How Europe’s Populist Ringleader Transformed Hungary: QuickTake

(Bloomberg) -- Hungary’s prime minister, Viktor Orban, has emerged as the ringleader of European populism. He’s transformed his nation, a member of the European Union, into a self-styled "illiberal state" modeled on Russia, along the way amassing more power than any Hungarian leader since the Iron Curtain fell. That’s earned him followers across eastern Europe and beyond, prompting French President Emmanuel Macron to compare the tension between liberalism and nationalism to a "European civil war." Orban’s dominant showing in April parliamentary elections, giving him a third consecutive four-year term, set up a showdown with the EU as it attempts to hold its members to democratic norms.

1. How has Orban changed Hungary?

After a 2010 election victory he called a “revolution at the ballot box," he pushed through a new constitution over opposition protests, curtailed the power of courts, appointed allies to head independent institutions and changed the electoral system in ways that helped him keep power. He’s perhaps most famous, or infamous, for his hostility toward immigrants, particularly Muslims, whom he’s called “invaders.” To protect what he calls “Christian Europe," he built a fence on Hungary’s southern border and forced asylum-seekers into detention camps. A legislative initiative to crack down on civic groups that help migrants is called the “stop Soros” bill, reflecting Orban’s disdain for Hungarian-born billionaire George Soros and his support for open societies. Soros is Jewish, and the Orban-led campaign to discredit him has had anti-Semitic overtones.

2. What’s his goal?

In a 2014 speech, Orban portrayed himself as a counterpoint to Europe’s liberal democratic model, which he said reacted weakly to global financial turmoil and was destined to lose its competitive edge to more centralized states that he said are better prepared to respond to crises. He believes in strong leaders unencumbered by checks and balances and able to protect their countries from being “trampled upon,” as he says Hungary was when it needed a lifeline to avert a default in 2008. Brexit, the rise of China and the spread of populism from Washington to Warsaw are all, to Orban, proof that his is the right path.

3. Who is following his lead?

In Poland, the populist Law & Justice Party has led a similar assault against courts, the media and other fixtures of democratic governance since taking power in 2015. Other former communist nations such as the Czech Republic, Slovakia and Romania have strayed from the EU mainstream by rejecting refugees or by planning to make it harder for officials to be prosecuted. In western Europe, nationalists of all stripes have cited Orban as an inspiration. German Interior Minister Horst Seehofer, a leading dissenter to Chancellor Angela Merkel’s welcoming stance toward refugees, is an Orban fan. So is Stephen Bannon, former chief strategist to U.S. President Donald Trump, who called Orban a “great hero.”

4. Is Orban’s vision working for Hungary?

In some ways. When he took office in 2010, Hungary had one of eastern Europe’s highest levels of government debt levels plus ballooning non-performing mortgages that threatened millions of homeowners. Orban pushed through controversial measures including the nationalization of private pension funds and the imposition of extraordinary levies on banking, energy and telecommunication companies. He forced lenders to take losses on toxic foreign-currency loans. Hungary now has declining debt, stable public finances and rising wages. But with Orban holding almost unrestrained power, a new class of politically connected oligarchs holds sway over an ever-greater slice of the economy and corruption has flourished.

5. Do Hungarians approve of all this?

Orban’s support is hardly monolithic. His Fidesz party received half of all votes in the 2018 election, but with his opponents divided, that was enough to secure a third consecutive parliamentary supermajority -- which allows Orban to pass any law without opposition support. Orban’s anti-immigrant message resonates particularly with voters in the countryside.

6. What’s next now that Orban has won another term?

All signs point to further silencing of dissenting voices within Hungary. Soros’s Open Society Foundations, a main source of funding for non-governmental organizations, is moving its staff to Berlin from Budapest for safety reasons. Central European University, founded by Soros in the 1990s to train democratic leaders across eastern Europe, is considering moving its campus to Vienna. A newspaper and radio station owned by a former ally-turned critic of Orban shut down before his latest inauguration. There’s concern that the court system, parts of which have managed to retain their independence, will be next in line to come under Orban’s influence. After taking the oath of office for his new term, Orban outlined plans extending into 2030, triggering speculation that he plans to stay in power for another three terms.

7. Can the EU do anything?

The EU’s executive has initiated a procedure against Poland that can end with the suspension of Warsaw’s voting rights in the bloc and the European Parliament is considering doing the same for Hungary as punishment for undermining democratic norms. There’s little chance though this will come to pass as the two nations have pledged to use their veto powers to ultimately block such moves. A more viable opportunity for the EU may be to use negotiations over the post-2020 budget to condition billions of euros in EU funding to compliance with the rule of law. To many, the EU seemed asleep at the wheel for eight years as Orban created his illiberal state and spawned copycats in the region.

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