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Title
Hungary: The Rise of the Right
Teaser
Right-wing nationalist parties did well in the first round of Hungary's
parliamentary elections, which could signal the beginning of the rise
of nationalism in Eastern and Central Europe.
Summary
In the first round of Hungary's general elections, the center-right
Fidesz party won a major victory while the far-right nationalist, openly
anti-Semitic Jobbik also did well. The positive showing of Hungary's
nationalist parties will have regional geopolitical consequences, and
could point to a trend in electoral success for far-right European
parties.
Analysis
Hungary’s center-right Fidesz party won a major victory on April 11 in
the first round of the general elections, giving its leader Viktor Orban
the premiership eight years after his defeat by the Socialist party.
Fidesz claimed 206 out of the 386 seats by winning 52.7 percent of
the vote in the Hungarian Parliament. Center-left Socialists claimed
28 seats by garnering 19.3 percent of the vote, the far-right nationalist
Jobbik claimed 26 seats by garnering 16.7 percent of the vote and
the liberal Politics Can be Different (LMP) party won 5 seats by
garnering 7.5 percent of the vote. The remaining 121 parliament
seats will be decided April 25 in runoffs of districts in which no
candidate gained a majority. This will give Fidesz a chance to reach a
255-seat two-thirds majority, which will give the party the ability to
change the constitution and enact sweeping structural economic
reforms.
The election of Fidesz gives Hungary its first non-coalition
government since the end of the Cold War. We at STRATFOR also
believe this is one of very few instances in post-WWII European
history of a freely elected democratic party winning a two-thirds
majority rule in parliament. This will have implications for the
Hungarian economy as well as Hungary's regional geopolitical
dynamic. However, the election also points to a trend of electoral
success for far-right parties in Europe, with anti-Semitic, anti-Roma
Jobbik sweeping into parliament with a sizeable seat count.
Domestic Repercussions
Fidesz's electoral success is not surprising. The fall of the previously
governing Socialists began with an incident in 2006 that involved then
Prime Minister Ferenc Gyrucsany being caught on tape saying that
the government had been lying to the nation (LINK:
http://www.stratfor.com/hungary_unrest_and_gyurcsanys_strengthen
ed_hand) about Hungary’s economy, and that it had done nothing
notable during its four-year rule. The incident led to a week of riots,
(LINK:
http://www.stratfor.com/hungary_political_violence_and_stability)
which eventually culminated in an intense clash on the 50th
anniversary of the 1956 Hungarian Revolution, leading to over 120
injured.
Gyrucsany survived the incident, but the Socialist party's popularity
did not. Ultimately, the financial crisis in March 2009 forced
Gyrucsany to resign (LINK:
http://www.stratfor.com/analysis/20090323_hungary_pm_resigns)
The Hungarian economy (LINK:
http://www.stratfor.com/analysis/20081015_hungary_hints_wider_eur
opean_crisis) fell victim to its over-reliance on foreign credit, and was
one of the first -- and worst -- hit by the global financial crisis that
intensified in August 2008. During the boom years, Hungary -- like
many Central Eastern European (CEE) countries (LINK:
http://www.stratfor.com/analysis/20090801_recession_central_europ
e_part_1_armageddon_averted) -- experienced robust economic
growth. Local subsidiaries of foreign-owned banks provided the
Hungarian economy with cheap, foreign currency denominated loans
(mostly in Swiss francs). The introduction of this credit sent
Hungarian consumer demand skyward, and had a similar effect on
public and private sector indebtedness. But when the onset of the
financial crisis intensified in late 2008, (LINK:
http://www.stratfor.com/analysis/20081029_hungary_just_first_fall)
the tide of liquidity and credit that had hitherto financed economic
expansion began to ebb. Liquidity evaporated, credit vanished and
capital sought safe haven in less risky assets. As capital fled from
emerging markets to stability, countries that had relied on external
capital saw their currencies depreciate precipitously. From August
2008 to March 2009, the Hungarian forint weakened by about 26
percent against the euro, and 34 percent against the Swiss franc,
increasing the real value of the public and private sectors' foreign
currency denominated debts proportionally.
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Hungary was the first European country to seek a bailout from the
IMF, which agreed to co-finance a 20 billion euro loan by the EU and
the World Bank. While the Hungarian economy appears to have
stabilized, Hungary's large stock of foreign currency denominated
debt (LINK:
http://www.stratfor.com/analysis/20090804_recession_central_europ
e_part_2_country_country) -- nearly 70 percent of the country's total
bank loans -- means that it is still vulnerable, especially to anything
that could weaken the Hungarian forint.
If Fidesz can score another victory in the second round and claim a
two-thirds majority April 25, it will firmly control of the government.
The lack of opposition would enable the Fidesz government to
undertake and implement the structural reforms necessary to rebalance the Hungarian economy, which contracted a massive 6.3
percent in 2009. Fidesz plans to try to renegotiate the IMF-EUimposed target of 3.8 percent budget deficit for 2010, and to cut taxes
and public sector jobs.
Regional Implications
The return of Fidesz puts a center-right nationalist party back in
power in Budapest. This is a worrying sign for its neighbors -particularly Romania, Slovakia, Croatia, Ukraine and Serbia -- and
their significant Hungarian minorities. For Fidesz, nationalism is not
just rhetoric, it is a policy tool used to expand Hungary’s influence in
the region. Last time Fidesz was in power, then Prime Minister Viktor
Orban pushed through a controversial law giving Hungarian
minorities in neighboring countries health, education and labor
benefits. In fact, Hungary’s regional nationalist rhetoric was so
powerful during Orban’s last go around that the EU decided to scale
back its emphasis on a regionally focused policy; Budapest was
simply taking the policy too far to try to dominate its neighbors. This
time around, Fidesz may try to go one step further and extend
citizenship to these Hungarian minorities.
Whether the EU and Hungary’s neighbors like it or not, the 47- yearold Orban is here to stay. He has an enormous mandate behind him,
and Hungary is an EU member state, which means the EU cannot
pressure Budapest in any way to reduce its nationalist policies. At the
very least, Brussels and Hungary’s neighbors should be glad they are
dealing with Fidesz alone and not with Jobbik, the anti-Semitic, antiRoma far-right party that has links to the neo-fascist Magyar Garda
("Hungarian Guard"), a militant nationalist movement that preaches
(and practices) violence against minorities.
Election of Jobbik points to a recent trend -- confirmed by the 2009
European Parliament elections -- of increased electoral success of
far-right nationalist parties. While this is not a new phenomenon -Europe’s electorates often turn far right during times of economic
crisis -- it is one that is especially strong in Central Eastern Europe.
Nationalist parties -- even as far right as Jobbik -- consistently have
had electoral success in Europe, even when the continent's economy
was not experiencing a recession. Membership in the EU has not
suppressed the nationalist impulse. In fact, it has often given it a
target and a platform from which to espouse nationalist rhetoric.
Specifically, the EU Parliament (LINK:
http://www.stratfor.com/analysis/20090608_eu_european_parliament
_elections) has a number of far-right parliamentarians that enjoy
lambasting the EU institutions from within. Nonetheless, most elites in
the EU have eschewed strong nationalism because the benefits of
EU membership have thus far exceeded the benefits of populist,
nationalist rhetoric.
However, if the 2008 economic crisis has revealed one thing, it is that
nationalism is slowly becoming politically convenient, and a
successful -- if not necessary -- strategy. First, the legitimacy of the
EU is shaken, especially by its handling of the Greek economic crisis
(LINK:
http://www.stratfor.com/analysis/20100402_eu_consequences_greec
e_intervention). Second, countries all over Europe are taking cues
from a suddenly “normal” Germany (LINK:
http://www.stratfor.com/geopolitical_diary/20100406_opposing_intere
sts_uk_and_germany) that has been looking to further its own
interests at the expense of European unity, especially during the
aforementioned Greek crisis. It is therefore no surprise that in
countries like Hungary -- and many others -- nationalist parties will
strengthen while traditional center-right parties adopt a more firmly
nationalist policies and rhetoric. We are witnessing a process in
which the elite -- once happily co-opted by EU solidarity -- turns
toward nationalism.
One thing to note about Central Eastern Europe specifically,
however, is that nationalism -- and to an extent far-right nationalism -as an ideology does not have the same taboos associated with it as it
does in Western Europe. It was, after all, nationalism espoused by
anti-communist intellectuals and activists such as Vaclav Havel and
Lech Walesa that led to the region’s liberation from communism.
Many of the same politicians that resented Moscow’s domination
have today evolved into eurosceptics wary of Brussels’ growing
control. Furthermore, the region is not as sensitive about confronting
and addressing the apparent injustices of the previous wars -- which
were particularly territorial in Hungary’s case -- as the West since
peace was largely imposed on the region by invading Soviet armies.
We therefore expect Fidesz's election to raise tensions in the region
and spur Hungary's neighbors to respond by upping their nationalist
rhetoric in kind.