Battle over lies speech is over; fight over financial crisis just begun
The passing of the budget was a new milestone in politics. It brought to a close the legitimacy crisis suffered by the government since Prime Minister Ferenc Gyurcsány’s Balatonőszöd lies speech was leaked in 2006. The debate about whether the minority government is capable of acting has ceased temporarily, or at least taken another form; from now until spring 2010 we can expect a lengthy campaign linked to the issue of the financial crisis.
Crisis good for government
With the passing of the tax laws the opposition failed in its attempt to force early elections which it regarded as the only redeeming solution. Due to a lack of political will no constructive motion of no confidence in the government was put forward, despite an opposition majority (in numbers, if not sympathy). The government was capable of pushing the most important bills through Parliament and it could even be said that it managed to create an impression of leadership by reacting constantly to the crisis through communicating its plans and crisis-management packages. The minority government stabilised its position by the end of 2008 – indirectly thanks to the crisis.
The Balatonőszöd period, however, was also brought to a close by the opposition’s realisation that instead of questioning the legitimacy of the current government it should now concentrate on gaining power in 2010.
Votes count for a lot
The focus of this year’s European Parliament elections is likely to be domestic politics, rather than the European or EU policies of the Hungarian parties. The 2004 EP elections and the referendum last March demonstrated the importance of such mid-term votes, with the former leading to a change of prime minister and the latter prompting the coalition split of the Hungarian Socialist Party (MSZP) and the Alliance of Free Democrats (SZDSZ). The significance of the June EP elections is heightened by the fact that they will be followed nine or ten months later by the 2010 general elections, so they can essentially be regarded as its first round.
The criteria and expectations of the main parties – Fidesz and the MSZP – differ from those of the smaller parties. Fidesz will aim to maximise its number of votes in order to demonstrate that it is stronger than the MSZP. A large-scale right-wing victory could cause irreparable damage to the Socialists. The MSZP needs to focus on survival and avoiding a Fidesz landslide victory in order to stand a chance in the 2010 general elections. The SZDSZ and the Hungarian Democratic Forum (MDF) need to be able to point to at least one EP representative to demonstrate that they have a place on the Hungarian political spectrum and deserve to be taken seriously, and that they are capable of passing the threshold to enter the next Parliament, something the SZDSZ could not do without the help of the MSZP in the last two general elections. The EP elections will also be a test of whether these parties are capable of conducting successful campaigns despite having lost support.
The crisis crunch
The focus of the lengthy campaign period will be the financial crisis. It is in the interests of the opposition to saddle the government with the crisis, while the government has attempted to place the emphasis on external influences that it is capable of halting or at least mitigating. In this respect the government has achieved a moderate victory, indicated by the temporary narrowing of the huge gap in support between the MSZP and Fidesz in some polls.
The impact of the financial crisis, however, will soon also be felt in Hungary in the real economy. The government faces a narrowing export market, lukewarm domestic demand, financing problems and growing unemployment. The six-pillar action plan to manage the crisis and stimulate the economy known as the Bajnai package is at best likely only to be capable of reducing the negative aspects of the coming year and a half. The worsening economic environment will provide both the government and opposition with sufficient ammunition throughout the year.
Turning a new leaf, perhaps
In 2009 it will be interesting to see whether the financial crisis will prompt the political elite to reach some form of consensus, and whether there will be a two-thirds parliamentary majority to support certain reform steps during this political term. The experience of the last few months shows that the opposition lent its support to the government’s crisis-management proposals. Fidesz approved the law capping government spending and the bank bailout package. Debate can be expected in two key areas that promise substantial results: the anachronistic and unsustainable local government law and the outdated tax system.