Any New Year’s resolutions, Mr Orbán?

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Hungarian businesses are increasingly concerned that Viktor Orbán's xenophobia is hurting the country's economy. [EPP/Flickr]

Old tricks die hard in the European Union’s ‘rogue state’, but the West must acknowledge its hand in fuelling the political decline in Hungary, writes Juan Garcia. 

Juan Garcia writes for the Centre for Media Transparency.

If anyone thought 2016 would bring with it a change in approach by Hungary’s ruling Fidesz party, they were sadly mistaken.

The arrival of the New Year in Hungary has been marked by surging public discontent and street protests opposing proposed constitutional amendments that would provide the government with sweeping anti-terror powers.

Draft proposals leaked to the media suggest the government is seeking to amend the constitution by creating a new category of emergency: a ‘terror threat situation’, which, if declared, would enable it to issue decrees, suspend certain laws, and modify others.

Among the 30 or so proposed changes are increases to controls on the Internet, alterations to the rules governing the domestic deployment of the army, the closure of borders, and the imposition of curfews in areas affected by a terrorist threat.

Critics, including several opposition parties and civil rights groups, describe the vaguely defined ‘terror threat’ legislation as a thinly veiled attempt by the government to clamp down on civil liberties.

Unfortunately, these latest proposals represent the continuation of a longer term trend that has seen the gradual erosion of civil liberties under Victor Orbán’s premiership.

The motivations for the ruling Fidesz Party’s authoritarian approach are complex, but one factor is undoubtedly the volatile and turbulent shifts the country’s political landscape has witnessed since the fall of Communist rule in 1989. Viktor Orbán is the country’s only post-Communist prime minister to complete an entire mandate and be re-elected.

Part of this political turbulence can be attributed to the economic uncertainty the country experienced following the collapse of Communism. As with the USSR and other Soviet satellite states, the collapse of the Communist regime in Hungary left a void in terms of institutional infrastructure and regulatory oversight.

This vacuum created a ‘Wild West’ that offered fertile ground for wealthy individuals and speculators keen to exploit the absence of effective regulatory oversight and plunder the region’s resources. Hungary was no exception.

Russia’s infamous ‘oligarchs’, who were quick to capitalise on the wealth of opportunities created by the collapse of Communism, are now well known. Less well documented are the Western entrepreneurs who also flocked to the region.

One of the most notable is Ronald Lauder, the son of Hungarian Jewish immigrant Estée Lauder, who successfully founded the family beauty products empire. Lauder’s older brother, Leonard, assumed the helm of the company when their father, Joseph, died in 1983. Leonard subsequently took the company public, making him and his brother billionaires.

Seemingly lacking the business acumen of his brother, Ronald was keen to emulate his family’s success. Following a failed run for New York’s mayorship, which culminated in his ignominious failure to secure the Republican nomination in 1989, in 1994 Lauder presumably spotted his chance: his moment to step out of the shadow of his successful family, to come back from the debacle of the New York mayoral race and establish his own identity.

Ronald set about establishing a string of commercial media and entertainment ventures across the former Eastern bloc. But it all began to unravel when it was revealed that a US attorney was investigating Lauder’s television holding company, Central European Media Enterprises (CME), over allegations that the company had bribed state officials in Ukraine.

Perhaps most notable, though were the media mogul’s dealings in Hungary. In 1996, Lauder was sued by his former business partner, Seymour Holtzman, for wrongful termination of their joint venture.

Holtzman alleged that Lauder had forced him out of their partnership in the Central European Development Corporation, the company he’d formed in Hungary in 1989.

Describing Lauder, Holtzman explained to the Wall Street Journal that “[Lauder] is mean-spirited …. He thinks he’s above everyone else.” The matter was eventually settled in court for an undisclosed sum.

But the Holtzman case was nothing compared to what was to come. In 1997, Perekhid Media, a Western-owned rival in Ukraine, brought a suit against Lauder and CME in New York, claiming that CME had bribed Ukrainian officials, essentially to snatch from Perekhid a license which the company had obtained in 1993. Mr. Lauder had subsequently started a station there using that license, called Studio 1+1.

These questionable, some might say nefarious business dealings by Western ‘entrepreneurs’ help to demonstrate the aggressive business practices pursued by individuals across the Eastern bloc following the collapse of cCommunism, and help to illustrate how the economic turmoil fuelled by the West has helped foster a culture of paranoia and an eagerness to hold on to power among Hungary’s political elite. 

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