EU country briefing: Hungary

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The following article is a part of a series of brief country profiles for the EU-28 ahead of the European elections in May.

Hungary became part of the EU during the 2004 “big bang” enlargement. The country is also a member of the Visegrád Group, a Central European cultural and political alliance, along with Poland, Slovakia and the Czech Republic.

Hungary’s population was 9.8 million in 2017, corresponding to 2.2% of the EU’s total population without the UK. Several million Hungarians also live in neighbouring countries, including some 1.2 million in Romania, half a million in Slovakia, over a quarter of million in Serbia and over 150,000 in Ukraine.

In this year’s European Parliament (EP) elections, 21 Members of the European Parliament (MEPs) are to be elected by Hungary, 3% of the total (minus UK).

Just over a quarter of Hungarian voters (28.9%) turned out to vote during the last EP elections in 2014, way below the EU average of 42.6%. Despite this low enthusiasm, most people (60%) do consider the EU to be a good thing, whereas just 7% consider it a bad thing, which is comparable to the EU average (62/11).

Moreover, 81% of Hungarian citizens feel like citizens of the EU. While the country has been part of the Schengen area since 2007, the current government has no concrete plans for adopting the Euro. A majority of Hungarians (53%) are in favour of the common currency, while 43% are against. Hungary’s accession treaty obliges the country to adopt the common EU currency but sets no deadline.

Economy

Hungary’s economy has picked up in recent years, after having gone through several tough austerity measures and economic reforms since the financial crisis in 2008. The average annual real GDP growth was a solid 3.8% between 2014-2018, way above the EU average (2.1%). This includes peaks of 4.1% and 4.9% in 2017 and 2018.

Recent autumn and winter forecasts of the European Commission (EC) confirm that the upswing in the economy will continue, albeit at a reduced rate of 3.4% and 2.6% in 2019 and 2020 respectively. Increasing labour shortages are also constraining economic expansion.

Hungary’s total GDP was 124 billion in 2017, which is almost 1% of total EU GDP post-Brexit. Per capita, real GDP was €11,800 in 2017, which is less than half the €27,700 EU28 average. In purchasing power standards (PPS), this corresponds to 68% of the EU28 average.

Almost 1 in 3 people in Hungary face poverty in the country, which has one of the highest social and material deprivation rates in the EU, after Bulgaria, Romania and Greece.

Whereas Hungary’s unemployment was above the EU28 average at the beginning of this century, it is now one of the lowest in the EU, standing at 3.7% in 2018, which is almost half the EU28 average of 7%. Moreover, at 10.2%, the youth unemployment rate was below the EU28 average of 15.6% in the same year.

Political context and direction

Hungary was at the forefront of the end of communism, when the Iron Curtain fell on 27 June 1989, with foreign ministers of Austria and Hungary symbolically cutting the barbed wire that had separated their countries for decades.

In the same year, the country transitioned from a communist party rule to democracy after its constitution was heavily amended in 1989 and democratic elections took place in 1990. Since then, Hungary has been a democratic republic with a unicameral Parliament.

However, many constitutional amendments enacted since the conservative Fidesz-KDNP party alliance won parliamentary elections in 2010 have led to a democratic backslide.

In today’s Hungary, almost all power is wielded by the prime minister and Fidesz political leader, Viktor Orbán (a former liberal), as the country effectively moves towards a one-party state and Orbán becomes a de facto strongman.

Fidesz is affiliated to the European Peoples’ Party (EPP), the centre-right political family. It is the country’s undisputed dominant political force, having ruled from 2010 onwards, mostly with a two-thirds majority in Parliament, and previously in a coalition in 1998-2002. Meanwhile, the opposition remains fragmented.

The social-democrat MSZP, which succeeded the communist party, used to be one of the dominant political parties before its downfall in 2010. MSZP had managed to win several elections in the past and was able to govern in 1994-1998 as well as in 2002-2010.

However, the MSZP fell from grace after a controversial speech was leaked, containing vulgar language and confessions by then MSZP leader and Prime Minister Ferenc Gyurcsány that his political party had lied “in the morning, in the evening and at night” to win the elections.

Subsequent government instability, corruption scandals and a worsening economic situation provided fertile ground for opposition parties, most of all Fidesz-KDNP, which made breakthroughs in 2009’s EP elections and 2010’s national parliament elections.

2009 and 2010 marked the downfall of the MSZP, but also of the remaining liberal party, the struggling SZDSZ. While it used to be an important political force in the early 1990s, it was subsequently wiped away and lost parliamentary representation.

The ultra-nationalist Jobbik, created in 2003, managed to break through in the 2010 elections and become the country’s third political force. It has at times used very anti-Semitic rhetoric and was also against the Roma minority.

Moreover, Jobbik and Fidesz-KDNP have used irredentist rhetoric harking back to the 1920 Treaty of Trianon, under which the former Kingdom of Hungary lost 72% of its territory. It was not possible to discuss the treaty openly until after the Cold War.

These historical sensitivities still play a role in the country’s politics, and have led to a politicisation of the country’s diaspora in Romania, Slovakia, Serbia and Ukraine (where more than two million Hungarians live), through favourable dual citizenship laws, language policies and the right to vote in Hungary’s elections. This has at times led to tense relations with those countries.

Fidesz has shifted further right over time, adopting much of Jobbik’s rhetoric. Consequently, Jobbik has toned down its far-right rhetoric since 2014 in a bid to compete. As of 2018, Jobbik is the country’s second political force, although it lags far behind the ruling Fidesz-KDNP.

However, the distance in support for Fidesz-KDNP and the two second-tier competitors, Jobbik and MSZP, has only increased over time. This is in part due to the blurred lines between the state and Orban’s party, which has created an unequal platform for political competition.

Over time, Hungary’s policies have largely undermined or silenced potential critics, including journalists, opposition groups, universities and NGOs. Around 90% of Hungary’s media have direct or indirect links with Orbán’s government.

The continuing backslide in democracy has also led to Freedom House classifying the country as just “partly free”.

Of all EU members, Hungary has the worst press freedom after Bulgaria, according to Reporters without Borders. Moreover, the country also ranks as the second most corrupt, better than Bulgaria but worse than Romania (which like Bulgaria, is under EU supervision under the so-called Cooperation and Verification Mechanism).

Last year, these developments prompted the EP to call upon the European Commission to trigger Article 7 of the Treaty on the European Union and suspend Hungary’s voting rights in the Council of the EU for its violation of democracy and the rule of law. The European People’s Party (EPP) then suspended Fidesz’s membership for the same reasons.

Orbán has continued to pick fights with EU institutions, notably the European Commission (against which he has launched many negative government-financed campaigns), as well as other EU states on several dossiers, including the rule of law and migration.

Amidst the European migrant crisis, the country angered many of its neighbours by building a wall on its borders. By doing so, it has often frustrated and undermined a European solution, having dubbed EU attempts at a joint solution as ‘Sovietisation’.

The state’s links with Russia have also led to concerns over Hungary’s continued allegiance with the West.

Nonetheless, Orbán’s position remains unchallenged in the country, despite recent protests over the introduction of the so-called ‘slave law’, which increased the permitted amount of overtime hours.

While this offered the opposition some brief momentum, protests appear to have run out of steam, much like protests over the closure of the Central European University and the so-called ‘anti-Soros’ law, enacted although Orban himself had been a beneficiary of a scholarship by Hungarian-born billionaire and philanthropist George Soros, in the 1980s.

The opposition’s fragmentation since 2010 goes a long way in explaining Fidesz-KDNP’s dominance. Electoral alliances of opposition parties have proven ephemeral (in 2018’s elections, an opposition alliance was not even formed). This year’s European elections are unlikely to prove any different.

The country could see an even more undemocratic and Eurosceptic turn after the European elections, if it chose to leave the EPP and either join or form a new Eurosceptic grouping with other parties, as the EPP would no longer have the ability to restrain the party (although the EPP has been criticised precisely for its soft touch).

Predictions

Most recent projections suggest Orbán’s Fidesz-KDNP will comfortably win the elections with over 50% of the votes. This would result in 12-13 MEP seats for the European People’s Party (EPP), although it cannot be excluded that the party would join another group after the elections.

Those vying for the second spot (albeit trailing far behind), include both Jobbik and the MSZP, which currently poll between 11-14% in various polls. This could result in 3 MEPs for each. In the case of MSZP, these would go to the Progressive Alliance of Socialists and Democrats (S&D). Jobbik does not currently belong to any European political grouping.

The last party with a chance of gaining seats is the social liberal DK, led by former Prime Minister Ferenc Gyurcsány. It could potentially gain 2 MEPs for the S&D.

Three parties that poll below the electoral threshold of 5% might possibly have a chance of securing an MEP: the green LMP, followed by the social-liberal Momentum (MM) and the satire Two-tailed Dog Party (MKKP).

Finally, it cannot be ruled out that the new ultra-nationalist ”Our Homeland Movement will pass the electoral threshold. The party is composed of former Jobbik members who disagree with the party’s more moderate strategy.

In any case, the authoritarian policies of Orbán and his growing one-party state control of Hungary seem set to continue, as well as increased corruption and deteriorating press freedom, as Fidesz-KDNP extends its reign with few checks and balances.

Robert Steenland works as an evaluation and research consultant in EU policies, as well as an analyst in EU politics.  He holds a double degree master in European Governance.

Daniel Matthews-Ferrero is a Marie Curie PhD researcher in the POLITICO programme at the University of Aberdeen, focusing on contemporary Western European populism. He holds a Master’s degree in European Interdisciplinary Studies from the College of Europe.

Pablo Ribera Payá is a PhD candidate in European Studies at Masaryk University and works in EU policy analysis and communication. He holds a double degree master in European Governance.

[Edited by Georgi Gotev]

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