Farewell Putin, viva “illiberal democracy”? The lessons of Angela Merkel’s visit to Budapest

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Those who still hope that “enlightened European elites” will eventually force Orbán to reinstate key rights and provide greater room for the opposition are chasing rainbows

On 2 February, Angela Merkel flew to Budapest to spend five hours in the Hungarian capital. This seemingly routine and uneventful flash visit was nonetheless much anticipated on the Hungarian side.

It was Merkel’s first trip to visit her “great friend” Viktor Orbán since his landslide victory in the 2010 elections, and the Hungarian PM was hoping to capitalise on the occasion to strengthen his position both inside and outside Hungary.

The right-wing government’s popularity had dropped by 10 percentage points since the outbreak of an unprecedented wave of protests spawned by the planned introduction of an internet tax and a putative high-level corruption affair involving the head of the tax authority. At the same time, the Orbán government’s relations with Washington had become strained due mostly to Orbán’s conspicuous rapprochement with Vladimir Putin and his reluctance to support continued Western sanctions targeting Russia. This, together with the toughening of Germany’s stance on the Ukrainian crisis, has raised the spectre of Hungary’s marginalisation within the Western geopolitical bloc.

Steering a path between Putin and the West

Hungarian diplomats were slow to detect the crisis of trust lurking around the corner, and this forced Hungary’s Premier to make an overture towards his country’s most important economic and political partner – Germany. Orbán sent János Lázár, the head of the Prime Minister’s Office, to negotiate a truce with the Bertelsmann corporation, upon whose Hungarian subsidiary, RTL Klub, the government had imposed Europe’s highest advertising tax. Bertelsmann filed an official complaint with the European Commission last year, claiming that the levying of the 40-per-cent tax was unfair because it applied only to RTL Klub; the government further increased the tax to 50 per cent following the filing.

According to media reports, Lázár communicated the government’s willingness to lower the top rate of the advertising tax to 5 per cent in exchange for a commitment from Bertelsmann to depoliticise RTL Klub’s news programmes and, more specifically, to exercise self-censorship on any reporting regarding the personal finances of leading Fidesz politicians. The move was aimed at preventing the Chancellor from pointing to the treatment of German companies in Hungary as a source of tension between the two countries. Hungarian diplomats also hoped that Hungary’s demonstration of goodwill towards German capital interests would deter Angela Merkel from raising the “democracy issue”, which Orbán wanted to avoid discussing at all costs.

The Hungarian government’s strategy of overtures to Germany was shaken, however, by Vladimir Putin’s unexpected signal that he, too, would be ready to accept the invitation Orbán had extended to him in 2009. Merkel’s main reason – everyone knew – for stopping in Budapest was to pressure the Hungarian Premier into supporting the extension of the first round of European sanctions targeting Russia, which will expire between March and July. Bowing to the German demand could expose Hungary to Putin’s anger and a potential backlash. Hungarian diplomats are said to fear that Putin will use his visit to Budapest – scheduled for 17 February – as a platform to mount an attack against the sanctions regime, thereby humiliating Orbán and further eroding Hungary’s credibility within the EU.

This potential threat, together with Hungary’s dependence on Russian gas imports, has so far limited the Hungarian government’s appetite to adopt the German position on the sanctions regime, which Angela Merkel sees as necessary for averting an escalation of the Ukrainian conflict. The difficulties in steering a path in between “Putin” and the “West” were on full display at the joint press conference held by Orbán and his guest after their private discussion in parliament. While Merkel stressed the necessity of adhering to a common platform on Ukraine, the Hungarian Premier emphasised his country’s greater dependence on Russian gas supplies, implying that an extension of sanctions would be difficult for Hungary to accept.

In exchange, Angela Merkel touched directly on the issue Orbán wanted to avoid, reminding her host that “even if you have a broad majority… it’s very important in a democracy to appreciate the role of the opposition, civil society and the media”. And she did not stop there. In response to a question on what she thought of the term “illiberal democracy”, she replied: “I do not know what to make of the word ‘illiberal’ in relation to democracy,” explaining that liberalism was one of the ideological tenets on which the CDU had been founded. Orbán, prompted to riposte, declared: “Not all democracies are liberal. And if someone wants to say that democracy is necessarily liberal, then they are demanding privileges for an ideology that we cannot grant.”

The rhetoric of illiberalism

Theoretically speaking, Viktor Orbán has a point. The relationship between liberalism and democracy has been one of the most heatedly debated topics in political philosophy since the 1980s. Some theorists insist that the protection provided through the regime of granting rights to minority interests and individual liberties constitutes one of the most important advances in modern history, arguing that this has erected powerful barriers to state terror. Others, however, have argued that the institutionalisation of individual (especially property) rights prevents democracy’s full development, because the interests of citizens of various standing are represented proportionally to the influence which they can purchase. On this view, liberal democracy is merely a façade concealing an oligarchy.

If we examine the historical record, it appears that the system of checks and balances, which we now understand to be the core component of liberal democracy, has not proved to be an effective barrier to the collusion of moneyed interests and political power. Longue durée historical research has convincingly demonstrated that liberal political systems are much more attuned to the wishes of the rich than to the aspirations of the poor. Moreover, it appears that the threat of social upheaval has been far more effective at increasing elites’ appetite to share wealth and power with the masses than the everyday functioning of these institutions (see for instance Kevin Phillips’s book: Wealth and Democracy, 2002).

That said, it must be highlighted that the Hungarian Premier’s critique of liberalism and liberal democracy is not driven by a desire to attenuate “class warfare from above”, but rather to intensify it. The “work society” he is seeking to bring into existence is built on the foundations of low wages and minimal social protections, which Orbán sees as guarantees of competitiveness in a resource-poor country. In order to maintain this fundamentally unequal social model, Orbán needs to ensure that the lower tier of society (which would bear the brunt of the hardship that would result from dismantling the last bastions of the welfare state) cannot be mobilised by the political opposition.

To this end, Orbán has given sweeping powers to rural mayors, who now run their villages as quasi-fiefs, has created a formidable propaganda machine (state control of the media), and has limited the opposition’s manoeuvring room by dismantling the system of checks and balances (a one-party constitution) and hollowing out the parliament. Finally, Orbán has selected a critique of liberalism as his key ideological weapon, because this has allowed him to position himself as the defender of the Hungarian people in the face of a declining West and its local cronies:

“Since the state is nothing more than a form of organising the community, which in our case sometimes coincides with the country’s borders and sometimes doesn’t, and this is something I will touch on again a little later, the determinative moment in today’s world can perhaps be described by saying that there is a race underway to find the method of community organisation, the state, which is most capable of making a nation and a community internationally competitive. This, Ladies and Gentlemen, is the explanation for the fact that the most popular topic in thinking today is trying to understand how systems that are not Western, not liberal, not liberal democracies and perhaps not even democracies, can nevertheless make their nations successful.

The stars of the international analysts today are Singapore, China, India, Russia and Turkey. And I think that our political community recognised and touched on this challenge correctly several years ago and perhaps also succeeded in processing it intellectually, and if I think back on what we have done over the past four years and what we will be doing during the upcoming four years, then things can indeed be interpreted from this perspective. Meaning that, while breaking with the dogmas and ideologies that have been adopted by the West and keeping ourselves independent from them, we are trying to find the form of community organisation, the new Hungarian state, which is capable of making our community competitive in the great global race for decades to come.”

In this important speech, delivered on 26 July 2014 in front of thousands of young people gathered in a Transylvanian town, Orbán obliquely acknowledged that the pursuit of “illiberal democracy” could bring Hungary closer to Vladimir Putin’s Russia and Recep Tayyip Erdoğan’s Turkey. The Hungarian Premier’s foreign policy strategy was built on the premise that economic and political divisions within the European Union would linger or even increase, and that the Union could eventually drift towards the British vision of an economic area integrated not by political institutions but by nations’ commitment to free trade. This would suit the interests of an “illiberal” Hungary looking to benefit from closer ties with Russia, Turkey and China while continuing to take advantage of an integrated European market.

The impact of the Ukrainian crisis

The strategy of converting Hungary into a “ferry country” was formulated before the eruption of the Ukrainian crisis, which raised the spectre of Europe’s re-division into competing socio-economic and socio-political models and geopolitical zones of influence. It remains to be seen whether this scenario – a new Iron Curtain – will actually materialise. And even if it does, we still do not know where a firm border between Western and Eastern Europe could be drawn. In any case, the mere prospect of a new cold war has already strengthened the hand of those calling for more unity, including Angela Merkel, who appears to have committed herself to transforming the EU into a political union already in the mid-term.

The clarion call for collective action – manifested most clearly in the areas of energy and foreign policy – has already limited Orbán’s manoeuvring room. It is increasingly difficult to see how the Hungarian government could refuse Merkel’s demand to back her government’s hardening stance on Russia. The Hungarian Premier could theoretically opt to defy Germany if he finds at least one partner-country in the EU to support him, but such intransigence appears unlikely for three reasons: First, there are no obvious partners in sight. Alexis Tsipras may agree with Orbán on the need to increase the authority of national governments, but he is unlikely to risk alienating European leaders amid difficult negotiations on restructuring Greece’s debt. And it is equally difficult to imagine Orbán joining forces with a radical left-wing politician.

Second, Orbán’s vision of the “work society” is founded on the axiom of close economic cooperation with Germany. The dream of Hungary rebuilding the industrial capacities it lost after 1989 rests firmly on the assumption that German industrialists will continue investing in Hungary. According to information leaked by Hungarian participants in the 2 February meeting, Merkel and Orbán discussed the plan of relinquishing German control of a major power plant and Airbus’s participation in a helicopter tender waiting to be announced. It is difficult to see the Hungarian government jeopardising the German partnership for the sake of signing a lucrative gas contract with Putin.
Third, there is the prospect of a significant domestic backlash, which Orbán will certainly want to avoid.

The impact of international pressure

The recent “corruption affair” involving the head of the tax authority has already highlighted the Hungarian government’s vulnerability to international pressure. The affair erupted after newspapers published a story on the imposition of a US travel ban by the American State Department on a high-ranking Hungarian official whom the Americans suspected of being involved in illicit financial activities. The government was unable to respond effectively to the warning, which most analysts interpreted as being rooted in Orbán’s rapprochement with Russia. Tens of thousands of demonstrators flooded the streets of the capital, and there were unprecedented demonstrations in smaller towns as well.

In addition, if Orbán were to place a spoke in Merkel’s foreign policy wheel, he would run the risk of inviting a concerted European attack against his regime. There are a number of high-ranking European politicians, especially on the left, who would probably exploit such an opportunity to marginalise the Hungarian government. The Premier knows this, and will do everything in his power to avoid a re-run of 2011–2013, a period during which he had to defend himself constantly against sharp criticism from the Council of Europe and the European Parliament.


For these reasons, I see a good chance of Orbán moving closer to Germany and putting greater distance between Hungary and Russia, although a rupture with Putin remains highly unlikely. The Premier clearly believes that nuclear power and cheap gas are the keys to Hungary’s competitiveness. This means that he will be looking to maintain good relations with Russia (which has promised to provide a loan to build two new reactors at the Paks Nuclear Power Plant) within the limits set by Merkel’s foreign policy. Moreover, adopting the German position is unlikely to signify the end of the “illiberal experiment” in Hungary.

In my view, those who still hope that “enlightened European elites” will eventually force Orbán to reinstate key rights, reintroduce constitutional checks and provide greater room for the opposition are chasing rainbows. Indeed, the organisers of the recent protests, who had capitalised on the US travel ban to stir unrest in an otherwise resigned country, hoped in vain that Merkel would find time to meet with them during her visit. The stability of Orbán’s System of National Cooperation cannot be maintained without the “illiberal” mechanisms of coercion and consent. Luckily for Orbán, German elites are not asking him to reform the regime. Merkel’s visit showed that the price Orbán will have to pay to maintain the German-Hungarian partnership and to secure a steady flow of German investments in the Hungarian economy is a) to follow Germany’s European and foreign policy, and b) to alleviate the “crisis taxes” which apply to economic sectors where German companies play a key role (i.e. telecommunications and retail). Merkel’s closest aides have confirmed that the Chancellor is not interested in marginalising the Hungarian Premier. What this means is that she is ready to support Orbán, provided he respects certain red lines.

The coming to terms with Realpolitik à la Merkel (and the balance of forces in European politics) may fuel apprehension and resignation, especially when one considers European institutions’ impotence in the face of the tendencies towards de-democratisation in Hungary. But a more sober and historically informed reading is also possible: If there is one thing 20th-century Hungarian history should teach us, it is that deus ex machina solutions do not last, because democracy, by definition, can only thrive on popular energy; it is bound to collapse without this input. So perhaps it is not so tragic to see Frau Merkel prioritising European unity and the interests of German industry instead of playing the defender of Hungarian citizens’ rights. Who knows, maybe it will take such sobering experiences for people in this country to wake up and realise that the betterment of their situation depends on them too.