Right takes hold in Hungary

Submitted by Matthew on 22 February, 2012 - 9:52

In Hungary, capitalist crisis has led to triumph for the right, not the left.

In late 2011, the Bloomberg corporation classed Hungary as the eighth-riskiest economy in the world — second only to Greece as a likely candidate for bankruptcy.

Two ratings agencies have downgraded Hungary’s public debt to junk status. In October, December and January investors were not prepared to buy bonds put up for sale by the government. The market price of Hungary’s bonds already in circulation fell so that the (fixed) interest payments on them now represent a yield of 10% a year.

The forint, the Hungarian currency, was the weakest currency in Europe in late 2011 and fell to a record low. Over the past 12 months it has lost 8.5% of its value against the euro. Over the same period the main stock index in Hungary fell by 20%.

Interest rates have continued to rise and now stand at 7%. VAT has recently been increased from 25% to 27%, and inflation is running at 5.5%, nearly double the official target for inflation. For the fifth year in a row, wages will lag behind inflation.

Unemployment is around 11% and the labour-force participation rate of 55% is among the lowest in Europe (where the average is 65%).

Meanwhile the ruling Fidesz party (elected in 2010 with a majority of two-thirds in Parliament) has rushed through Parliament a new constitution and an accompanying package of more than 200 laws which seriously undermine the country’s democratic credentials.

The new Hungarian constitution opens with references to God, Christianity, the Hungarian Holy Crown, the fatherland, and traditional family values such as the duty of children to look after elderly parents. The rest of the constitution follows in this vein.

Harking back to a mythical Hungarian nation of 10 centuries ago, all members of ethnic Hungarian minorities abroad are defined as members of the Hungarian nation.

Life commences, and enjoys constitutional support, from the moment of conception. Marriage can take place only between a man and a woman. Life sentences, with no possibility of parole, are to be imposed in cases of violent crime.

The powers of the Hungarian Constitutional Court have been curtailed, while the President is empowered to dissolve parliament if it refuses to accept a budget.

The constitution also declares the forint to be the Hungarian national currency, bans governments from increasing the public debt (currently standing at 80% of GDP), and declares a range of issues to be covered by “Cardinal Laws“ which can be amended only by at least a two thirds majority in Parliament.

Fidesz has also introduced a new electoral law which reduces the number of constituencies and redraws the new boundaries to its advantage,

Ironically, the Fidesz party which has introduced such an anti-democratic constitution — triggering popular protests on the streets and also protests by the institutions of the European Union — began life as a pro-democracy youth movement set up to challenge Hungary’s now defunct Stalinist regime.

In the years following the collapse of Stalinism Fidesz failed to win more than 9% of the popular vote and performed increasingly poorly in successive elections.

1994 saw a right-wing “coup“ within the party, triggering a major split, with many of Fidesz’ founding members and their supporters resigning from the party as it moved in an increasingly nationalist direction.

Fidesz also recruited members who formerly belonged to the pre-1989 Hungarian Communist Party. Three members of the eight-man Fidesz cabinet are former CP members.

Fidesz has also cracked down on cultural freedoms.

Government critics have been sacked from editorial positions, an independent radio station has lost its licence (supposedly for not playing enough Hungarian music), and a popular rapper has been under criminal investigation for using lyrics from the national anthem.

Religious equalities are also under attack. A new law has cut the number of “recognised” religions from more than 300 down to 14.

None of those 14 are Muslim, Hindu or Buddhist sects. To secure “recognition“ a religion must be vetted by the security services, have at least 1,000 followers in the country, and secure parliamentary approval.

A socialist government, or even a consistently democratic bourgeois one, would not “recognise” any religions. But the new Hungarian laws are not a step towards secularism. They are a move towards privileging certain sects — predominantly Christian ones — over others.

In fact, according to Fidesz leader Viktor Orban, the country’s Prime Minister, the West’s abandonment of specifically Christian values is to blame for its current economic — and moral — crisis.

In July a new Labour Code will weaken workers’ rights, undermine national minimum wage protection, and “encourage“ part-time working and a “more flexible“ labour market.

None of these measures were even mentioned by Fidesz in their manifesto for the 2010 elections. But once it had secured more than two thirds of the seats in Parliament, it was too good an opportunity for Fidesz to miss.

Fidesz’ drive to centralise power in its own hands has extended to economic policy. This has triggered conflict with European Union institutions and the International Monetary Fund.

In 2010, the government threw an IMF delegation out of the country, after it had called for cuts in welfare spending. Fidesz has also nationalised pension funds, imposed new taxes on services, and allowed Hungarians with mortgages in foreign currencies to pay them off at artificially low rates, costing mortgage lenders about 5% of their assets.

At the close of 2011, the Fidesz-controlled Parliament introduced a flat-rate universal income tax, a cap on public debt, and virtual government control of the Hungarian central bank (which is forbidden under EU treaties).

The European Union and the IMF responded by breaking off talks about possible credit facilities for Hungary, and by demanding that the laws giving the government control over the central bank be withdrawn as a precondition of the resumption of talks.

Orban dismissed criticisms by denouncing the EU and the IMF as “international leftists“, but subsequently started to backtrack in order to allow for a resumption of negotiations with them.

Fidesz’ economic policies are no better than its social policies.

Even where it can invoke issues of democracy (such as the right of an elected government to control a country’s banking institutions), its economic policies are narrowly nationalist.

According to recent opinion polls, support for Fidesz has slumped to less than 30%, with some polls indicating only 18% support.

Effective opposition to Fidesz will have to be organised on the streets and in the workplace.

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