The Rule of Law in Europe. The case of Hungary

Eszter Nagy
Secretary General of UEF-Hungary, Member of the UEF Federal Committee

“Money makes the world go ‘round”, the famous song from the musical Cabaret is more valid than ever before. It is true for the EU’s authoritarian leaders in two aspects; on the one hand, they receive unconditional financial support from the EU, and on the other hand they use financial means to punish local opposition, to eradicate independent media, and to suppress critical voices in general.

Within the EU there is the recurring narrative of the toolbox of the Commission. Tools they could make use of to assure the safeguard of the treaties. So, what is there in the toolbox?

There is a brand new, so far unused shiny new tool for this purpose, the rule of law mechanism that was finally adopted after long and difficult negotiations. Its purpose should be to fill in the shortcomings of the so far existing set of tools to guarantee the EU-wide respect of the basic democratic values.

However, there is also EU-wide skepticism about the implementation of the rule of law conditionality. Earlier this year the European Parliament even threatened the Commission with legal action should the Commission delay the application of the budget’s rule-of-law mechanism any further.^[i] Obviously the Commission’s wait-and-see approach comes handy to those enjoying the chaotic status quo, the lack of accountability on EU level.

Hungary and Poland threatened to veto the whole budget framework and the recovery fund until the very last moment. And then, there was a compromise allowing these two member states to soften it, to turn to the European Court for review. The Hungarian and the Polish governments waited until the very last moment – as it was also expected – to file their complaint at the European Court of Justice about the EU budget.^[ii] What was and is really at stake? Hungary will hold general elections in 2022, and Poland in 2023. The Polish and the Hungarian “chicken game” with the veto revealed their intentions, leaving no doubt regarding the motivations of these two governments. They need the money for their political purposes. Their success will only depend on the approval of their national plans, and the capability of the Commission for action, as nobody can tell how fast the European Court can finish the review process; but nobody expects it to be very fast, either.

There is another famous tool that used to be called the “nuclear option”, the Article 7 procedure. Not surprisingly, the two ongoing procedures are also against Hungary and Poland, and still ongoing with little hope they could bring a tangible result any time soon. The founding fathers of the EU would have never thought that this procedure would once need to be applied against two member states that could easily support each other in blocking their final conviction. So, this tool seems to be quite unfit for the purpose. We can only hope that the Commission will search some other tools to mend democratic backsliding within the Union, or some different kind of repairing methods.

In Hungary, “Money makes the world go ‘round” works also for politics, as for other related fields of life. Entering power in 2010, Orbán has been the first prime minister ever to be favored by EU-funds, and never reluctant to use them for his political purposes.

He has his own toolset, somewhat more efficient, but also more ferocious than the one of the European Commission. By it, the originally noble purposes of EU funds have been converted into providing the ruling party with a devastating political advantage. Instead of serving the general interests of the country, the EU-funds contributed to the strengthening of Fidesz-close oligarchs, the most famous of which being Lőrinc Mészáros, originally a gas-repairman and a childhood friend of Viktor Orbán.

A gas-repairman comes handy in the toolbox of Orbán: Mészáros has accomplished a miraculous career becoming the richest Hungarian in the past 10 years.^[iii] Mészáros, who likes to compare his talents to those of Zuckerberg, cannot even follow any more the number of companies he owns, or the sectors where his companies are present, ranging from hotel chains, media holdings, building industry, financial sector, real estate sector, thermal baths, tourism, agriculture, wineries, insurance companies, etc.^[iv]

An important example for the price we Hungarians are paying for the rise of Mészáros is the ever-shrinking space for media freedom. In 2016, Opimus Press – an offshore-owned company over which Mészáros exercises influence – purchased Mediaworks Hungary from Vienna Capital Partners. Mediaworks Hungary owns 14 of the 19 regional dailies, as well as the rights to the daily national newspaper Népszabadság that it stopped publishing on October 8, 2016. Hungary lost its biggest daily, a high-quality newspaper that provided government-critical information. We could add to this chain of events the take-over of  index.hu, Klubrádió deprived of its frequency, etc.

Money is also in the toolbox of the Orbán-regime. The best pretext to use it is the pandemic situation, but the main purpose is not fighting the plague, but the municipalities with opposition leaderships. The municipal elections in 2019 resulted in the take-over by the opposition of Budapest and quite a few major cities in the countryside. The government suspended parking fees the first time in April 2020, and the second time in the beginning of November 2020, and the suspension has only been ended in the end of May 2021. They were hitting two flies with one hit; Budapest residents suffered from increased traffic, air pollution, and the aggravated chaotic parking situation, while the opposition-led municipalities also lost an important part of their regular income. You should have known better whom to vote for at the municipal elections…

And knowing just a bit of Orbán’s tactics, you can be sure that it does not stop there. A recent legislative proposal was initiated by a Fidesz member of Parliament, that would oblige the municipalities to sell the municipal rental flats for a fraction of their value – between 15-30% of the market value – to the tenants, if they wish to buy the apartment.^[v] The new law will for sure pass the voting, bringing a step further the loss of municipal property.

A latest new tool for Orbán is his “magical” concept of “foundationalization”, meaning the reorganization of state universities into private foundations, promising them a better financial situation. But the state universities are being forced into foundations by a Fidesz-close curators board, whose members are nominated by Orbán. The result: even after a change of government next year at the general elections, it will be impossible, or at least very hard to reverse this process, for the state to get back ownership of the universities and give back their autonomy.

So, what about the toolset for democracy, the checks and balances on the local level? Every country has a Parliament, a prosecutor, police forces, judicial system, State Audit Office.

In Hungary, these institutions have been converted into retaliation tools ready to punish anyone expressing government-critical views, in the form of financial penalty. If an opposition member of Parliament shows to be a critical voice in Parliament, László Kövér, the speaker of the Parliament, himself also a founding member of Fidesz, punishes him or her with a huge fine to discourage any further similar action. The public prosecutor, Péter Polt, himself again a founding member of Fidesz, makes sure to disregard or at minimum to play down cases of suspected corruption. But when it comes to lighting a flare at an opposition demonstration or writing ‘free Navalny’ with  chalk on the pavement in front of the Foreign Ministry, then he strikes with the full rigor of the law to deter.

Currently Ákos Hadházy, an independent member of Parliament, is spending his sentence of public work for organizing a peaceful car demonstration last year near the prime minister’s office, even respecting the pandemic restrictions. He refused to pay the imposed fine and wanted to draw the attention to the fact that apparently the government is afraid of even such peaceful demonstrations.

The State Audit Office is also quite ingenious in finding the right targets, fining opposition parties just before the elections. In 2017, the state subsidy to the ‘Jobbik’ party was reduced by a sum of around 1,8 million euros for irregular party financing.^[vi] In Hungary there is no legal remedy against the decisions of the State Audit Office. Anyhow, Jobbik turned to the Constitutional Court with the issue, but their complaint – not so surprisingly – was rejected by the Court, whose members have been appointed by the Fidesz majority.

The EU recovery fund is an unprecedented and much needed financial package that meant a big step ahead in the federalist direction. Nevertheless, this amount of money can be seen as a double-edged sword in the hands of authoritarian leaders. Their first and foremost priority is not the betterment of the country, but their biased list of preferences. In Hungary, we see that Orbán is most interested in strengthening his grip on the country. The Hungarian government forgot to consult the stakeholders about the recovery plan, be they the municipalities or social partners, not to speak of the other political parties.

On the one hand, when it comes to money Orbán has no mercy. His first and foremost endeavor is that everybody should depend on his favors within the country. On the other hand, on the European level, he plays the heavyweight vetoer claiming a blank check and hindering all attempts at increased accountability and transparency.

Giving financial subventions to a member state is part of the toolbox of the EU, intended to serve noble purposes, namely economic convergence, modernization and the catching up of under-privileged EU member states. There is a good reason to introduce conditionality mechanisms if these purposes are endangered.

With the Hungarian federalists, we have participated in January in the UEF project with a telling title “Democracy is Europe”. The EU institutions, especially the European Commission, must live up to the expectations of the European citizens, and be inexorable with those governments who abuse the system when it comes to the basic democratic values; that title shall become a reality.

If you give somebody a hammer, you should make sure that the person will not use it for breaking the window with it.

^[i] https://www.europarl.europa.eu/news/en/press-room/20210322IPR00523/meps-ready-to-take-commission-to-court-for-failing-to-protect-eu-budget

^[ii] https://apnews.com/article/europe-viktor-orban-poland-national-elections-elections-3430a708a118fc222dbea01ce9121d22

^[iii] https://theorangefiles.hu/lorinc-meszaros/

^[iv] http://valasz.hu/data/cikk/12/6925/cikk_126925/Meszaros.pdf

^[v] https://telex.hu/gazdasag/2021/05/12/berlakasaik-eladasara-kotelezne-az-onkormanyzatokat-a-kormany

^[vi] https://merce.hu/2020/06/22/hiaba-vitte-strasbourig-a-jobbik-az-asz-birsag-ugyet/