Hungary: Towards bankruptcy and dictatorship?

Hungary has been more in the international media recently, both because of its right wing government’s policies and due to the country’s economic crisis which is another threat to the stability of the euro.

Although the country itself, while in the EU, is not part of the eurozone, the euro dropped on the currency markets following reports about Hungary’s economic problems.

The danger for the eurozone lies in big investments and high loans given by European, especially Austrian, German and Swiss, banks which tangle them up in the Hungarian crisis. It is especially problematic that most of these loans are foreign currency loans. During this crisis the Hungarian currency has been continuously devalued, which makes repaying these loans in euros or Swiss Francs almost impossible. But this is not just about loans for the state or to businesses. Private households are hit especially hard. When the Hungarian currency was stronger, many banks gave out Euro or Swiss Franc loans which cannot now be repaid. Many households face insolvency. Since January 11, the Hungarian government, IMF and EU have been negotiating a bailout package, using Greece as an example.

The populist right-wing conservative Fidesz government under Victor Orbán has attempted everything to stop this from happening. The paying out of a bailout package decided on back in 2008 was stopped in 2010. The then newly elected Orbán government resisted some of the orders from the EU and the IMF. They introduced a weak tax on the banks and a “crisis tax” instead, which especially hit foreign businesses. These tax measures do not make Orbán a “left”. Rather it was an attempt both to defend the national interests of the weak Hungarian ruling class and to avoid immediately confronting those who had voted for Fidesz. The Fidesz government tried to maintain its popular support, including amongst some workers, by hitting the rich every now and then. But this did not change its capitalist character or maintain its popularity. Thus, the bank tax was followed by tax presents for the rich in order to “make everything good again”. The alliance between Orbán and the capitalists is unbroken, and Fidesz’s support amongst Hungarians is rapidly falling.

Following this, Orbán attempted to use his two-thirds majority in parliament to push through brutal austerity measures, like those enforced in Greece by the EU, ECB and IMF troika, on a nationalist basis. Extreme attacks on workers’ rights, pensions, health and social care, the unemployed and other areas were framed by massive racist propaganda. For example, when employment protection was effectively abolished, this was justified by blaming allegedly “lazy Roma” for crippling the economy. Also, the newly introduced proposal to detain the jobless in “container parks”, with security personnel to guard them, was presented as a “security measure” against Roma.

There is of course resistance against these measures, although without a clear political voice. Fidesz itself had a weak base. While winning nearly 53% of the vote in the 2010 election this was not an enthusiastic mandate as under 47% of the electorate actually turned out to vote. Parliamentary opposition, on the one hand, consists of the former Stalinist, now social democratic, ‘Socialist’ party (MszP) and the green liberal ‘Politics Can be Different’ (LMP). The MszP is discredited for having been in the preceding government before the current one, and has not recovered from the scandal when, shortly after winning the 2006 elections, a recording of the then MszP Prime Minister, Gyurcsány, surfaced in which he admitted to a private party meeting that "we have obviously been lying for the last one and a half to two years." Neither ‘opposition’ party presents a pole of attraction for the angry masses.

Neo-fascists’ support stable

On the other side, is the neo-fascist Jobbik party. During social unrest in 2006, it was able to play a strong role in the movement. Tens of thousands marched for a “national Hungary” and fought street battles with the police. They even used a captured tank and occupied the national television centre. Leftists, homosexuals, Jews and other minorities had to hide or flee Budapest. Some spoke about this being an attempted coup by Jobbik.

Unfortunately many Hungarians see Jobbik as the most credible opposition force, although its programme is on many major points the same as that of the governing Fidesz party. It pretends to be “anti- capitalist” but blames “international Jewish forces” for capitalism and the crisis. Currently Jobbik is not a real danger for the government. But it is a danger for real oppositionists and minorities in the country. It terrorises its enemies through its re-formed “Garda” paramilitary force and other thugs. In some areas, these even play the role of an “auxiliary police” force. At the request of right wing local government officials, they carry out their terror as an “official” mission. The Roma people, over 6% of the population, have already been driven out of some villages.

Popular opposition mounts

Most trade unions did not mount much notable resistance against the brutal government attacks so far. Most of them are affiliated to the ‘social democratic’ MszP. The public sector unions are a great exception to this. After attacks on wages and jobs, there were strikes by firefighters and police officers. At a later stage, there were also warning strikes by bus and railway workers against attacks on pensions and early retirement schemes which have been all but abolished by the government. The Jobbik police trade union, which organises at least 10% of the police force, “prepared for action” but did not participate in the strike and was consciously excluded from the action by other unions.

The government tried to prevent such events by attacking democratic rights fought for by previous generations and attempting to drive trade unions out of the public sector.

The new media law made the news headlines outside Hungary and provoked international protests. Already the government is censoring the media. On January 2 the state-run TV channel positioned its reporter covering the mass protest against Orbán’s new constitution in one of the few places where no protesters could be seen. The new law allowed a new commission to prevent the publication of critical reports and to hand out high sentences to the opposition media. These passages of the new law were recently removed by the constitutional court. This shows that, despite everything, there are sections of the establishment in Hungary which are opposed to Fidesz’s steps towards authoritarian and dictatorial rule.

However, government measures were taken against these “rebellious” constitutional judges. As a first step, the government created “cardinal laws” separate from the Constitution. These are binding without being subject to control by the constitutional court whose members are elected for life by parliament. Instead, these laws are watched over by a new council of guards called the “Curia” of which the constitutional judges are only one group of members.

The president of the constitutional court who is close to the MszP was forced to resign. He is likely to be replaced by a government loyalist.

Authoritarian and nationalist new constitution

The implications of the new Constitution which came into effect on 1 January go much deeper. A council of central bankers is now able to dissolve parliament if it agrees “measures which endanger the budget”. This council is packed with Fidesz members. Other public offices were also packed with Fidesz and, in some instances, Jobbik members in this aggressive way. This gives Orbán the opportunity to keep power even if losing an election and to install elements of dictatorship into the government. Whether he uses them depends on many factors, especially the development of the economic crisis and the resistance of the Hungarian working class.

The government is increasingly encouraging and exploiting Hungarian nationalism. The word “republic” has been deleted from the new constitution as Fidesz wanted it to embrace Hungarians in general and not just the existing state. This was made explicit by the new constitution’s inclusion of references to ethnic Hungarians living outside the borders imposed in 1919 by the victors in the First World War. Recently the Christian Democrat Deputy Prime Minister, Zsolt Semjen, explained to a meeting of ethnic Hungarians in Vienna that making citizenship available to all ethnic Hungarians internationally enhances the legal unity of the nation and therefore the survival of Hungarians. He said that a “stronger impulse” is needed to stop the accelerated assimilation of ethnic Hungarians abroad which involves granting citizenship and voting rights in Hungary.

Opposition undermines Fidesz’s support

But there is resistance. In 2011, there was a wave of demonstrations and strikes. On 2 January, there was a new highpoint with over 50,000 people taking to the streets against the new constitution. One reason for this massive participation can be found in the anger created by the mass deprivation caused by Orbán’s reforms. This could already be seen in earlier demonstrations, for example for press freedom, where social issues were always present in the background. The anger is shown in opinion polls, where by January 2012 Fidesz’s support had dropped to 14%, compared with the near 53% it won, together with the small Christian Democrats, in 2010. At the same time, only 40% say that they want to vote at all, also less than in 2010. Why should they? Important ‘parliamentary tasks’ are given to non-elected bodies.

The established parties show no fundamental alternative to Orbán’s austerity measures. Nearly 60% of Hungarians currently say they support no party. The MszP registered only 11% support, while the LMP scored just 4%. The Democratic Coalition, a split from the MszP, led by the ex-prime minister, Gyurcsány, was up until now, unable to fill this gap and registers around 2%. At the same time, Jobbik enjoys stability in the polls, getting up to 20%. But when neo-fascists appeared on the demonstration on 2 January, they were chased away by people shouting “Nazis out”!

The new protest movement brings with it possible beginnings for new left wing parties. At the beginning, mainly students and a few angry citizens took to the streets. The working class is participating in protests since 2011 and has started to make its mark on the movement. Trade unions participated in the demonstration on 2 January. This shows the pressure from the membership on the leaders and is a good sign!

New movements and parties

CWI activists report that, among many other structures, two initiatives especially have started to move on from being loose movements towards forming political parties. One formation is called Szolidaritas. The name refers to the Polish Solidarność trade union. This shows the party’s trade union origins on the one hand but also reflects that the party’s programme remains on a capitalist basis.

The second formation is called 4K! (Fourth Republic Movement), that was launched towards the end of 2011 and plans to hold its first congress in May. Up to now it is a small, loose oppositional grouping mainly existing on the internet. But with the big protests it became a pole of attraction for many on the left in Hungary. Its political profile is as yet unclear, however it too mainly deals with questions of democratic rights.

The time is right for forming a left wing, fighting party for workers, the unemployed and the youth. It could ensure that the current protest movement does not end up fading away. To be successful such a new party’s programme is important in two ways. On the one hand there is a need for concrete proposals on how the movement could develop. Strikes would be an instrument hitting the government at an especially weak spot. The government would be forced to openly choose the side of big business. Involving the Roma organisations in a new party and protests is also important. Overcoming the racist divide is a key for the battle against Fidesz and Jobbik.

Even more important are the demands such a new party would have to carry into the movement. The reduction of democratic rights and the racist baiting against the Roma are only symptoms of the radical attacks on wages, the welfare state and the living conditions which working people previously been fought for. There is a need for a programme against the crisis, not just against Orbán. In short, there is a need for a clear anti-capitalist programme!

Many people in Hungary have already lost all hope for a future within capitalism. Some have nostalgic memories of the so-called “Goulash communism” which existed up to 1989, the planned economy that at least provided social security but, ruled by an authoritarian Stalinist elite, had no real democratic rights. But young people especially do not go along with this and older people do not really want a return to this past. But many are searching for other alternatives to capitalism. A new party, armed with the idea of real, democratic socialism could be very successful.

With a clear programme and strategy strikes and other mass actions would also increase the confidence of workers and the trade unions. Prepared in this way the working class could proceed to bring down the government, having a real alternative on offer to the vast majority alienated from the existing parties!

Special financial appeal to all readers of

Support building alternative socialist media provides a unique analysis and perspective of world events. also plays a crucial role in building the struggle for socialism across all continents. Capitalism has failed! Assist us to build the fight-back and prepare for the stormy period of class struggles ahead.
Please make a donation to help us reach more readers and to widen our socialist campaigning work across the world.

Donate via Paypal

Liked this article? We need your support to improve our work. Please become a Patron! and support our work
Become a patron at Patreon!

Be the first to comment

Leave a Reply

Your email address will not be published.


March 2012