The position of Fidesz - Hungarian Civic union on the recent crisis and change of government
Dátum: 2004-10-05 17:25:00, eredeti URL: http://archiv.fidesz.hu/index.php?Cikk=27919
KCMDB-be feltöltve: 2024-05-04 20:32:19.944470, Feltöltő: fidesz_hu_scraper_v2
Failed policies, failed government
Since the fall of communism, Hungary has been a symbol of political stability and predictability in Central and Eastern Europe. This reputation was mostly due to the fact that, uniquely in the region, all successive governments so far have served their full four-year terms.
This reputation is now a thing of the past. Since 1990, the government of Mr Péter Medgyessy has been the first to fall early. The non-fulfillment of election promises related to the slogan of "welfare transition", corruption scandals and the loss of credibility have led to a loss of popular confidence and defeat at the June 2004 European Elections, which Fidesz won by a landslide.
The election results and the loss of popularity triggered an internal fight within the coalition which also reached the prime minister. The socialists have realised that they are unable to fight the 2006 election campaign with Mr Medgyessy. With this in mind, they "sacked" their prime minister in a not-too-elegant manner, making him a scapegoat for the failures. They found a replacement in the person of Mr Ferenc Gyurcsány, a former communist youth politician and socialist tycoon, who is promising a new start and new dynamism. Nevertheless, Mr Gyurcsány himself has been a member of the failed government (as minister of youth and sports) and he acted as a strategic adviser to the prime minister in the 2002 campaign and in government. Therefore, any talk of a "new start" may hardly be interpreted as a genuine one.
The new cabinet programme: populist slogans and coercion course
Although he had been a member of the Medgyessy-government for more than a year, Mr Gyurcsány's cabinet activity is difficult to evaluate with a view to his future plans. (A telling episode about his record is that Mr Gyurcsány immediately disbanded his former ministry upon taking office as prime minister.) It is not clear what policies he intends to pursue as prime minister: his statements and the government programme he introduced are impossible to draw conclusions from. In order to cover up the failure of the Medgyessy-cabinet and the desperate situation of the central budget (which presents the government with zero room for manoeuvre) the programme uses a language of contradictions with frequent references to "continutity" and "new momentum" at the same time, dropping most of the concrete commitments made by the previous government (e.g. highway constructions). The programme, titled "Hungary is in a Momentum", is a haphazard collection of vague and populist promises and empty PR-slogans that are in stark contrast with budget reality and the practice of the past two years: "just government", a "fairer redistribution of the common wealth" and an "outreach to the poor" is siding with commitments on a strong economy, stable growth, easing the burden on business, new jobs, stable equilibrium numbers, decreased budget deficit and state debt. In reality, "Momentum" has meant two years of drifting policy, growing inflation and state debt, rising taxes for the business sector, an inflating public sector, bankrupted local councils, fleeing foreign capital, government overspending, insincere talk and unkept deficit prognoses.
A drifting economy
Although projected economic growth for this year (4,1 %) seems to be progressing as compared to last year (2,9 %), its consumption-generated structure and the general equilibrium numbers (like current account deficit) continues to be problematic. As a result of increasing taxes, following a multi-year downward tendency, inflation is on the rise again, reaching 7,1 percent in the first half of 2004 (4,7 percent in 2003). The government has introduced twenty-two cases of tax increases on enterprises in the last two years and further are on the way envisaged for 2005. New jobs have meant 30,000 new jobs in the public sector, further burdening expenditures. In two years, Hungary's image as a front-runner among Central European countries has changed to one of a drifting economy lagging behind, both in terms of the Euro convergency course and competitiveness. The image of Hungary in the eyes of foreign investors is best characterised by the indicator of foreign direct investment (FDI). As compared to the first quarter of 2002, the last year of the Fidesz-government (EUR 350 million), the first quarter of 2004 is a significant setback (EUR 238 million). This year's budget, despite the series of austerity measures, has collapsed twice. It first happened in January, only weeks after the adoption, when the deficit target figure was first modified from 3,8 percent to 4,6 percent. The second collapse happened in mid-September, when it turned out that the budget deficit had exceeded the projected figure for the whole year by August. The deficit target figure was modified yet again, this time from 4,6 percent to 5,3 percent, i.e. altogether a margin of 1,5 percentage points. And the new target may only be reached with yet another austerity package, which the government has been vigorously denying only a few weeks ago. Our calculations show that the government deviates from the budget adopted for this year by Parliament by HUF 730 billion (added up from austerity measures plus modified target deficit figures). The firing of the previous finance minister was triggered by a much smaller deviation from the target figure (0,4 percent, or HUF 70 billion, ie. less than a tenth of the current deviation figure), whereas Mr Gyurcsány has announced to keep Mr Draskovics as finance minister. State debt has dangerously approached the 60-percent/GDP limit set in the Maastricht Criteria. Analysts are already expecting further surprises until the end of the year in the budgetary situation, and in case there is a significant deviation from the middle-term convergency course to join the Eurozone, market reaction will be quick and harsh.
"Brave governance"
Mr Gyurcsány has emphasised several times that he prepares for "brave governance". The events of the last few days have placed this statement in a bizarre perspective.
First, he kept secret the names of his would-be cabinet members until after his inaugural vote in Parliament on 29 September, fearing that some incumbent but to-be-fired ministers would vote against him, threatening the feable coalition majority. (In other words, Members of Parliament voted on a government without being aware of its members.) Cabinet members were announced publicly by the prime minister a mere hour before their scheduled hearings in the respective parliamentary committees on 30 September, an unprecedented move since the democratic transition, in defiance of constitutionality. The consequences were no less dubious: when the minister-designates were finally announced, it turned out that the old structure of portfolios was not yet modified and some appointed ministers had two or three portfolios whereas others had none. The introduction of the 2005 Budget in Parliament was delayed despite the 30 September deadline set by the State Expenditures Act, and the draft Act on next year's taxes was similarly withheld by the government. In other words, the Gyurcsány-government triggered a legal chaos in the very first days of its existence.
Second, most "weak links" in Mr Medgyessy's cabinet will carry on in the new government. For instance, Interior Minister Mónika Lamperth remains in office despite the fact that she has been regularly criticised even within the socialist party. Mr Kálmán Kovács, delegated by the smaller coalition party SZDSZ, similarly carries on as Minister of Information Technology, in spite of the series of apparent corruption scandals related to his ministry, just as SZDSZ-strongman Mr Bálint Magyar whose ministry and person was also tarnished by corruption cases. The nomination of Mr László Kovács to the post of foreign minister for mere three weeks is no less controversial. Mr Kovács takes on his duties as Commissioner for Energy in the European Commission on 1 November and his successor, Mr Ferenc Somogyi, has already been named publicly by the prime minister. Personal prestige considerations around the ministerial nomination of Mr Kovács clearly ridiculed and embarassed not only the Hungarian Parliament, but also Hungary in the EU, communicating that the Hungarian Commissioner-designate considers his professional preparations for the new position as secondary to the Hungarian domestic political agenda. Similarly, personal prestige may be the underlining reason why EU-financed regional development will be "headed" by three different cabinet members: two new ministers without portfolio (Mr Etele Baráth and Mr István Kolber) and a state secrerary in the Prime Minister's Office (Mr Sándor Nagy) - despite the government's promises of a "cheap administration".
On the other hand, Fidesz expects braveness from the prime minister in publishing his contracts he or his firms had signed with state-owned firms during the last decade. There is a great deal of obscurity concerning the origins of Mr Gyurcsány's fortune amassed in the 1990s in privatisation deals, and Hungarians have the right to be informed in earnest about who their prime minister is.
5 October 2004