After a period of slumber Hungary has again made the headlines of Western newspapers and television channels. Whereas in the 90s Hungary was celebrated for its quick adoption of neoliberal political and economic reforms, Western European audiences are today confronted with troubling news emerging from a country, which was hitherto seen as the most eminent pupil of the West.

Commentators have often tended to frame the last sixteen months' momentous political events as instances of a de-democratisation process driven by the excesses of a power-hungry leader and his henchmen in Parliament. Although there is undoubtedly an element of truth to this picture, the familiar tableau, which relies on misplaced, often orientalising images (depicting the continent's Eastern confines as an ever-boiling cauldron of aggressive majority-ethnic nationalisms) clouds more than it reveals. Viktor Orbán's attempt to install a system of 'majoritarian democracy' cannot simply be dismissed as a self-interested move aimed at cementing his party's power.

Clearly, the Prime Minister would like to preserve his position for as long as possible and, as described below, has pushed through a number of alarming reforms since he came to power in the spring of 2010. But his government's actions, as I will argue, also suggest that the current dismantling of the system of checks-and-balances is not an end in itself, but rather one element of a broader, extremely ambitious political project, which may be summarised thus: Overcoming Hungary's triple (political, economic and social) crisis by introducing a crude majoritarian rule, 're-embedding' an underperforming economy and stifling deep-seated antagonism through the freezing of social boundaries and the strengthening of institutions (re)producing nationalist ideology and patriotic sentiment.In what follows I hope to reveal some of the links between these different moves, concentrating on the political-economic nexus. My main point is not to demonstrate that the new ruling elite, to put it bluntly, is not up to the task (although I do wish to stress that it has seriously underestimated the obstacles it has to face). It is rather to suggest that the Orbán government's assault on the Hungarian Third Republic is not some kind of irrational 'frenzy', but rather a calculated response to the severe crisis of legitimacy, which has come to dominate Hungarian politics during its own 'lost decade' (2000-2010). The 'unorthodox' reforms put forward by the ruling party (Fidesz) and its Christian democratic ally are implemented in a country where the lower and middle classes are not only 'squeezed', but facing impoverishment; where Europeanisation has become a synonym for privatisation and market capture, not modernisation (as in other parts of the European periphery); and last but not least where discourses of social solidarity and post-nationalism have come to be associated with a corrupt 'luxury left'.

Some of the examples you will come across below will appear far-fetched: A right-wing government's attempt to tap into anti-capitalistic sensibilities and to dismantle the democratic edifice may appear implausible in Western Europe – even if these no longer come as a surprise in the context of a downwardly mobile middle class and its continuous dependence on a nepotistic and corruption-ridden state. There is, however, an uncanny presence of features, which betray the existence of tendencies common to both East and West. Perhaps most notable is the way in which both Eastern and Western European leaders have returned to the rhetoric of the 'national interest above all' in the context of an economic crisis threatening to destroy wealth and employment and the disappearance of federalism (whose most fervent post-Socialist proponent, Vaclav Havel, has just left the scene) from the continent's ideological landscape. This suggests that Viktor Orbán's regime is but one of the manifestations of the current 'sovereignist' moment – whose ending we do not see. It is precisely because of this that Hungary's ill-conceived and painful social experiment should be scrutinised in other corners of Europe.

In what follows I analyse the country's predicament after the new Constitution came into force on the 1st of January 2012 and, looking optimistically ahead, spell out some of the dilemmas faced by the nascent democratic opposition. The information provided here will obviously quickly become outdated. But keep in mind the deeper forces behind them, which, alas, are here to stay.

The end of democracy as we know it

Hungary's new Fundamental Law[1] (which was adopted without a referendum or the support of parties in opposition, and attracted criticism from the Council of Europe[2], the European Parliament[3] and the United States[4]) came into force on the 1st of January 2012. Although the text itself is scary enough, the government also had last minute surprises. In the last week of 2011 members of the ruling coalition – despite warnings from their fellow MPs[5] and the country's international partners – passed a number of bills which break the pillars of the liberal democratic edifice, erected just two decades ago to replace an authoritarian system of rule. Fidesz passed an electoral law which may prevent the current opposition from obtaining a majority in parliament even if it commands slightly more than 50% of the popular vote.[6] The ruling party has also prepared the ground for a scenario in which it would be forced into opposition by cementing its flagship economic policy, the flat tax – which, by the way, has already failed[7] – into the so-called stability law which can only be changed with a two-thirds majority. This anti-democratic piece of legislation will tie the hands of all future governments, which do not command a supermajority. If this were not enough, the ruling coalition has also parachuted loyal foot soldiers into the last independent state institution (the National Bank), threatening to wrest control from its 'rogue' president whom Fidesz accuses of acting against the interests of the nation.[8] Orbán's followers did not forget the icing on the wonderful Christmas cake they were preparing for the leader who appears more and more to be running a one-man show. Through one stroke of the pen, the right-wing majority changed the Parliament's law-enacting procedure, which will henceforth allow two-thirds of MPs to introduce amendments without debating them in parliament. This has effectively silenced an already cornered opposition, leaving it no other choice but to mobilise the (wo)man of the street.

Although for the Constitution's architects the second of January was supposed to be a day of joy and celebration – marked by a grandiose reception at the National Gallery and a gala concert in the National Opera – the cameras of state media outlets portrayed a tired and gloomy-looking Viktor Orbán whose words most probably stifled the excitement of the sons and daughters of the glorious 'national revolution' born in the polling booths on 11 April 2010. Far from claiming victory, the Prime Minister told his followers that the revolution had onTen steps forward, then one back

As the ruling coalition prayed hard for renewal inside, approximately fifty thousand Hungarian citizens gathered outside the National Opera (the scene of the gala concert) to decry the burial of the republic and the slide into authoritarian rule. Not only was this the largest protest since Fidesz' landslide victory a year and a half ago, it was also the first time that opposition groups – citizens' movements and political parties – joined forces to rally against a regime which has undermined democratic rights and marginalised the country, alienating key international partners such as the European Union and the United States. Protesters are aware that the fundamental changes contained in the new Constitution and the cardinal laws complementing it have been pushed through despite serious warnings from abroad. On 17 January, after letters sent by President José Manuel Barroso, Vice-President Viviane Reding (Commissioner for Justice, Fundamental Rights and Citizenship) and Vice-President Olli Rehn (Commissioner for Economic and Monetary Affairs and the Euro) the European Commission launched accelerated infringement proceedings against Hungary over the independence of the National Bank and the Data Protection Authority, as well as over measures affecting the judiciary.[9] President Barroso also made clear that the Hungarian government's non-compliance would present an obstacle to the re-opening of talks between the EU, the IMF and Hungary on the provision of a financial safety net, which had become necessary after Standard and Poor's and Moody's Investors Service downgraded the country's sovereign credit rating to below investment grade in December. The U.S. administration also sent clear signals through its ambassador, the Deputy Assistant Secretary of State and Hillary Clinton herself, expressing concern over the dismantling of democratic rights and institutions, the new law regulating churches, and the Media Council's recent decision to withdraw the license from the last radio station providing a forum for critical voices.[10] And the Foreign Ministers of France and Austria (the two countries whose companies suffered most from the crisis taxes imposed by the new Hungarian government) also made clear that Prime Minister Orbán had lost their sympathy.

The intensity of foreign pressure forced an initially defiant Orbán to hastily put an end to the economic 'freedom struggle', which Economic Minister György Matolcsy announced last year.[11] In the debate held in the European Parliament on 18 January Hungary's Prime Minister announced his willingness to change or withdraw the laws requested by the European Commission. Both politicians and markets reacted positively, praising his 'return to common sense'. I for myself do not see much reason to celebrate. For one thing, we do not know exactly what kind of concessions the Hungarian government is ready to make. While the commitment to changing the law on the National Bank may actually help to preserve a good deal of its autonomy, I personally doubt that the changes to legislation pertaining to the judiciary will be more than cosmetic. In other words, the key pillars of Orbán's 'System of National Cooperation'[12] – the one-party Constitution and the apparatchiks parachuted into key positions; the powerful Media Council and the centralised production of news content; the new election law; the flat tax; and the curtailed social rights – will probably remain intact. I suspect that Orbán calculated well in advance that he would at one point have to make certain concessions to his European partners. Be this as it may, the government's willingness to compromise looks severely limited. György Matolcsy recently made clear that the government will do everything to keep the flat tax in place. More importantly, three days after the Prime Minister spoke in the European Parliament a right-wing journalist and a media tycoon (known for their anti-Semitic inclination and closeness to Orbán) organised a massive pro-government demonstration in the capital. The more than one hundred thousand protesters and their anti-European slogans contained two important messages directed at Brussels: That the government still enjoys far-reaching support, and that the groups in power may no longer refrain from playing the Eurosceptic card in the future if they deem it necessary.

The hoped-for fruits of a costly game

The outcome of this struggle and its domestic consequences are difficult to foresee. What is clear, however, is that the country will have to pay the price of increasing isolation. Just to mention one thing: There are already rumours that Hungary will receive significantly less cohesion funds between 2014 and 2020, which would make it one of the big losers of the European Union's new budgetary cycle. So why is Orbán, who has been portrayed as one of Eastern Europe's best tacticians, pursuing such a costly strategy?

Behind the scenes, some pundits have voiced their concern that the Prime Minister may have lost touch with reality. Granting that the Prime Minister may not fully grasp the risks of some of his ill-prepared moves – such as the nationalisation of the private pension funds, which has undercut citizens' as well as investors' confidence in the rule of law – it is difficult to believe that he does not understand the fundamental implications of the political game he is playing. This is particularly true given the fact that many of his former allies – and even some of his current colleagues – have come forward to remind him of the consequences of the country's isolation.[13]

What drives Orbán, if not insanity? For one thing, he can be more-or-less sure that his government's 'unorthodox' reforms will not entail dire and irreversible counter-measures from European partners. Although the left-wing parties in the European Parliament (predictably) voiced their concern that the Commission's infringement procedures would not be enough to prevent Hungary from sliding into authoritarianism, only Luxemburg's Foreign Minister went as far as calling for the initiation of a procedure based on Article 7 of the Lisbon Treaty against the renegade country.[14] The complexity of the procedure (which could lead to the suspension of Hungary's voting rights) and the ill-fated Austrian precedent make the prospect of serious sanctions being imposed on Hungary highly unlikely. But there must be other sorts of calculations behind the Prime Minister's moves. He may in fact believe that the current moment – in which both Europe's leaders and Member States are preoccupied with 'their own' crisis – is auspicious to push through reforms, which may otherwise be impossible to accomplish.

But just what are these reforms and why are they so contested? By now it has become quite clear what the Prime Minister meant when a few days before the elections of April 2010 he pronounced the enigmatic words: 'Small majority, small change – Big majority, big change'. His 'revolution', contrarily to what many foreign spectators believe, has not been confined to the domain of the polity – that is the set of relations linking citizen to state and citizens to each other. What Orbán's frequent allusions to the sovereignty of nation and state actually conceal is an orchestrated attempt at strengthening the positions of certain strategic local companies (such as the oil company MOL, OTP Bank, the construction company Közgép and the commercial chain CBA) through diverse moves, including the buying of shares,[15] the establishment of monopolies,[16] the opening of new markets abroad,[17] and the preferential awarding of state contracts. These were accompanied by the imposition of Europe's highest bank-levy and a weighty solidarity tax, which disproportionately affected foreign-owned (mostly Austrian) banks and companies (such as French Cora and Auchan, British Tesco, and German E.on and Deutsche Telekom). Taken together, these moves spell out an overarching strategy whose goal is to enlarge the economic niche of the 'national bourgeoisie' and diminish the weight and power of multinational capital.

Naturally, both Viktor Orbán and György Matolcsy claim that their policies are geared at safeguarding the interests of ordinary Hungarians. However, other measures recently implemented by the government throw this into doubt. Take for instance the recent resignation of Under-Secretary József Ángyán, the author of an ambitious reform aimed at redirecting CAP funds towards small farmers and sustainable rural development. Although his green reform strategy was the government's most refined policy proposal, Orbán, under the influence of the agribusiness lobby, refused to endorse it. This warrants the assumption that under the guise of economic nationalism the Orbán-Matolcsy tandem is in reality seeking to obtain the backing of the Hungarian bourgeoisie in order to stabilise its power. But that is just one part of the picture. Take a look at the newly adopted higher education reform, which introduced substantial tuition fees and will thereby totally blocks the already narrow channels of social mobility. Or the drastic cuts in social expenditure, the reducing of the length of unemployment benefit to 90 days, and the new employer-friendly labour code – changes, which are bound to hurt the working poor. These measures reveal thinly veiled class preferences, making the government's claim to defend the 'interest of Hungarians' sound rather unconvincing – not only to me, but to the one and a half million voters who say they voted for Fidesz in 2010, but would not support the party if an election was held this Sunday.

Even those who understand the Orbán government's ambitious goals have a hard time explaining why all these measures had to be so hastily and harshly imposed. The answer appears to be the flat tax (Fidesz' only concrete campaign pledge, which it cannot renounce without alienating its core middle-class support base), the introduction of which triggered a financial avalanche. When, at the end of the summer of 2010, Orbán realised that the European Commission would not tolerate a higher budgetary deficit than the 3.8% promised by Gordon Bajnai's caretaker government, he and Matolcsy set out on a path of daunting improvisations. Since the Prime Minister wanted at all costs to preserve his party's and his own popularity, he decided to impose draconian taxes on foreign companies, and to severely cut spending on social benefits and public services. This, in turn, led to a depreciation of the national currency,[18] a slowing of growth,[19] and a substantial increase in the Hungarian bonds' interest rate.[20] The main reason behind the turning away from Hungarian money and assets is that investors (as well as the Commission, which recently proposed to move to the next stage of the Excessive Deficit Procedure initiated against the country in 2004) fear that the government will not be able to close the one and a half billion euro hole punched in the budget by the flat tax – and that this will lead to another debt spiral and, ultimately, bankruptcy. The obvious solution would be to reinstate a dual or triple rate income tax. Since this appears politically unfeasible the only alternative is the reinforcement of austerity measures, which are bound to exacerbate social tensions and further erode Fidesz' support. All in all, the situation looks more and more like Catch 22. ly begun and that Europe and Hungary can only be saved if we are prepared to renew ourselves by embracing the cultural heritage which underpinned our economic prosperity: the sanctity of marriage and family life, and the spiritual energies that bind person to person in the church of the national community. 

The dilemmas of the democratic opposition

Facing a government, which is driving in the wrong direction on the highway and with the radio turned off, the opposition seems to be in for an easy ride. In an article[21] written nine months ago I had signaled that Fidesz' tax reform had already fractured the 'historic bloc' (an improbable coalition of the pro-capitalist bourgeoisie, and sections of an economically and socially insecure petty bourgeoisie and proletariat), which had lifted the party to power. Less than a year after the parliamentary election Fidesz lost half a million, mostly working class voters. (The main reason was the ill-prepared introduction of the flat tax, which provoked a drop in wages at the bottom of the workforce). Since then the main governmental party's popularity has further declined: today, only 26% of the total voting population say they would vote for Fidesz. This dramatic turn of the tide has, however, not been paralleled by a comparable strengthening of the parties in opposition. The numbers show that only the far right has substantially benefited from the ruling coalition's problems: Jobbik's support grew from 7-8% to 11-12% in the last twelve months. The Socialist Party's popularity has hovered around 12-14%. Former Prime Minister Gyurcsány's breakaway Democratic Coalition can count on 2-3%. The Greens (LMP) meanwhile have managed to stabilise their support around 4% among the total population. If we only look at those who can name their preferred party, we see the following: Fidesz still leads by approximately 40%, the democratic parties are at 35%, whereas Jobbik has climbed close to 20 %. The democratic opposition's key problem, besides the fact that it is disunited, can be summed up shortly: electoral apathy. In December 2011 only 40% of voting age Hungarians said they would surely turn out to vote, while 40% said they have no preferred party. In other words, these parties have not yet found a way to reach out to voters who have grown disillusioned with the government.[22]

This turning away from politics rather than towards the opposition is one of the reasons why the ruling coalition felt that it could push through almost any reform it wanted without having to consult anyone. Fidesz could also count on docile media outlets to limit discontent and lay blame on the Socialist Party and the 'comprador elite' (as well as foreign speculators) for the economic woes experienced by the country. But the latest protests indicate that this is no longer enough to keep the most disgruntled segment of society off the street. The fifty thousand people who showed up at the demonstration held on the 2nd of January come mainly from the ranks of the capital's educated middle-class whose commitment to democracy comes from a personal (or family) history of involvement in the events of 1989 / 90. Most of them never sympathised with Orbán. More importantly, they have little connection to social groups living outside Budapest, without whom the 'System of National Cooperation' cannot be democratically dismantled. This does not mean that the protests are insignificant. On the one hand, they have provided an avenue for voicing concerns, which had not been heard for twenty years, thereby bringing educated young people closer to the world of democratic politics.[23] On the other hand, and perhaps even more importantly, they have brought together a weak and fragmented opposition – the burgeoning pro-democracy movement (led by human rights activists) and left-of-center political parties – and provided it with a common platform: resuscitating the beheaded republic. This is crucial because only a broad democratic alliance stands any chance of defeating both Orbán and the far right. The first-past-the-post electoral system introduced by Fidesz clearly spells out the need for the selection of common democratic candidates at the next elections (normally scheduled for 2014). The Socialist Party's leaders and former Prime Minister Gyurcsány have repeatedly called on left-of-centre forces to unite under the umbrella of a 'democratic opposition'. Their appeals were reinforced by the newly created Solidarity Movement's proposal to reinstate the 'Democratic Roundtable', which had guided the constitutional revolution of 1989. Yet, most of the new political players are wary of jumping in bed with the 'old', heavily discredited left. Gordon Bajnai, who heads the influential Patriotism and Progress Public Policy Foundation and is seen as one of the few people who could successfully challenge Orbán, is understandably not thrilled by the prospect of cooperating with his predecessor, Gyurcsány (widely associated with the brutal repression of the 2006 riots and the Socialist Party's corruption scandals). The Greens (LMP), who have just rejected to take part in the 'Democratic Roundtable', are also extremely wary of contributing to the rehabilitation of the fallen elite.

Both have good reasons to do so. The Socialist party – which had proven to be an incredibly rusty, corrupt piece of machinery while in power – has in no way dealt with its poisonous past and people. If it doesn't get rid of its tainted power-brokers, such as treasurer László Puch; if it doesn't commit itself to a transparent system of party-financing; if it continues to act as the barely camouflaged conveyor of economic interests – then there is a good chance that the left-of-centre would lose the next elections anyway. Another problem is that the Socialists, LMP and the Democratic Coalition hold quite different views on such crucial matters as the intervention of the state in the economy, the provision of public services, the priorities of economic development, the reform of the energy sector, and so on. (As a side note it is important to mention that the right-wing government's ill-conceived economic policies may have seriously discredited Keynesian policies aimed at spurring economic growth as well as the long-term project of increasing production capacities in key sectors of the national economy.) For the moment it is difficult to see how these forces could develop a common framework for an electoral program, which would allow the country to emerge from its crisis. Finally, as mentioned before, there is the question of faces, best highlighted by the 'Gyurcsány problem'. While shutting him and his Democratic Coalition out of the republican platform would be difficult to justify, allowing him too much space is perhaps even worse, for voters would be likely to identify the whole alliance with his arrogant personality and mendacious politics.

If these daunting hurdles are overcome, there still remains the audacious task of mobilising the silent majority which has slipped into apathy and is yet to be convinced that the left-of-centre (after a disastrous eight years in power) is capable of setting the country on a better track. The republican camp may count on the backing of the eight hundred thousand people who hold loans in Swiss francs and have not had access to the government's recently introduced repayment scheme.[24] They will be reminded day after day of the harm that the right-wing government's policies have done to their lives. So will the almost 1 million working poor who have lost out on the tax reform, as well as the unemployed masses waiting at home in vain for the 1 million jobs promised by the government to materialise.[25] The big question is whether the dispossessed, frustrated segments of the lower middle and working class who will turn out to vote will opt for more reserved, but also more realistic politics or rather turn to the social demagogy of Jobbik. This is impossible to tell at the moment. What is sure is that the left, if it wants to strengthen its position, will have to perform the kind of grassroots work, which has made the far right so successful.[26] To regain its credibility it will have to tune into popular needs, and make its alternative heard on the ground. One can only hope that democrats will be up to the task and that the not-so-cheerful roller-coaster ride that the country has been taken on will have had a sobering effect on our fellow citizens.

This article also appeared in the first edition of the Green European Journal.