"Socialist" victory in sight
International Viewpoint #256 May 1994
HUNGARY goes to the polls on 8 and 29 May in a two round general election. Our correspondent explains the background to the elections and examines the possibility of a Socialist Party landslide. LASZLO ANDOR Budapest, 14 April 1994
T HE current government,
which was formed in May 1990, has collapsed. Formed, in the main, by three parties - the Hungarian Democratic Forum (MDF), the Independent Smallholders' Party (FKGP), and the Christian-Democratic Peoples' Party (KNDP) - it was supported by sixty percent of the parliamentary deputies.! The government was first led by József Antall, an expert on medical history, who died last December, and was succeeded by Péter Boross, who was invited into the cabinet in 1990 from retirement after a successful career in the catering industry. Double 1 and doubles at the end of these surnames signifies nobility, which became a central factor in the politics of the government. From a populist movement of writers and other intellectuals, Antall turned the MDF into a party of the historic
### HUNGARY
Christian-Nationalist middle class, with roots in the 19th century liberal nobility.
They slowly and quitely rehabilitated inter-war Hungarian politics, and promoted inter-war authoritarian leaders as outstanding heroes of democracy. This process reached its peak last September when Admiral Miklós Horthy, the oppressor of the 1919 Soviet Republic of Hungary, and Regent between 1920 and 1944, was re-buried in his homeland. The next televised funeral, this time a real one, was Antall's, who had fought cancer publically since October 1990. His funeral was modelled on the fascist Prime Minister Gyula Gömbös (1932-36), who established Hungary's alliance with Mussolini and Hitler, and of Count Pál Teleki, who was Prime Minister when various anti-Jewish laws were enacted.
This historic continuity has played an important role not just in style but in terms of polcies as well, particularly economics. The government was attempting to find a middle way between total restoration - which would have restored the rights of pre-Stalinist owners of firms, land, and property — and the sell-off of state assets, which appeared to be the method which was least likely to threaten the running of the economy, and even promised to produce some revenue for the budget. This compromise resulted in four consecutive Compensation Acts, which gave so-called compensation vouchers to expropriated owners in proportion to their long gone assets. These vouchers can be used to buy assets as well as certain consumer goods, and are capital accumulation, they could not escape the deepest economic depression since the 1930s. They had inherited a USD20 billion foreign debt from the Stalinist period and had no choice but to obey IMF-conditionality and World Bank structural adjustment; policies which were incorporated into four-year transformation programme. Another factor which pushed the economy further into depression was the collapse of the East-European trading system, and in the meantime a recession had hit Western Europe as well, which made recovery practically impossible.
Despite severe economic storms in the neighbourhood, industrial policy has remained a totally unimportant issue behind transforming ownership and replacing personnel in well-paid jobs in ministries and companies. Thus, in the light of external shocks and internal mismanagement and ignorance, it is not a surprise that figures show a dramatic decline for the past four-year period. If we were to designate 1989 as equal to 100, in 1993 Gross Domestic Product (GDP) had fallen to 70-75; industrial.production fell to about 65; agriculture, 60-65; while inflation rose to 300 (that is, between 23-35% annually). Within the same period the rate of unemployment rose from 1% to close on 15%.
### Internal fighting
A government with a record like this will not be popular and time after time the coalition was torn by internal fighting. Support eroded quite quickly,
Leading parties
MDF — Hungarian Democratic
FKGP - Independent Smallholders'
Forum
Party
KNDP — Christian-Democratic traded in the stock exchange as well. Close to a million people have already pensation in some form. (The total number of eligible voters is although Antall initially managed to retain the support of more than fifty percent of the deputies. Tt was the democratic — or left — nationalists who split from the MDF first, and, in collaboration with the ex-Communist minister Imre Pozsgay, who had left the Socialist
8 million and the government clearly hopes to establish a million strong loyal
Antall's government wanted to pursue a nationalist economic strategy, in order to help domestic business and the process of
Party (MSZP) in November 1990, they formed the National Democratic Alliance. Then the FKGP split over the issue of compensation or restoration. Later, several individual parliamentary deputies left the MDF, including the leader of
1. Hungary's parliamentary deputies are elected partly by geographical constituency and partly by party list.
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Peoples Party MSZP - Socialist Party FIDESZ - Alliance of Young Democrats SZDSZ - Alliance of Free Democrats
International Viewpoint #256 May 1994 the Entrepreneurs' League, who later formed the small but rich Republican Party. Two MDF deputies joined the small opposition faction of the Alliance of Young Democrats (FIDESZ). Finally, in 1993, after a heavy attack from the right of MDF against the sick Prime Minister, a dozen deputies left or were expelled from the MDF and formed small far-right parties, like the Party of Hungarian Justice and Life (MIEP), led by István Csurka, Party of Hungarian Interest, Party of Hungarian Justice, and the Hungarian Market Party. The KDNP has been the most loyal to the coalition, but they too have become critical.
### Fragmentation
Following this spectacular fragmentation, in December 1993 the government moved to modify the Election Law. The amendment increased the threshold for representation in parliament from four to five percent. This change was also a message to the Kádárist Hungarian Socialist Workers' Party (from January 1993 it has been called the Workers' Party, which came close to four percent in 1990. The increase in the threshold was supported by all the parties currently in parliament, since all of them expect to get more than five per-
Nevertheless, perhaps the most shameful manoeuvre of the government was against the electronic media. With the agreement of all the parties in parliament, two famous social scientists were appointed to govern the national radio and television stations. The government had found that it had very little intellectual influence on the population and the circulation of the daily and weekly papers they had founded or taken control of remained very low. Hence their desire to seize control of radio and television. But after a year infighting, they forced the two scientists to resign as presidents, and the two vice-presidents, right-wing MDF-loyalists bureaucrats, started to close down programmes which had provided air-time for a variety of alternative viewpoints. In March of this year, just as the election campaign was beginning, the government sacked 129 journalists and other employees, allegedly for financial reasons.
According to opinion polls, all this nervous activity is in vain. A liberal alliance has been preparing for more than a year to replace the ChristianNationalist government. This unofficial shadow-coalition was formed by the Alliance of Free Democrats (SZDSZ), 26 second in 1990 with 23% of the vote, FIDESZ, with 5.5%, and two parties not represented in parliament, the Agrarian Union, which turned itself from defenders of collective farms into a modern bourgeois agrarian party, and the Entrepreneurs' Party, led by the liquor producer industrialist Péter Zwack, who had given up US citizenship to become Antall's first ambassador in Washington (he was sacked after six months).
Although this liberal shadow-coalition has been highly publicised, events between its creation and the election campaign make it nearly impossible for them to make a government in June. First of all, the two small parties will not manage to jump over the 5% threshold and will not be able to win more than one or two seats in the constituencies, which make up nearly half of the parliament. Although Zwack is popular (due to his famous Unicom liquor), and the Agrarian Union won a by-election in coalition with the Republican Party, they are destined to be left behind by the two major liberal parties in the second round of the constituency elections.
Secondly the Free Democrats have not had a good time in opposition, despite winning the municipal elections in Autumn 1990, and one by-election in 1992. They have consumed three presidents and four faction leaders in four years. They had to find a new economic identity when shock therapy became unpopular. However progressive they can be on cultural policies, they have nevertheless been criticising the government's economic policy, calling for faster privatisation and liberalisation. They also came under attack from the far right when the parentage of some of the party's central leaders — the ex-Marxist philosopher János Kis, party president Iván Peto, and economist Tamás Bauer — was called into question by the now infamous use of the slogan "Hungarians must have Hungarian opposition". Eventually they managed to find a perfect candidate for the premiership: Gábor Kuneze, a former company manager with an old-fashioned moustache and impressive rhetorical skills, who even happened to have attended the same Catholic high school as the last
While SZDSZ was struggling with all the problems, and the government was becoming increasingly unpopular, the Young Democrats had an extremely good year in 1992, polling over 30%. They started as a liberal youth movement in 1988, with strong links in environmentalist and other post-modernist circles. However, they slowly abandoned these grass-roots connections, particularly since they may have become an obstacle in the pursuit of power. This was especially the case with their president Viktor Orbán, who has been called "the Tiger" by the leading political analyst László Lengyel. FIDESZ' image places a strong emphasis on expertise and they advocate supply side economics in combination with some monetarist voodoo, and, as one economist has noted, they often look more like a leasing company than a political party. In the Hungarian context, this akin to an accusation of fraud. Indeed, one mof the major issues which has subsequently reduced their popularity was a secret deal whereby they acquired a large sum on money by selling property given to them by the government for buse as a party headquarters.
### Gestures
With this case, as well as other FIDESZ' gestures towards the right, it slowly became apparent that they were playing a double game —ready to join either a liberal or a nationalist coalition. This made their most popular politician, Gábor Fodor, leave FIDESZ in November 1993, and run as the number-two on the SZDSZ list. After all, the FIDESZdream is over, and the party's support has dropped to around 15%, equall to both the SZDSZ and MDF. This outcome justifies previous analyses that doubted the realism of a liberal alternative, based on the fact that nowhere in European history have liberal parties formed governments on their own, let alone in Central-Eastern Europe amidst economic depression and nationalist cleavages. The liberals either have to join forces with conservatives against the left, or undertake, to some extent, social reform. In Hungary, the developments of 1993 have clarified these choices; FIDESZ chose the first option, and SZDSZ the second
The readiness of SZDSZ to ally with the Socialists became more and more apparent when they joined forces against authoritarian tendencies in government circles under the auspices of the Democratic Charter. This loose formation was established in September 1991 by leading liberal and socialist intellectuals, with a demonstrative absence of FIDESZ, who called the Charter the Trojan Horse of a social-liberal coalition. However, the openness of SZDSZ toward the left is not unconditional: they demand the neo-liberal economic pro-
gramme of László Békesi, an ex-finance minister from the last communist government, to be unchallenged by MSZP. Békesi rejects any suggestion that unemployment could be below 10%, and, further, promises an acceleration of privatisation, while initiating the rebuilding of Eastern markets as well as collective bargaining on the national
The bogey-man of the MSZP, and the strongest rival to Békesi is Sándor Nagy, leader of the largest trade union federation, MSZOSZ. He is also an economist and a bureaucrat from the previous regime, who was neglected as an unimportant figure until his federation won the elections for the control of the social security boards in May 1993. Now he is head of the National Pension Fund as well, while his deputy is the head of the National Health Fund. Their alliance with the MSZP dates back to the summer of 1991, when two anti-union laws were passed by parliament, with the only protest coming from the Socialists. Within the MSZP, it is trade union related politicians who are the most likely to listen to the left-wing of the party, although they refuse to take on Békesi over economic policy. Nevertheless, Nagy runs as number-two on the joint election list, after MSZP president Gyula Horn, while Békesi comes third.
### Quietly
MSZP has managed to settle internal disputes quietly, won two by-elections, and climbed to around 25% in the polls. This is partly due to the fact that the extra-parliamentary Social-Democratic Party (MSZDP) has continued to be unpopular in the eyes of the voters. So while both liberal and conservative voters will be split, on the left, Kádárist and Social-Democratic competition to the MSZP remains weak, and both are likely to support Socialist candidates in the second round unconditionally. Even so, broad anti-left alliances as well as anti-socialist propaganda are likely to emerge in the run-up to the elections, which could leave the MSZP with a dozen constituencies only.
They could still be declared the overall winner if they win the party list, but whether they can secure a majority government with the SZDSZ depends on the latter performing well too. Thus, the question is open: will there be a landslide towards the left and an MSZPSZDSZ coalition as a result, or medieval images take control over the electorate, and an MDF-KDNP-FIDESZ government will come into office in June. In the opinion of many, for example leftwing socialists, the MSZP in office with liberal policies would be a kind of disaster. But even if there is no party on the scene to offer a forceful alternative to the current capitalist restoration, does that invalidate the rule about choosing the lesser evil?
Mismanaged
Thus, the most important would be now to unseat a government which has abused public assets, mismanaged the economy, runs the country as a feudalistic dominion, and wants to remain in charge by any means necessary. This abuse has appeared especially extensive in the pre-election months. While public finances and foreign accounts are deeply in the red, the coalition timed quite a few pay increases and other achievements into the campalgn period. They raised the annual hard currency package which individuals can buy from
USD300 to USD800 from 1 April. They the fourth round of compensation vouchers in March, and public sector employers are receiving pay increases too. Pensioners have received good news"
vered by the post together with MDF adverts course, it is a pleasure for Hungarians, as for money than less, especially if that money is convertible. However, should be based not on foreign borrowing but on the development of productive capacity.
The government led by the MDF has proven incapable of delivering this. Even if one has no social-liberal alternative, they must be given a chance, for the sake of a more secular environment and a healthy reshuffle in the bureaucracy. *
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International Viewpoint #256 May 1994
The alternative dialogue
International Viewpoint #256 May 1994