In a State of Necessity. How has Orbán changed Hungary

18.09.2014 | By Maria Beresova

The report analyzes political steps undertaken by the Fidesz party after its sweeping victory in the 2010 elections in Hungary. The impacts of the sometimes controversial policies are studied with respect to both international relations of Hungary as well as to the domestic position of the Fidesz party.

The author starts his analysis with the Hungarian domestic policy. With the two-thirds majority reached in the elections in 2010, Fidesz could carry out a major reconstruction of the state. The reforms affected many layers of the administration and government. However, they have not undermined the fundamental Hungarian political system established in 1989. Some of the state institutions that previously counterweighted the legislative and the executive powers as part of the checks and balances have been weakened, such as the Constitutional Court. Concerning business and media, Fidesz gained more influence in these sectors. The new media act that was introduced shortly before Hungary took presidency in the Council of the European Union was sharply criticised by the EU and many journalists.

The second section of the report is devoted to the economic policy. Fidesz took power at the beginning of the deepest Hungarian financial recession, but it wasn’t a catastrophic situation due to huge loans from IMF and other institutions. The goal was to improve the health of public finance through many financial reforms, which included high taxation for large businesses; state controlled pension system; huge takeovers in energy sector; etc. Another important move was strategic cooperation agreements with 43 foreign companies in the production sector. The budget deficit was reduced below 3% of GDP, the public debt was reduced (yet still remaining the highest in the region), the unemployment rate was slightly reduced, however, the investment climate worsened.

The third and final section of the report reviews the governmental policy in international relations. Here, the Hungarian policy is described in terms of little activity and initiative with respect to both EU and NATO. Despite the Eurosceptic rhetoric at home, Hungary seems to follow EU’s mainstream and its approach to the EU cannot be described in terms of any fundamental changes. With the aim to counterbalance the significant cooling of relations with large western European countries, Hungary turned more to regional cooperation as represented especially by the Visegrad Group and – in the wake of the economic crisis – it intensified its contacts with Russia as a part of its Eastern opening strategy, visible mostly in the energy sector.

Despite all the controversies, the domestic position of Fidesz remains strong. The report identifies several reasons for the current government’s unchallenged position – from the weakness of the opposition to the fact that no social group was directly impacted by the governmental policies. Therefore, the report predicts that the Fidesz party will remain in power if no significant changes are to occur in the near future.


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