Hungary: What can we expect from the next Orbán government?

Teaser Image Caption
People on the street in Budapest

On 6 April, Fidesz obtained – with the help of a carefully crafted electoral regime – another two-thirds majority in the Hungarian parliament. While some observers are still debating whether the election can be considered free and fair, I myself believe that this is a largely futile debate. While Fidesz would clearly not have obtained a two-thirds majority (133 seats out of 199) under the old electoral system, it did receive one million more votes than the left-of-centre opposition, and there is no conceivable electoral system in which it would not have obtained a comfortable majority. In this article, I will attempt to do two things. First, I will try to say something about why Fidesz only lost approximately 600,000 voters in 2014 compared to its 2010 showing despite a rather negative governmental record. Then, based on this, I will try to think through what Viktor Orbán will want to do with his supermajority, and what the next four years are likely to bring in Hungarian politics and society. In what follows, I will address these issues separately and then attempt to bring the two threads together at the end. Readers should be warned that these comments will necessarily be tentative. Analyses produced in the first half of the last parliamentary cycle (2010-2014) have shown how little experts and commentators understood Viktor Orbán’s true intentions and the plausible reactions of Hungarian society to his style of governance and policies.

The populist genius

One of the things commentators got very wrong was the prediction that “it would all come down to the economy in the end”. The underlying argument was as follows: If large segments of the population do not feel an improvement in their living standards after 7-8 years of muted austerity, then Fidesz will lose the elections in 2014. In an article written in May 2012 – when Fidesz’s popularity ratings were at its lowest – I myself argued along these lines, claiming that “the fate of the new ‘System of National Cooperation’ depends on the political right’s ability to redress the historical sins of the Hungarian left – which had been in power for 12 out the last 20 years – by creating jobs, stabilising livelihoods, and decreasing corruption” (1). Two years down the road, the previous Fidesz government’s record is ambiguous in this regard, to say the least.

While Fidesz promised to create one million jobs in ten years, the number of Hungarians employed only rose by 160,000 (from 3.71 to 3.87 million) between 2010 and 2014. And this improvement itself was due to three factors: 1) the sharp rise in the number of unemployed people enrolled in the state-funded public works (“workfare”) programme (c. 100,000-200,000 people); 2) the inclusion of c. 100,000 Hungarian citizens working abroad in the “employed” category; and 3) the economic boost resulting from European funds to the construction sector during 2013-2014 (a great deal of the money was poured into highly visible renovation projects in the capital and in larger cities). Taking these into account, it is safe to say that the government made minimal progress in fulfilling its promise to create one million more jobs. And the picture is none the rosier when it comes to livelihoods – at least for those citizens who do not belong to Fidesz’s core constituency. Between 2010 and 2014, the government allocated substantial resources to alleviate the burden borne mostly by middle-class citizens who had taken out loans denominated in Swiss francs or Japanese yen. The middle class also benefited from the introduction of a flat (16 percent) income tax, in contrast to the working poor, who ended up paying not less but more income tax due to the suppression of tax breaks targeted at lower income brackets. Of the one million employees who went home with less money in their pockets in February 2012 (when the tax reform came into effect), only 16 percent said they supported Fidesz, while the ruling party’s support still stood at 38 percent among the voting population as a whole. I interpreted this as the fracturing of the “historic bloc” that brought Fidesz to power in 2010 – an improbable coalition of the urban upper middle class and sections of an economically and socially insecure rural petty bourgeoisie. Two years down the line, however, it has become clear that this assumption was premature. Having registered dissatisfaction in the provinces, the government introduced a deft policy of rolling utility price cuts – a measure that won Fidesz significant support from hard-working but low-earning groups, and ultimately guaranteed Fidesz’s re-election.

It would be a mistake to interpret Fidesz’s rebound among the lower middle class as an instance of “voters choosing based on the weight of the coins in their pockets”. Economists have convincingly shown that the savings made in the lower income tier thanks to the utility price cuts (savings on gas, electricity and water bills) were offset by the VAT hike (from 25 percent to 27 percent - the highest in the EU). The picture becomes even more blurred when we take into consideration the fact that the number of people in poverty rose by a staggering 17.5 percent between 2008 and 2012 (the greatest such rise in the CEE region), partially as a result of a 10 percent decrease in social welfare expenditures during this difficult period. (Hungary and Greece were the only EU member states that chose to decrease social welfare expenditures in the aftermath of the economic crisis.)

So how did Orbán convince the roughly one million voters who did not benefit from his policies to support Fidesz in 2014? I believe that the answer lies in his ability to construct a symbolic politics which allowed him to deflect blame for the difficulties onto others and to present himself as the only bulwark against the evils lurking around the corner – the IMF, transnational capital, the Socialist “kleptocracy” and, most recently, Jobbik. Those who argue that Fidesz won this election on a hugely uneven playing field are right, especially when it comes to media control. There really are hundreds of thousands of (mostly) rural citizens who have access only to media channels which spit Fidesz propaganda day and night. But it would be wrong to jump to the conclusion that the majority of these citizens would have supported the opposition if they had heard more, for example, about the dark side of the Paks expansion deal, about Fidesz caucus leader Antal Rogán’s inaccurate declaration of his personal assets, about the number of tenders won by oligarchs maintaining close ties to the governing party, or about public funds spent on rebuilding football stadiums all around the country. The fact is that hundreds of thousands of citizens voted for Orbán knowing full well that his government was not immune to nepotism, cronyism and institutionalised corruption. And they did so because the prime minister’s actions and words convinced them that his government, while not perfect, was of the people and for the people.

By 2010, a large majority of Hungarians had reached the conclusion that the liberal consensus which had provided the foundation for politics of all colours after 1989 was not much more than a thinly veiled attempt by the national elite to legitimise the exploitation of Hungary’s labour and assets by “foreign powers” – transnational capital (“big business”) and the international organisations acting in the interests thereof (“big brother”). The genius of Orbán – formerly a promoter of textbook liberalism – was to sense the winds of change and to ride the wave of the emergent anti-liberal “common sense”. One must admit that few could have done better. The prime minister’s decision to break with previous governments’ strategy of accommodation vis-à-vis European partners and corporations by engaging in a “freedom struggle” tapped neatly into popular frustrations with the outcomes of regime change and allowed Orbán to present himself as the defender of popular interests. Few have noted this, but Orbán’s frequent use of folk expressions and proverbs, his carefully crafted appearances amongst “the people”, his love of football and, most notably, his commitment to protecting Hungarians’ right to brew brandy at home have all contributed to legitimising this position. There is little doubt that the communication strategy pursued by Fidesz since the social referendum of 2008 (2) will be taught as a textbook example of successful political communication in university departments across Europe.

The prospects for “consolidation”

Fidesz did not publish an electoral programme in 2014, and the prime minister’s response to journalists inquiring about his future plans was “We will continue.” We have every reason to believe him. Although the prime minister appears to be the freest leader on the continent (after dismantling the system of checks and balances and the opposition’s profound defeat, there are no domestic limitations on his power), he is in fact a prisoner of the political strategy that won him re-election. Nationalist rhetoric and the narrative of the freedom struggle have now become the ideological cement of his heterogeneous constituency. Were he to abandon these, he would face the prospect of alienating a voter base that fervently believes in this truth, and there is a good chance that in such a situation many of these voters would sooner veer to the far right than to the left. This is because the ideology of Fidesz is difficult to differentiate from the ideology of Jobbik. This is not to say, of course, that a Jobbik-led government would not take a fundamentally different approach than Fidesz’s to the EU, the Roma and Jewish populations or transnational capital. But the two parties undeniably share a commitment to a militant nationalism that is now hegemonic in large swaths of the country. This election has shown that the left is – at least in its current shape and state – no longer considered a viable political alternative in rural Hungary. The left-of-centre alliance led by the Socialist Party suffered a crushing defeat in villages and small towns. Although we should not rule out a leftist revival in the foreseeable future, it is clear that in the next four years rural Hungary will be the battleground of the right and the far right.

For this reason – i.e. the presence of an emboldened radical challenger to his right – it is difficult to see how Viktor Orbán would live up to the expectation of “stopping the steamroller” and striking some kind of compromise with the fragmented left-wing opposition and the European Union. Events in the first week following the election appear to support this claim. The beginning of construction works on a memorial to the victims of the Nazi occupation (an initiative that infuriated the Jewish community and left-wing intellectuals who believe that the memorial relativises Hungary’s and Hungarians’ role in the Holocaust) and Orbán’s promise to thwart Brussels’s attempt to ban the tax-free brewing of brandy warrant the assumption that the government will continue to play on symbolic issues to reinforce existing cultural dividing lines with a view to forestall a massive migration between political blocks. While the further isolation of the fragmented and warring left appears to be a relatively easy task in the upcoming cycle, Orbán must not overstretch tensions with European partners to the point of radicalising his voter base and thereby strengthening Fidesz’s rival, Jobbik. The message he will be looking to hammer home is that Hungary finally has a government capable of defending Hungarian interests within the EU. This tactic is likely to be bolstered by renewed political pressure from the EU, as Ivan Krastev rightly noted: “Experience shows that outside pressure works only when liberal forces in domestic politics are in a position to take advantage of it. That was the case in Poland in 2007, when voters chose the moderate Donald Tusk over the populist Jarosław Kaczyński. But the success of Fidesz – the butt of repeated criticism from the European Commission and the European Parliament – shows that in the absence of a credible domestic opposition, picking fights with Brussels is an easy way to win votes.” (3)

The left’s inability to mobilise the three million people living in poverty who bore the brunt of the neo-conservative fiscal consolidation which was carried out during the last four years has created favourable conditions for continuing the government’s strategy of consolidating rural areas by strengthening social mechanisms of control. At the moment, there is no articulated political demand for alleviating poverty or for providing children from disadvantaged backgrounds with marketable skills through long-term investments in education. Instead of reopening the blocked channels of social mobility, the new government will further expand the popular workfare programme (which allows local elites to discipline the permanently unemployed, but not to help unskilled citizens access the primary labour market, which remains the key to social integration and mobility) and maintain a strong police presence in disadvantaged areas. The ability to save on spending for the poor will allow the government to reserve social expenditures for Orbán’s core constituency: the propertied bourgeoisie and the hard-working lower middle class. The services of a class-biased welfare state and the entitlement to social solidarity will be reserved for these social groups. Again, the most recent announcements underscore this claim. The government has already signalled that it will push for a permanent solution to the still sizable foreign currency debt burden, and there are signs that the flagship social policy of the first Fidesz government (1998-2002) – substantial tax deductions for the purchase of new homes – will be revived, albeit in a more watered-down form. Fidesz has also made clear that it will take the policy of utility price cuts to another level by creating non-profit utility companies. This inherently leftist project (the financing of which remains a significant unanswered question) is especially likely to go down well within the ranks of the lower middle class, the constituency that is most prone to being recaptured by the left.

A final word on the economy: Although liberal economists have been sounding the alarm bells for more than three years now, evidence of an imminent economic downturn is nowhere to be seen. While it appears likely that the taxes imposed on large corporations in the retail, energy and banking sectors, together with the unpredictability of the regulatory environment, will keep investments at a low level and economic growth below 2 percent, this should still allow Orbán to fund his moderate welfare programmes targeting the bourgeoisie and, importantly, to claim that he has done better than the previous socialist governments. Only the relatively few Hungarians who regularly travel abroad or maintain strong links with Hungary’s neighbours will recognise that Hungary is steadily falling behind the other Visegrád countries. But their critical views will be at odds with the positive experiences of the system’s beneficiaries and with the plaudits of supporters who will assess the country’s performance through the lens of subtly controlled media channels.

In other words, there is every reason to believe that Orbán’s rule will last for at least another four years, but probably more. This is not to say that the prime minister will succeed in consolidating his “System of National Cooperation”, which actually appears unlikely. But the regime is – at least according to my prognosis – likely to maintain its power through the populist appeal of its leader and through its tacticians’ ability to pump air into or out of an extremist contender that can prevent the left from regaining a foothold in its “natural environment” (amongst the losers in his “System of National Cooperation”). Paradoxically, however, its legitimacy will be undermined by the very technologies that will allow it to manufacture popular consent. Somewhere down the road, the millions of Hungarians whose children will grow up without the prospect of improving their social status will realise that not only Orbán, but his whole regime, will have to be brought down if they do not want their grandchildren to suffer the same fate. The question that already looms over us now is the same one that loomed over the country during Admiral Horthy’s inter-war regime: Will it be the left or the far right that disposes of class-biased competitive authoritarianism? The opposition has obtained four more years to begin moving in the right direction.


(1) See my analysis "Sticks in the spokes of the “booth revolution
(2) In 2008, Fidesz decided to push for a referendum on school fees, hospital fees and medical co-payments, which the social-liberal government proposed to introduce with a view to stabilising the budgetary deficit. The results of the referendum (82-84 percent against the reforms) had far-reaching political consequences. The coalition collapsed one month later, and Fidesz was able to attract a large part of the Socialist Party’s voter base.
(3) Source: