The Hungarian people are out on the streets in force, protesting a new constitution which has been introduced by the government. This has been covered in the press here and the main thrust is serious concern about an attack on democracy in that country by the ruling party. Much of what has been passed, as it has been reported here, is worrying, and there seems to be some justification for seeing this as a return to an authoritarian regime not seen since the fall of the soviet bloc. Generally the people are not wrong on such matters and so I find the protests persuasive in themselves. However I have no access to what the protestors are actually objecting to and there are a number of possibilities.
I first came across this through an article by Mr Krugman: who is an american economist. That seemed odd to me since it is not obviously within his remit and I would have expected it to be the focus of political commentators, rather. Maybe it was and I missed it. There is an economic dimension to it, though, so it is not out of his field and his interest makes sense. His piece was elaborated by someone called Mr Scheppele, also an american academic who appears to have a lot of knowledge of Hungary, though I do not know his field of expertise
What has been reported by these people is that a "centre right" party called Fidesz won a landslide victory in elections last year. This is said to have been due to dissatisfaction with corruption in the previous "socialist" government: I do not know the details of that but the upshot was that Fidesz got a huge majority in a unicameral parliament. It is not claimed the election was not fair: and while 53% of the vote translated to 68% of the seats, that is not all that unusual in representative democracies: it happens all the time. It is claimed that Fidesz have used that majority to make major changes, culminating in a new constitution which came into force on 1/1/12. That constitution is the focus of the concern and it seems it dismantles many of the safeguards which are necessary to democracy. That is the issue.
According to Krugman and Scheppele, the governing party has done a number of things which together effectively make Fidesz policies a permanent part of Hungarian political life. Their views are set out here:
http://krugman.blogs.nytimes.com/2011/12/1...nal-revolution/In summary they allege that a list of changes, all tending to a one party state, are the essence of the matter. In particular they say:
1.The new constitution (and laws passed prior to its introduction) destroys the independence of the judiciary.
2. The oversight of elections, previously done by a commission appointed from a politically diverse pool in consultation with opposition parties, has been passed to a new body which is wholly comprised of membes of the ruling party
3. Constituency boundaries have been changed (gerrymandered) so that the ruling party is very likely to win future elections. If the boundaries had been like this in the past Fidesz would have won the last 3 elections: they lost two of them on the old boundaries
4. The new constitution destroys the independence of the press
5. The new constitution destroys the independence of the central bank
6. The new constitution establishes Hungary as a Christian state: and this has a concomitant that a foetus is protected from the moment of conception. Many churches have been "deregistered" though it is not clear what the implications of that may be, because the importance for a church of being "state recognised" is not spelled out
7. Under the new arrangements a great deal of public and fiscal policy is enshrined in the constitution and needs a 2/3 majority in parliament to overturn them. This is said to be particularly true of budget arrangements and it ties any future government to a particular fiscal and economic policy. It creates a "budget council" with the power to veto any proposed budget: at the same time requiring parliament to pass a budget by March each year. If they fail to do that the president can dissolve parliament and call new elections
8. There are concerns that the main opposition parties can be eliminated under existing or new laws: though that is not certain and is perhaps overstated
Put like this it all sounds very scary indeed. And the fact that the people are out on the streets tends to confirm that this is very bad, certainly. But before we reach any conclusions we have to have a think about all this: because it still seems odd to me that this information was first drawn to my attention by an economist: and that is strange. It is certainly true that I have been reading a lot about economics recently: so that may be the only reason for that and it is bias of source on my part. But I do read the headlines in the mainstream press, at least: and if this were as portrayed I would have thought it would make news. Hungary is at the heart of europe and it is a member of the EU.
That fact is part of this. Hungary is in desperate economic straits and it needs a bail out. Enter the IMF. Apparently the IMF and the EU were in negotiations about a bail out: and these have now been broken off. But so far as I can tell they have not been broken off because of concern about a move to an anti-democratic constitution: the argument is about economic policy, as one might expect.
In particular: in the past the president of the Hungarian central bank used to appoint his own vice presidents, of which there were two. Under the new arrangements there will be three and they will be appointed by the prime minister. It means the prime minister can appoint one immediately: and the rest later. This has caused such concern that the EU president has written to the Hungarian leader urging that be altered. It is not even slightly obvious to me why that is a concern. That politicians should have the right to control the central bank seems utterly in line with democracy to me: not a threat to it. It is a completely separate question from that of a "one party state". It is obvious that the EU has great faith in bankers, given they are prepared to countenance handing over the government of countries to those people, in Italy and in Greece. But I don't. I do not see any great threat to democracy from handing control of economic policy to democratically elected politicians rather than unaccountable bankers. On this issue at least it does not seem obvious to me that the Hungarians are the problem...
According to Scheppele the "stern warnings" from the EU have led the Hungarian government to make some concessions about this, because an independent central bank is part of the conditions for membership of the EU ( I did not know this before). But they are not sufficient because of some other provisions. There is a Monetary Council in Hungary and it sets interest rates and monetary policy: it existed before. The new government has expanded the numbers who sit on it and appointed the new members: so 6 out of 9 are now government appointees. So the government will set monetary policy, shock!. I can't see a thing wrong with that, myself. It is how it should be, to my way of thinking.
In addition the government has changed the status of the central bank: it has merged it with the regulator. The new agency's head will also be appointed by the government and so the president of the central bank will no longer be the top banana. So what? Once again control of monetary and fiscal policy by elected governments seems right to me: if you have to do that by the back door because the EU has the vapours if there is democratic control, so be it. These measures, as described, do not touch on the question of the one party state: there are entirely to do with who is actually in power: politicians or bankers. To me that is a no-brainer. Even where those politicians are not properly democratically accountable they are (at least for now) subject to the ballot: neither the "holier than thou" EU president nor the bankers can say the same. If Fidesz has made it necessary to get a 2/3 majority to change any of this that is still better than the " no amount of votes at all can change the EU or the banks" situation that their critics are in.
Fidesz is a centre right party. It is not suprise that they have implemented policies which I find abhorrent. And it is nasty that they have, for example, passed a tax law which permanently lays down flat rate tax for individuals now; and for corporations in the future. But that proposition is part of mainstream right wing thinking in many countries (not yet implemented anywhere else, but hardly unheard of). Unsuprisingly Fidesz is funded by rich folk and this will suit them very well. The fact that changing that requires a 2/3 majority is horrible: but it is not out of line with the EU proposal that anything which tends to increase the "structural budget deficit" anywhere in Europe will be illegal in future: and that is meant to be permanent too. I hate both policies: but I couldn't slip a sheet of paper between them in terms of their attack on democracy. So why the outrage? Well according to Scheppele it is because the EU thinks that this provision will make it impossible for Hungary to balance its books. Not about democracy, then...
Hungary has economic problems, as mentioned before. It borrows in foreign currency: but it is not part of the eurozone and so its currency has been devaluing. That means that its debt goes up. It was in trouble, as so many countries are. The previous government sought assistance from the IMF and the EU. Fidesz decided it did not like the terms and followed its own policies instead: it did terrible things. It nationalised private pensions; it imposed higher taxes on foreign businesses; it forced banks to take losses on the repayment of private loans. These are described as "unconventional" measure. The IMF walked out of talks about assistance when the government refused to budge on the flat rate tax and the independence of the central bank. Since then the international financiers have done what you would expect: they won't buy Hungarian bonds and their credit rating has been reduced to "junk" status by Moody's and Standard and Poor. The way I see it, any government which seeks to govern is subject to that kind of action: it is not clear to me that it is the Hungarians who are undemocratic, though.
I am in a curious position here: I am defending a government which is political anathema to me on grounds of democracy: but that is the way it turns out if you happen to be a democrat. It is clear to me that the IMF and the EU are not democrats: and this makes strange bed fellows indeed.
There are things which are concerning: and the Hungarian people are concerned. I do not wish to underplay the parts which should be challenged. It is just that they are not very clear to me.
It is not good if the judiciary are appointed by the government: you only have to look at the US Supreme court to see what is wrong with that. Do I hear an attack on the democratic credentials of the US on those grounds?: the silence is deafening.
It is not good if the press are not independent: but a constitutional requirement for "balance" is not quite the same thing. That is what the new constitution says: it is what the BBC charter says too: do I hear an attack on the democratic credentials of the UK on those grounds? I do not.
Constraints on what an elected government can do wrt the national budget are not good: but they are precisely what, in another part of the forest, is touted as the solution to the sovereign debt crisis proposed by the EU: and in that case the sanctions will be a take over of the national policy by EU appointees: in Hungary they will be fresh elections. Not sure the former is more democratic, myself. I don't hear much outcry about that particular democratic deficit in the EU proposals, either
In short I am not convinced about this faux moral outrage about Hungary. The situation is not simple, but it seems to me that there is at least a case to be made that all of this is down to a rejection of the hegemony and a re-assertion of economic control by politiicians. Heaven forfend !
