Spoiler: These posts, “How to turn a country into a corrupt autocracy – the Orbán way.“, and “putin’s bitch in Budapest” were published more than three years ago and less than half a year ago respectively. This pathetic excuse of a man makes the headlines frequently. Never for good reasons. He has abused EU funds for at least the last ten years and he has been sucking up to putin for maybe longer than so. His behaviour makes me believe that he has met and/or talked to putin more times than han is publicly known. So, in case anyone needs a reminder or wants to find out more about this corrupt p.o.s., here are my old posts which contain links to independent and objective analyses of state of how Orbán has destroyed Hungary.
Enough. Below are the two posts. The oldest comes first.
How to turn a country into a corrupt autocracy – the Orbán way.
19 Apr 2020
Spoiler: Hungary have benefitted enormously by joining the EU. Joining the EU meant that Hungarians were guaranteed civil rights that were unthinkable when Hungary was a communist country. The EU membership also meant that living standards increased to levels far higher than before. Hungary has also received more of EU funding than average of the ten countries that joined the EU in 2010. Despite this, Orbán has since he became prime minister, again 2010, set out on a path violating Hungarians’ civil rights, freedom of the press and rule of law. These are steps towards a more autocratic and corrupt society where elites are free to enrich themselves.
Orbán, who in 1989 received a scholarship from the Soros Foundation to study Political Science in Oxford, was in the beginning of his political career a pro-European liberal. No wonder that he supported the pro-market reforms that were implemented in Central and Eastern European countries that later became members of the EU. The reforms led to higher growth and living standards in those countries, compared to other former communist countries. Hungary was one of the fastest reformers according to the EBRD’s Transition reports. Orbán was prime minister during part of this period.
However, during Orbán’s second run as a prime minister since 2010, the pace of reforms has slowed down and reforms that will make Hungary less integrated with the outside world and even violate the principles of the Single Market, have been introduced. This might explain why the gap has increased to the other nine countries that joined the EU in 2004 have increased since Orbán came back to power, c.f. Figure 1.
Figure 1. GDP per capita developments in Hungary, EU10 and Former Soviet Union republics 1990-2017.
Source: World Bank Database. https://databank.worldbank.org/data/source/world-development-indicators#Note: All series are shown as logs of an index, which equals 1.0 at 1990 so the series start at zero. Since the vertical axis is in log units, the slopes of the series are the rates of growth. An increase of 0.1 is a growth of 100*(exp(0.1)-1). As an example, FSU12 GDP had decreased by some -0.6 in 1998 which corresponds to a 100*exp(-0.6)-1) = -45%. Log changes are approximations.
Blaming Orbán and his policies for the full extent of the gap is probably stretching it a bit. But it cannot be blamed on the EU which, next to George Soros, is Orbáns preferred target for attacks. No matter how you calculate, Hungary have received more relative to the average of the other nine countries that joined the EU in 2004. And they began to receive funding already in 2000, c.f. Table 1.
Table 1. Importance of EU funds for countries joining the EU in 2004.
Sources: EU funds Eurostat Balance of payments statistics, https://ec.europa.eu/eurostat/web/main/home Public investments, GDP and Population European Commission AMECO database, https://ec.europa.eu/info/business-economy-euro/indicators-statistics/economic-databases/macro-economic-database-ameco_en
So, for Hungary, like for the other NMS10 countries, the inflow of EU funds is especially important. But more so in Hungary, where the funds accounted for 2.6% of GDP between 2010 and 2019, and for around 60% of public investments.
However, if it had not been for the pervasiveness of corruption that plagues Hungary under Orbán, the funds would’ve come to better use. Poor procurement rules and concentration of decision-making authority over disbursement of funds in the prime minister’s office, make it easier for the Orbán regime to enrich himselves, his elite and relatives, such as his son-in-law István Tiborcz.
If you want to put some public money in your pocket, the best way to do this is to aim for large infrastructure project. In countries with weak corruption, the procurement process is transparent and strictly regulated. The Hungarian public procurement process is however rigged in favour of people connected with the regime. Large contracts are given to firms after what is called “negotiated procedures”. These procedures allow the government to strike a deal with any company without going through an open competition. And to make matters worse, most of the open tenders for procurement in Hungary only involves a single bidder.
These opaque practices have raised eyebrows in Brussels. EU’s anti-fraud office, OLAF, have many times recalled funds, from Hungary, due to irregularities and fraud. Irregularities were found in all 35 Hungarian projects that OLAF reviewed between 2011 and 2015, including the construction of the new metro line in Budapest. Due to irregularities, the government was ordered to repay €283 million for that project. And in the DG OLAF 2018 report, Hungary won the league of countries subject to DG OLAF investigations of how EU funds are used, c.f. Figure 2.
Figure 2. And the winner is Hungary!
Source: DG OLAF (2019). The OLAF Report 2018. European Commission. https://ec.europa.eu/anti-fraud/sites/antifraud/files/olaf_report_2018_en.pdf
And did I mention that the mayor of Felcsút, Orbán’s home village now is the eighth-richest man in Hungary? And that his wife owns some 121 companies. According to this and many more articles, more than 80% of Mészáros’ family companies’ earnings are believed to come from EU funds. This is one of the reasons why Orbán in this Hungarian article is called a mafia leader.
Turning from qualitative to quantitative information, the World Bank’s indicator of Control of Corruption corroborates the story above. The Hungarian slide towards a more corrupt society has been accompanied, and supported by a deterioration of Rule of Law, c.f. Figure 3.
Figure 3. Control of Corruption and Rule of Law in Hungary relative to the other NMS10 countries.
Source: Rule of Law and Control of Corruptionarefrom World Bank, Worldwide Governance Indicators Database, http://data.worldbank.org/data-catalog/worldwide-governance-indicators. The original indicators were standardised to be in (0,1). Note: The two lines relate the indicator for Hungary relative to the average of the other nine countries that joined the EU in 2004.The increase in the end of the period is mostly due to the deterioration of Rule of Law in Poland.
Hungary is not only among the most corrupt EU Members; it is also the least democratic EU country. As I wrote here, Hungary is now regarded as an autocracy in V-DEM’s annual report . Orbán’s policies are therefore in direct violation with Charter of Fundamental Rights of the European Union.
Unfortunately, as I wrote here and here, the EU Treaties do not allow for a country to be expelled from the EU. And an Article 7 process leading to a removal of the country’s voting rights in the European Council can be prevented by a blocking minority. Then what should the EU do to punish, yes punish, Orbán’s authoritarian rule? Since EU funds regularly have been abused by the Orbán regime, conditioning the disbursement of future EU funds to the state of Rule of Law, would be a beginning.
putin's bitch in Budapest
is slowly but safely destroying Hungary.
25 Oct 2023
Spoiler: Since he became prime minister for the second time, Orbán’s policies had led to more corruption, less freedom and EU’s highest inflation which he tries to curb with price controls economy. Price controls are harmful. So is Orbán.
Most people would refuse to shake hands with war criminals. Not Orbán. In Beijing, he shook hands with a person whom the ICC has issed a warrant arrest against.
Orbán sucking up to putin
Source: The Internet. I have forgotten where I found it and can’t find the link.
Orbán has several times declared that he despises Ukrainans. His demands for “peace” or at least “cease fire” between Ukraine and muscovy show that he doesn’t care about Ukrinans being murdered, raped, tortured, and deported from the occupied parts of Ukraine. In the EU, Orbán has consistently argued against sanctions against muscovy, aid to Ukraine, Ukraine membership in the EU, but so far caved in when being pressured.
Orbán is a pathetic hypocrite. While lashing out against the EU for critisising his destruction of Hungary, he’s quiet about the Hungarian economy’s dependence on EU funds. Since joining the EU in 2004, Hungary has every year received funds amounting to 2% of GDP from the EU (in net terms). In the coming years, EU funds will continue to be a major source of foreign currency for the economy. As I show in Table 1 in the post above, Hungary have received more than the average of the other nine countries that joined the EU in 2004.
Importance of EU funds for countries joining the EU in 2004.
And EU will continue to be very important for the Hungarian economy. Between 2022 and 2026, net funds to Hungary from the EU will amount to between 2% and 3% of GDP.
Orbán has crushed freedom in Hungary to enrich himself and consolidate his power.
Some of his resistance to helping Ukraine is probably part of a sordid negotiation process in which he tries to release withheld EU funds in exchange for not blocking sanctions or aid or demanding lifting on sanctions on Hungarian banks who do business with muscovy. The EU has been reluctant to release EU funds for Hungary due to the Orbán regime’s violations of Rule of Law and its blatant corruption. The corruption has infested the Hungarian society during Orbán’s rule. Year after year, DG Olaf, at the European Commission, finds it necessary to launch more investigations due to suspected fraud in Hungary than in any other EU country.
Orbán insists of winning the DG Olaf competition of most investigations into fraud in the EU.
Source: European Commission 2023. The OLAF Report 2022.
That Hungary is by far the most corrupt country in the EU is also confirmed by analyses of Transparency International, and Varieties of Democracy (V-Dem). Researchers at V-Dem has also shown that corruption and abuse of Rule of Law go hand in hand. Nowhere in the EU, is the Rule of Law attacked as in Hungary. And it began when Orbán became prime minister again in 2010.
Regime corruption and Rule of Law in Hungary 1989-2022.
Source: Varieties of Democracy. Note: Both indices range from 0 to 1. The Rule of Law index is lower, the worse the conditions of Rule and Law are in a country. The Regime Corruption index is higher, the more corrupt the government and its officials are.
The conclusions about Rule of Law in Hungary by researchers at V-Dem, are confirmed by their colleagues at World Justice Project. While the situation for Rule of Law has improved in other EU countries at the bottom of the index, it has deteriorated in Hungary.
Rule of Law index for the EU, EFTA, and North America 2022.
Source: World Justice Project.
This just confirms that nothing has improves since my above post about the Orbán regime.
Au contraire, it has become worse. Orbán has increased that attacks on all sectors in the Hungarian society. The independence of the judiciary is abolished, he’s taken control of most of the media and keeps attacking what’s left of independent media. The academia, civil society organisations, and the opposition parties are and have been this targets for some time now. As Fredom House and Human Rights Watch show, Orbán also attacks the LGBT communities and refugees.
Freedom House, Freedom in the world 2023.
Since taking power in the 2010 elections, Prime Minister Viktor Orbán’s Alliance of Young Democrats–Hungarian Civic Union (Fidesz) party pushed through constitutional and legal changes that have allowed it to consolidate control over the country’s independent institutions, including the judiciary. The Fidesz government has since passed antimigrant and anti-LGBT+ policies, as well as laws that hamper the operations of opposition groups, journalists, universities, and nongovernmental organizations (NGOs) that are critical of the ruling party or whose perspectives Fidesz otherwise finds unfavorable.
The government continues its attack on rule of law and democratic institutions. It replaced a previous Covid-19-related state of danger with a state go danger due to the war in Ukraine, giving the government extraordinary powers to rule by decree and sidestep parliamentary process. Independent journalists, media outlets, and civil society organizations are vilified by high-ranking public officials and in pro-government outlets in a distorted media environment. Discrimination persists against lesbian, gay, bisexual, and transgender (LGBT) people, women and Roma. Unlawful pushbacks of migrants and asylum seekers to Serbia continued and access to asylum procedures is close to impossible.
And he’s fucked up the economy and helped his friends
Orbán’s economic policies seem to be tailored to meet the needs of his current and potential friends in business. Low corporate and labour taxes in combination with generous subsidies have made Hungary an attractive place for labour-intensive industries. Not all industries are given a favourable treatment however, especially not those that are foreign-owned with company boards outside of Orbán’s reach. From the 2023 European Commission country report on Hungary:
For example, the government recently imposed administrative price caps and a 90% profit tax on the production of cement and ceramic materials, i.e. in industries with high shares of foreign ownership. In December 2022, the government suddenly increased the tax on insurance and pharmaceutical companies.
The Orbán regime also actively intervened in markets for the benefit of its supporters. The interventions were not insignificant. They were so frequent, large and completely unjustified from economic points of view, that they became part of the European Commission’s country specific recommendations for Hungary this year. From recommendation number three:
Improve the regulatory framework and competition in services by avoiding selective and arbitrary administrative interventions and the use of tailor-made legislation providing undue advantage or disadvantage to specific companies, by applying competition scrutiny systematically to business transactions and by reducing the use of emergency measures to what is strictly necessary, in line with the principles of the single market and of the rule of law.
As mentioned above, the regime has used price controls to fight inflation. Useless of course, the Hungarian inflation is the highest in the EU.
Average (2022:10-2023:9) monthly annual rates of change in the inflation.
Source: Eurostat Database.
Between October 2022 and September 2023, the average of monthly inflation, converted to annual rates, was on average seven (7) percentage points higher than in the country (Latvia) with the second highest inflation rate!
Conclusion
Orbán is a corrupt useless little dictator wannabe who should be shown the door.