereas parliamentarians argued that it should rather be the representatives of national assemblies who should be sitting in the second chamber of the EP. Moreover, representatives of the two camps disagreed whether there was a need for more “consensual” or rather “partisanship” type politics in the EP. (While the first camp argued that this is a positive feature of European integration, which tampers polarization, the second formulated the opinion that “The lack of government / opposition divide is one of the reasons Europeans do not take the EP seriously.”)
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Note: Hungarian parties do not have a clearly defined stance on these issues. This, of course, is not independent of the fact the public is not much concerned with them.
b) The way forward: union of states or federation? This was the second key debate of the event. The camp of “Parliamentarians” argued that “with the fiscal compact, Six Pack and Two-pack we have reached the limits of supra-national intervention; these represent an optimal distribution of competencies”. This stance was more-orless overtly opposed by the “European officials” who argued that “the only chance for Europe to retain its geopolitical position is further integration”. In other words, the divergent positions reflected different points of view / reference. Those who focus on the “popular drive towards subsidiarity” (in both national and European arenas) and feel the “need to fill local, regional and national political frameworks with political content” believe that “European extra powers can backfire and may therefore do a disservice for democracy”. This camp is concerned with preserving competencies at lower levels of administration, arguing for instance that “the EC should only have the right to say whether a budget is feasible, not more”. Opposite we find those who look at national and European politics from the perspective of global competition and feel the need to seriously improve European competitiveness in relation notably to China and the U.S. This camp goes as far as arguing that “resistance from sub-European level should be tackled and managed” and calls for binding targets set at EU level.
Note: All right-wing political forces in Hungary are adamantly opposed to the centralization of powers. As noted above, more centre-leaning representatives of the political right would defend the status quo, while more radical representatives (aligned mostly, but not exclusively with Jobbik) would like to repatriate some or all powers to Budapest. Some left-wing forces (both within LMP and the Socialist Party) are also skeptical towards this and would only consider giving more powers to the EC if the powers of the EP are enhanced and the most important competencies of the national parliaments are preserved. These forces are, in other words, not opposed to a federal system in the long run. The liberal segment of Hungarian society, who would be the most in favor of centralization, currently has no political
Future of Europe. Perspectives from Hungary
representation. What unites these left-of-centre forces is (amongst other things) the willingness to work towards the formulation of a “European identity”. For this to arise there would in the first place need to be – in the words of one of the round table’s participants – a “real European public sphere; without this it will not be possible to foster European identity or democracy”. In other words, the way forward is the organization of Europe-wide discussions on critical topics.
c) Hungary and the EU The third key issue of the discussion revolved around the relationship between national and European democracy, posed concretely in the form of the following question: How should EU institutions and governments respond to the alarming political developments in Hungary? Are there new ways to better confront threats to democracy in member states? As opposed to the previous two issued there was a clear consensus on this one. This is not surprising given the fact the round table’s participants were politically situated in the camp of the opposition. Participants agreed that “the issue of rule of law and democratic rights in Hungary is a European problem”. As to how much can the EU can actually do, there was general agreement that European institutions’ room of maneuver is legally limited. (According to the Lisbon Treaty, the European Commission can only intervene if a country transgresses directives. As for the European Council, it is a political body hampered by political divided). Participants agreed that the new “European semester” may in the future allow monitoring rule of law,
but is insufficient in itself against de-democratization. Some participants raised the possibility of treaty change, more specifically the replacement of the Lisbon Treaty’s Article 7, which is clearly ineffective. Others argued, however, that legal reform will never be sufficient if there is no political will at the European level to preserve basic democratic rights. Several participants also pointed out that intervention from Brussels is not unproblematic either, as it may easily strengthen anti-EU sentiment. While in the current situation the only viable strategy is to “replace internal checks-and-balances with a political check from European institutions”, this cannot replace “political work from below”. As a complementary point other participants argued that “the improvement of European democracy could help tackle de-democratization processes on the national level”. As formulated by one Participant “the task is to help Hungarian citizens feel that they are part of a broader community”. Finally, several participants cautioned that the emergence of a 2speed Europe would necessarily entail a lesser focus on the periphery, which in turn may create incentives for autocratic leaders to “copy the Hungarian example” (as the Romanian example showed).
Note: Opposition parties have not taken a clear stance on the issue of “EU intervention”, but have rather attempted to work behind the scenes. This is because calls for intervention (of any kind) would be labeled as “political treason” by the political right – a stigma that the left (which has been depicted as unpatriotic) wants by all means to evade.
The article was written by Kristóf Szombati (Heinrich Boell Stiftung, Prague Office) starting from discussions that took place in the expert round table debates “Ways Out of the Crisis: The Future of European Democracy”. The debate was organised on October 5th 2012 in Budapest, by the Heinrich Boell Stiftung, the Green European Foundation, Ecopolis and the School of Public Policy of the Central European University. © Green European Foundation, November 2012. The views expressed in this article are those of the author’s alone. They do not necessarily reflect the views of the Green European Foundation. With support of the European Parliament. Green European Foundation asbl 1, rue du Fort Elisabeth 1463 Luxembourg Phone: +32 2 234 65 70 - Fax: +32 2 234 65 79 E - mail: info@gef.eu - Web: www.gef.eu
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