Hungary Rejects Macron `Arrogance' as EU Reform-Fight Looms

(Bloomberg) -- French President Emmanuel Macron’s plan to bring to heel renegade European Union nations as part of a drive to reform the bloc smacks of arrogance and will fail, a senior Hungarian ruling party official said.

Unanimity is required both to change the EU constitution and approve a multi-year, post-2020 EU budget. That means proposed sanctions on countries like Hungary and Poland for alleged rule-of-law violations won’t gain traction, according to Gergely Gulyas, parliamentary leader of Hungarian Prime Minister Viktor Orban’s Fidesz party.

Governments are drawing battle lines as the EU mulls plans to re-invent itself, with some members saying the euro crisis, Brexit, the biggest refugee influx since World War II and ex-communist members ditching the bloc’s liberal values have necessitated a revamp. Macron has presented the most ambitious proposals, with a plan to deepen integration in everything from defense to the economy. He has also called for sanctions against member states seen as backsliding on democracy.

“If we’re going to play the game that western European countries want to launch rule-of-law procedures against eastern European countries because of differences over values, then that’s not going to work," said Gulyas, 36. "That would destroy the Union.”

Aid Pipeline

Hungary received 3.6 billion euros ($4.5 billion) in net EU funding in 2016. That made it the fourth-biggest beneficiary in the 28-member bloc after Poland, Romania and Greece and underscores the risk to its economy if Macron can make good on his pledge.

Gulyas dismissed proposals aimed at punishing Hungary and Poland, arguing that France has for years failed to meet EU spending limits yet has escaped penalties for fiscal offenders. At the same time, Gulyas said Hungary backed some ideas, such as creating a common European defense force, which he said may potentially win unanimous support.

“Macron’s proposals are like a smorgasbord that includes items of varying quality," said Gulyas. "It’s worth taking on board some but not others.”

Rule of Law

The European Parliament is now debating whether to recommend suspending Hungary’s voting rights in the EU for systemic rule-of-law violations in an echo of a European Commission recommendation against Poland. European lawmakers are entering the fray after the commission forced Hungary to change some of its disputed legislation since 2010, including parts of a judicial overhaul. But that effort was widely seen as having failed in stopping Orban from building what he describes as an “illiberal state,” in which a strong executive has few effective checks on its powers.

“Hungary meets all of the EU’s rule-of-law criteria," said Gulyas, a lawyer by training who’s seen as a moderate voice in Fidesz. "We’re one of the few countries that have a report card from the European Commission to prove it since we reached an agreement on all of our disputes.”

Orban is favored to clinch a third consecutive term in April elections. He’s fought criticism at home and abroad for having extended his influence over independent institutions and the media since returning to power in 2010.

“This is a hybrid system, somewhere between a democracy and a dictatorship,” Gergely Karacsony, the joint prime ministerial candidate of the opposition Socialist and Parbeszed parties, told foreign correspondents in Budapest on Thursday. “There’s not a single head of an independent institution who’s not linked to Fidesz.”

Fidesz had 62 percent support among decided voters in January, helped by accelerating economic growth, rising wages, and a relentless anti-immigration campaign that’s dominated public discourse for more than two years. The most popular opposition party had 14 percent support, according to a Tarki poll published this week.

“A prime minister’s political power hinges on his backing," Gulyas said. "And as long as it’s this strong, his political power is also going to be strong."

©2018 Bloomberg L.P.