Eight months after sweeping to power in a landslide victory, Hungary’s new government can look back on a period of frenetic activity unprecedented in the country’s 20 years of democracy.
The populist conservative Fidesz party has terminated ahead of schedule the stand-by agreement that bailed Hungary out during the credit crunch in autumn 2008, cut the number of ministries to its lowest level since the 19th century, announced a string of windfall taxes on primarily foreign-owned industries, started work on a new constitution promised for next year, and introduced a media law that appears to herald much closer oversight of both publicly and privately owned media.
Any of these measures would have attracted comment on its own, but the implementation of so much in the space of less than a year – aided by an overwhelming and highly disciplined parliamentary majority – has left many wondering what the country’s EU presidency, which begins on 1 January, will bring.
Viktor Orbán, the prime minister, said last week that Hungary was taking a “realistic” view of its presidency – the third time a new member state has held the chair, after Slovenia and the Czech Republic.
But his busy travel schedule in the run-up to the hand-over, personally visiting the other 26 heads of government, suggests his ambitions for the presidency are no more modest than his domestic political agenda.
“Hungary’s task will be to keep the EU in a functional state in 2011, which is likely to be the most difficult of the past 20 years for the EU,” he said in Copenhagen last week.
While there can be no doubt about the determination and discipline with which his government has pursued its domestic agenda, using its parliamentary majority to ram through constitutional amendments when the Constitutional Court stood in its way, the same tactics are unlikely to work in the EU’s consensus-based environment.
This was illustrated within days of Fidesz winning the election on the back of promises to cut taxes and restore the country to growth. Orbán had hoped to finance tax cuts by convincing the International Monetary Fund and the EU to agree to a much larger budget deficit than the 3.8% of gross domestic product envisaged under the country’s stand-by agreement.
But at a meeting in Brussels, José Manuel Barroso, the president of the European Commission, scotched this plan. The government was forced to improvise, levying windfall taxes, and later coming up with a plan to coerce employees to hand their private pension savings to the state.
The work of the presidency will be further complicated by the government’s structure. On taking office, the economics and finance ministries were combined to create a National Economy Ministry, under György Matolcsy, with broad responsibility for revenue-raising, while the major spending ministries, including health and education, were combined into a National Resources Ministry under Miklós Réthelyi.
A third super-ministry, the Ministry for Public Administration and Justice, is the power base of Tibor Navracsics, the deputy prime minister responsible for the day-to-day functioning of the government. Within each ministry, junior ministers are responsible for individual portfolios.
While the aim was to streamline government and leave Orbán free to concentrate on broad strategy, turf wars have resulted, and, months later, some civil servants were still unsure which ministry they worked for.
In practice, observers say, policy is set by Orbán, Matolcsy and those close to Orbán, including a handful of advisers in his private office, such as Mihály Varga, a former economics spokesman for Fidesz, now state secretary in the prime minister’s office.
Thomas Escritt is a freelance journalist based in Budapest.
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