Another far-off country

As we go on waiting for THAT speech it might be worth taking a look at some other members of our real government (not that you will hear David Cameron acknowledging that). Let us turn our attention to that other far-off little country about which we know next to nothing about: Hungary.

The excuse is a fascinating article by the Hungarian economist and MEP, Lajos Bokros, in the Financial Times, which excoriated the ruling party FIDESZ for all the right reasons though the semi-defiance of the EU is briefly referred to as well.

Founded as an anti-communist group in the 1980s, Fidesz certainly had the potential to establish itself as a centre-right movement, capable of sweeping away the corruption and inefficiencies of communism and helping to build a modern, efficient, Hungarian state.

However, since it came to power in April 2010 Fidesz has implemented a strongly populist, nationalist, anti-market agenda. It has introduced punishing taxes on banks, energy utilities, telecom companies and big retailers.

Since most of these sectors are dominated by foreign strategic investors – many of whom brought in their money and skills when the future of Hungary and central Europe was far from secure – these measures reveal a strong anti-foreign and anti-market bias. The government justified its predatory taxes by claiming that financial firms and public utilities generate no value, but only expropriate and redistribute income earned elsewhere.

Far from being centre-right, this is an obsolete world view reflecting raw Marxist thinking, under which value is created only by agriculture and manufacturing. Services, the main source of growth, revenue and jobs in all developed economies, don’t contribute to social welfare in the Fidesz view. According to the government, the regime is constructing a new society “based on labour”.

As it happens, I recall talk at the time FIDESZ emerged as a political force to be reckoned with of Viktor Orbán wanting to build up a new kind of right-wing party in Hungary, one that looked to British conservatism  as a model rather than the old-fashioned Central and East European nationalist and statist right. Alas, for high hopes. Mr Bokros's article summarizes what has happened rather well.

He also manages the growing control of the media, of the financial institutions and of the Constitutional Court. Here we do have one piece of good news to report. Earlier this month the court upheld the President's complaint against the government's attempt to distort the electoral legislation. Will Mr Orbán accept that decision for any length of time? We shall see.

In the meantime, as Kester Eddy reported a couple of days ago, the question of who will take over from András Simor as head of the central bank is looming. Past experience tells one that it is likely to be someone from Mr Orbán's immediate political circle.