Why Viktor Orban could be David Cameron’s new best friend

The controversial Hungarian prime minister is perfectly placed to be a bridge between Britain and Germany in EU negotiations

30 May 2015

9:00 AM

30 May 2015

9:00 AM

The Spanish, in their local elections, just elected a bunch of radicals who oppose the austerity needed to keep Spain in the euro. Poland on Monday elected a Eurosceptic challenger from the conservative Law and Justice party. And leaks from the Euro-summit suggested that David Cameron will respond to this rare combination of crisis and opportunity by demanding… well, not much in the way of reforms and concessions.

Admittedly these leaks may be feints to mislead all sides about London’s negotiating strategy. It’s early days. Nor is Poland yet a reliable ally for Britain in such negotiations: its government will be divided between a Eurosceptic president and a pro-Brussels administration until at least October. If Cameron is looking for such a partner in the meantime, he will probably turn to Hungary, which under Viktor Orban’s ‘national conservative’ government is one of the Continent’s few openly Eurosceptic powers.

To be sure, Hungary’s Euroscepticism is more ambiguous than the British variety. Hungary is committed to join the euro eventually — and always will be. It combines receipt of large subsidies from Brussels with strong resistance to federalist interventions (likely to increase when the subsidies from Brussels dry up in a few years). Above all, although Hungarian politicians share the British Eurosceptic’s visceral suspicion of Brussels, they have no interest in a Hexit.

Instead, they seek a redistribution of powers from Brussels back to national capitals. That brings Orban theoretically close to David Cameron’s supposed moderate Euroscepticism. Rumours in Budapest suggest that the two men get on; they established mutual trust in resisting Jean-Claude Juncker’s coronation as EU Commission president.

What makes Hungary an unusually influential Eurosceptic partner, however, is that the main European patrons of the Orban government include the mainstays of conservative Euro-federalism: Chancellor Angela Merkel and the German government. Merkel’s party and, even more so, Bavaria’s Christian Social Union regularly protect Orban’s Fidesz party — their partner in the European People’s Party — against itchy-fingered Eurocrats anxious to bring ‘nationalists’ to heel and the socialist left wing of the bipartisan ‘majority’ in the European parliament. CDU and EPP leaders were prominent among foreign supporters of Orban in Hungary’s local, national and European elections last year. (Hungarian flags were ubiquitous at Fidesz rallies and European flags at socialist ones; the left was routed.) This relationship remains a crucial lifeline for Orban and Fidesz in EU politics. It will be on display in Budapest next week when Orban will join in events celebrating Helmut Kohl as ‘The Chancellor of Unification’ — German and European both, apparently — on the grand old man’s 85th birthday.

Orban is therefore emerging as a diplomatic dancing partner for the two principal powers in the talks on European reform. His sympathies pull him towards London, his interests towards Berlin. He needs the trust of both. And he will inevitably come under closer scrutiny from both advocates and opponents of reform.

Orban is one of the few European politicians who might benefit from such scrutiny because his image abroad is so negative. He has been described as ‘neo-fascist’ by John McCain, denounced as ‘illiberal’ by US State Department officials, and hailed (apparently jocularly) as ‘dictator’ by Juncker. These epithets and the allegations on which they rest are either false or grotesquely exaggerated. Hungary’s lively, competitive media outlets lean rightwards but have uncovered official scandals and corruption without being closed; its elections were manifestly open and fair; the government has accepted decisions of the Constitutional Court overturning its laws and regulations; and anti-government demonstrations wind peacefully through Budapest under police protection. Such things don’t happen under neo-fascists.

My judgment might be questioned on this, since the Danube Institute, where I work, receives official funding. So let me add that the Orban government has faults. It has brought in heavy-handed restrictions on hostile NGOs and media. It is also retreating from free-market economics. The Hungarian right, like most Europeans, saw the 2008 crash as a market failure that discredited market economics. Moreover, when Orban came to power in 2010, the Hungarian socialists had bequeathed him an enormous national debt, which he believed could not be financed by another round of austerity on already burdened taxpayers. So he imposed special taxes on banks, utility companies, owners of private pensions and others with ‘deep pockets’. If this had been presented as an emergency measure in a unique crisis — which it was — it would have been reluctantly accepted by international agencies and the markets. But the Hungarians talked it up as a bold initiative in economic nationalism. Worse, the policy then began to succeed. Orban paid down the debts, emancipated Hungary from IMF/EU supervision, oversaw a modest rise in growth, and enjoyed an exchange-rate coup of Soros proportions when he compelled banks to convert mortgages denominated in foreign currencies into Hungarian forints only a month before the Swiss franc floated sharply upwards. This saved householders and banks from loss of income equal to about 2 per cent of Hungary’s GDP. Briefly, Orban became a hero of the international markets.

There are dangers in this kind of coup. Politicians who have bucked the market once are tempted to believe they have the Midas touch. The Orban government had already extended its regulatory sway over the domestic economy (Sunday retail closing, encouraging domestic ownership of banks) and foreign investment (restrictions on foreign-owned supermarkets, etc). Much of this is small‑c conservative protectionism of domestic producers on the model of UK Greens. But for a country with modest domestic capital resources, it carries a heavy risk of discouraging foreign investment. It also courts unpopularity with young and urban voters accustomed to cheap goods, convenient opening hours and weekend socialising at the shops.

Joining Cameron and Osborne in renegotiating a relationship with the EU, however, raises different risks. One major issue is off the table: Hungary, like all Central European countries, is committed to the free movement of labour within the EU, whereas controlling such movement may be the single most important goal of British Eurosceptics. Restricting immigration into Europe from Africa, Asia and the Middle East, on the other hand, is something London and Budapest have already endorsed separately. But that fends off a new threat to their sovereignty rather than reversing old ones.

Other kites flown in Whitehall are that the two governments might co-operate in strengthening the EU’s democratic procedures, seeking formal exemptions from ever-closer union, crafting a general defence of national sovereignty against Brussels, and ensuring that as non-euro countries they cannot be subject to decisions taken by the eurozone nations without their consent. These are extraordinarily modest aims, though the last is also a necessary one because Germany — the silent partner in this alliance — will make discussions on Brexit the forum for developing a stronger fiscal governance for the eurozone and the EU.

A theoretical solution has long been fairly clear: Germany would take on eurozone debts in return for subjecting the budgets of eurozone states to collective fiscal discipline. But no one has yet produced a believable mechanism for such discipline. Such a deal looks more likely to reproduce the original euro structure with even risk of future financial meltdowns. Reasonably enough, Germany will not keep taking on ever larger debts without clear safeguards. So what most people suppose to be Germany’s favoured reform, a unified euro, is a dead letter. Nor is Germany ready to reform the euro in another direction, by dividing it or leaving it, nor to go beyond the minimum needed to keep everyone inside the currency.

In short, immobilism — a strong resistance to any political change — is the underlying German policy on Europe and, indeed, on Ukraine and most other things. Its costs are borne by the unemployed of Italy (13 per cent), Portugal (14 per cent), Greece (15 per cent), and Spain (24 per cent) and by the taxpayers of northern Europe who through debt ultimately finance the transfers sent to the Mediterranean. There is no end in sight.

Europe is apparently surprised by the modesty of David Cameron’s early demands — and perhaps misled. But if those demands really are the full extent of London’s goals, then they amount to consolidating the immobilism of German policy. They don’t pretend to require treaty changes, or to offer any serious restoration of powers to Westminster, or even to revive a stagnant and discontented Europe. Does such a thin agenda need allies? Is Orban’s support necessary for it? Might he do nothing and still gain kudos with Mrs Merkel as the man who persuaded the Brits to be compliant? Or might he urge something bolder on Cameron? It would be in character and justified by the needs of Europe’s crisis.

Immobilism rules. But since it keeps producing crises and losing elections, it can’t be said to succeed.

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Show comments
  • Surmoka

    Quite good article with insight. However,
    “Hungary’s lively, competitive media outlets lean rightwards”:
    is not true. There is a left-wing majority in Hungarian media, and has always been. Orban tried and, to some extent, managed to balance it somewhat; this is why he fuelled the harsh criticism from the Left.

  • Terence Hale

    “Why Viktor Orban could be David Cameron’s new best friend”. Not only the new Polish government also.

  • Fried Ch’i

    This is ridiculous – Orban, a bridge between what?
    Orban can count himself lucky he is still tolerated and in power. How long for?

  • misomiso

    Cameron is betraying Europe and throwing away an Historic opportunity.

    Why are we not talking about FIsheries?! Why are we not talking about the CAP?

    And are we not talking about apportionment in the European Parliament?! If he reformed the institutions Europe may have a hope of dealing with the crisis rather than just melting away.

  • Orbi was widely castigated recently in the European parliament for “endangering European values.” His crime? Saying that his country thought the plan to redistribute people illegally crossing Europe’s Mediterranean border in their hundreds of thousands, across member states, was “madness.” You can see why they made, and always make an example of him. Poland, Estonia, Slovakia and then Spain, all soon chimed in with similar refusals once he had made a stand. That kind of behaviour is unacceptable. As he said recently, “the Hungarian male is not as a rule politically correct.” They say what they think.

    • Randy McDonald

      “Saying that his country thought the plan to redistribute people illegally crossing Europe’s Mediterranean border in their hundreds of thousands, across member states, was “madness.””

      Is it? Leaving the general principle aside, this could work to Hungary’s advantage if ever there was a surge of migrants across its eastern frontier.

    • ClausewitzTheMunificent

      Yes, but this completely unnecessary invasion of hapless Africans and Arabs is a useful thing for our rulers. That way they can introduce all sorts of repressive policies they could otherwise never get away with, viz “terrorism”, “extremism” and so on and so forth. It also undermines popular unity, and makes any sort of meaningful resistance hard. Divide and rule, just in a particularly callous fashion.

  • scampy

    Yes but these former soviet states are still repelling the muslim filth unlike most of EU nutters?

  • The Laughing Cavalier

    Dave has no intention of obtaining any meaningful concessions but with a nod and a wink, will persuade his opposite numbers in France and Germany to agree to a few
    cosmetic changes, he will then orchestrate some mock tough negotiations followed by the recommendation of continued membership, wording the referendum so as to predispose people to answer “Yes”. If he were serious he would examine and then demand what is really on offer http://www.dailymail.co.uk/news/article-3095556/Dave-demand-earth-Europe-s-leaders-amazed-wants-LITTLE-says-Daniel-Hannan-Conservative-MEP.html

  • @partyofengland

    What do people like Klaus, Orban and Tspsaris – politicians unafraid to want to put their own countries first – mean to ‘Europe ?’

    They mean exactly what Ireland, Denmark, Netherlands and France meant when their electorates voted no to the European Constitution.

    The revival of democratic expression.

    An expression all too often condemned as bigoted counter-revolutionary phenomena by the Euroland ideologues like Cameron and Merkel who want to suppress the very idea of national identity and replace it with multinational uniformity.

  • ClausewitzTheMunificent

    Correction: Orban actually believes in the Hungarian nation and people, and takes steps to defend their heritage and economic situation. Dave couldn’t care less about the British, never mind the the English people, and British culture and institutions.

    • Jurgen Schwarzgruber

      sucks for him though that all of hungary’s youth don’t see it that way and are escaping in numbers to Austria and Germany. The number of Hungarians that want out of the conservative paradise that you are fawning over is ridiculous.

      • ClausewitzTheMunificent

        Hey its called free movement. Don’t like it? Get out of the EU. Oh wait, that would mean a return to the Deutschmark and an end to this ridiculous bloodsucking German hemegony. Wouldn’t want that, would we?

        • Jurgen Schwarzgruber

          Couldn’t give two sh*ts, I couldn’t. whether in or out of the EU, Germany would still punch above its weight economically. Can’t say the same for countries like Hungary that are net-receivers of EU money though.

          • ClausewitzTheMunificent

            And then they say Germans are not arrogant. By shamelessly asset stripping your East German colony, you have created an economic headache for yourselves for decades to come. Enjoy!

          • Jurgen Schwarzgruber

            I guess this is the part I tell you I’m not German but I’m having so much fun watching a mor*n have fun. Please tell me more about your Germany complex.

          • ClausewitzTheMunificent

            Fine Mr. Schwarzgruber. You may not be legally a citizen of the BRD, but you are at the very least of ethnic German descent and probably an Austrian. In which case the Hungarian link would make more sense, given the close history of Austria and Hungary. I shouldn’t have made the assumption, because what I said does look rather silly from an Austrian perspective, but given that most ethnic Germans live in Germany, I don’t think it was unreasonable. I don’t have a Germany complex as much as recognize that the main threat to the independence and well-being of my country is German economic nationalism and the German state’s degree of influence over the Brussels bureaucracy, and that the BRD’s aggressive attitude to its neighbours restarted in 1990 when it swallowed East Germany: they developed an appetite for that sort of thing, and the DDR was only the starter for the buffet to come. Now, don’t misunderstand me, I have a large number of German friends, from the West (mostly oblivious) and the East, am currently studying the language out of cultural interest, but disagree with the resurgent neo-Imperialism of the “unified” Germany.

  • huw

    one of the most stupid pieces ive read this year ! incredible stuff, wrong on every point

  • Zalacain

    “The Spanish, in their local elections, just elected a bunch of radicals
    who oppose the austerity needed to keep Spain in the euro.”
    Podemos, which is the party I imagine the writer of this article is referring to got about 10% of the vote. When it is so easy to check the facts, why get them so wrong?

  • Steven

    Very good article. One comment: in Hungary, the most watched TV channels are still left leaning. The reason is that those channels have the money to have programs that attract many viewers. Remember that during the privatisation after the soviet system third of the privatised property disappeared and got to the communists. They still have it … On the net, I cannot even find anything else than “left”. index.hu, origo.hu, 444.hu are all politically very strongly correct, left or even extreme left/liberal in Western-European sense. E.g., origo.hu has recently explained that there are many immigrants from Africa, and the European countries are all competing to have them. So we should not be left out either, and get as many people as we can. This was the presentation of the recent crisis due to mass immigration… So there is nothing like a “right-leaning” media.

  • sitetrailadmin

    The UK is responsible for the migrant crisis and now they want to leave the EU to solve the problem. Let them all go to the UK and live off tax payer money. Hungary is not responsible – and should not have to take in refugees like the UK.

    Cameron supplied weapons to terrorists – let him have the migrants and put them in homes with conservatives.