Volume 9 Number 4

Fall 2000

Feature

Hungary
     Zsofia Szilagyi

In the run-up to the EU’s Nice summit in December, the once-high hopes of swift accession into the EU were fading away in Hungary, one of the top candidates for the first round of enlargement to the east. The contradictory signals from Brussels and the EU governments, as well as the European Commission’s decision in late 1999 to extend negotiations beyond the five leading candidate countries to all ten Central and Eastern European applicants, have caused great disappointment in Hungary. That, together with Brussels’s unwillingness to set an official target date for enlargement, has prompted the Hungarian government to amend its strategy on the EU in 2000.

It began with a change in rhetoric. During the summer, Prime Minister Viktor Orban (Federation of Young Democrats–Hungarian Civic Party) stated that "there is life outside the European Union." His provocative statement—later echoed by his Finance Minister Zsigmond Jarai as well—stirred controversy in EU circles and was strongly criticized by the Hungarian opposition. But if viewed objectively, Orban’s rhetoric was only a natural reaction. Both at home and abroad, Orban is known to have developed a somewhat arrogant style of political communication. But his statement this time was not so off-the-cuff as it seems at first glance. It was sparked by the constant delays in the enlargement process and was designed to prepare Hungarians for a possibly longer wait.

From the outset, the eastward enlargement of the EU has been a mostly asymmetrical process—a set of negotiations between the EU and unequal partners, with one of the main obstacles to swift results being more the absence of a coherent strategy in Brussels than Hungary’s progress, or lack thereof. To emphasize this point, the Hungarian parliament issued a unilateral declaration in the fall, in the form of an all-party agreement, of its commitment and readiness to join the Union. The joint statement declares that it is Hungary’s "fundamental national interest to join the European Union at the earliest possible date and under the most favorable conditions attainable." Signed by the six parliamentary parties, the statement calls for swift accession and indicates that Hungary will be ready to meet entry requirements by the end of 2002, the working accession date set by negotiators.

This declaration has been a crucial step for Hungarian diplomacy. Coming after the Orban statement, the various parties’ reaffirmation of Hungary’s commitment to membership makes clear that there are no EU opponents in the Hungarian parliament, at least at the party level. In fact, this came as a surprise to many, both in Hungary and abroad. In 1999, Hungary’s NATO accession was marred by negative campaigning not only by pacifist groups but by the extraparliamentary extreme left- and right-wing parties—namely the communist Workers’ Party and the Hungarian Truth and Life Party (HTLP). Led by Hungary’s Le Pen–style nationalist, Istvan Csurka, HTLP has since entered parliament and was widely expected to continue its anti-Western campaign. However, so far neither of the two parties, on the right or left, has expressed any interest in taking up a consistent "no" agenda.

The change in government strategy also includes pushing for speedier entry negotiations. Hungary began negotiating with Brussels in March 1998, four years after the government had handed in an official application, and, by now, work on 13 of the 31 chapters of the acquis communautaire has been finished—the chapters "temporarily closed" in EU jargon. However, the most substantive issues are still to be tackled. These include taxation, company law, free movement of goods and labor, transport, and environment as well as agriculture, which constitutes half of the EU’s 80,000-page acquis. Speedy negotiations on these sensitive topics hold considerable risk for the government as these deals are irreversible and will seriously tie the hands of future governments, not to mention their budgets. A recent negotiation on energy policy, for instance, came to a disappointing end for Hungary. The government was forced to give up one of its key derogation requests (namely, deferring compliance in certain energy-related issues) and commit to a working deadline of January 2003 for meeting all the conditions of the acquis. This has placed a challenging legislative burden on the parliament and will require a major restructuring of the energy sector.

In fact, some recent rounds of negotiations suggest that the EU is insisting on derogations of its own in a number of crucial areas; these involve what many considered some of the main benefits of membership for Hungarians. The EU, for instance, wants only a gradual opening up of structural funds, which earlier Hungarian governments had used as a campaign tool to generate public support for the membership bid. Such regional funds would have provided billions of immediately available euros to help revive the undeveloped eastern part of the country. The EU would also like to keep its borders closed to Hungarian job seekers, thus keeping the lid on the free movement of labor—one of the most important symbolic aspects of membership.

Orban announced recently that Hungary is ready to accept a postponement on the free movement of labor and will try to get better deals in other areas. The free movement of labor is one of the riskiest of political issues and could even endanger ratification in EU countries. But the threat to EU citizens is exaggerated. One Hungarian survey shows that only a meager 3 percent of the Hungarian workforce would consider working in the EU, and no more than 1 percent would actually go forward with such a plan. According to a Brussels-commissioned report by the German think tank DIW, between 1990 and 1997, of all applicant-country immigrants to the EU, Hungarians accounted for only 16 percent, while Poles amounted to almost 50 percent. The same report concludes that if all ten applicant countries were to join in 2002, some 340,000 easterners might head west the first year, but thereafter their number would fall. Although not negligible, this figure is far less than the millions feared in the EU.

It seems that because of the EU’s growing unpopularity with its own citizens and its preoccupation with internal reforms, the overall political climate in EU countries is not particularly conducive to enlargement negotiations. Possibly, the only way that a post–Cold War generation of politicians can sell enlargement is to stress the economic benefits that enlargement will bring to both East and West. The old political slogans of a united Europe are fading away, in tandem with the final erasure of the Yalta-designed boundaries, to be replaced by new, technocratic market-oriented slogans that appeal to both the business communities and average citizens. EU Commissioner for Enlargement, Guenther Verheugen, takes every occasion to emphasize that enlargement should not depend on a battle of political buzzwords but should represent an informed political choice by EU citizens. But that will not happen until the enlargement project ceases to be a low-priority issue inside the EU itself.

According to a recent Eurobarometer poll, a mere 27 percent of those in the West think enlargement is of primary importance for the EU. That makes the Brussels bureaucracy the only consistent supporter of enlargement and adds to the democratic deficit between EU headquarters and member governments. Even Germany, once the biggest strategic partner of Hungary, has changed its mind, so much so that—even though the political and business establishment broadly favors enlargement—poll results indicate that Germans are the wariest of EU citizens. Only 20 percent of Germans think enlargement should be a priority. This is a major blow to Hungarian foreign policy, especially after the exceptionally amicable relationship between the governments of Helmut Kohl and Gyula Horn in the mid-1990s.

The Hungarian government, as a result, needs to think about marketing abroad. Poland has already begun a publicity campaign among EU citizens to boost support for its bid. (While Poland’s first-round position has been shaken during the last two years, it is almost unimaginable that France would agree to a first round without Poland.) Orban, in fact, has been trying to strike an alliance with some of the other leading applicants, namely, the Czech Republic and Slovenia—small countries whose integration would not be too complicated for Brussels. Political marketing to sell enlargement in EU countries is also more effective if done in groups than by individual countries.

Orban has repeatedly said that he does not see any alternative to EU membership, yet his foreign policy priorities have been different from those of his predecessors. For the two previous democratically elected governments, integration into the EU was the number-one foreign policy objective. Instead of exhibiting regular obeisance before the EU, however, Orban has used his tenure to build up a stronger Hungarian presence in the region. Western reactions suggest that some of those moves have backfired. For instance, his strategic partnership with former Croatian president Franjo Tudjman and his invitation for Chancellor Wolfgang Schussel of Austria to visit Hungary after the ominous general elections there were viewed with some suspicion by EU politicians.

Despite procrastination in the enlargement negotiations, the Hungarian public continues to be excessively optimistic about EU membership. Surprisingly, in fact, Hungarians’ attitudes toward EU membership have not changed since 1996. According to a January 2000 survey by the polling agency Szonda Ipsos, 68 percent of the population believes membership would bring more advantages than disadvantages, while only 14 percent says the opposite, and 18 percent is undecided. If it came to voting, 65 percent would vote in favor, with only 8 percent against; 18 percent is undecided, and 9 percent would not vote. Enlargement is perceived as a crucial political issue; 75 percent of Hungarians believe that it is as important as the system change of 1990.

The government embarked on a general EU-promotion campaign in 1996 and spends annually 200 million Hungarian forints on events and brochures. Since 1999, it has been receiving 3 million euros for the campaign from the EU. Despite this ongoing communications campaign, the public debate on EU affairs is still limited. Many complain that the "positive information" is indigestible, and that the EU’s operation is difficult to comprehend. The private sector has unleashed a barrage of complaints at the government for not providing enough information to assist with advance business planning. Yet, most of Hungary’s private citizens remain relatively ignorant of EU matters. A 1998 Eurobarometer poll shows that the European flag could be identified by only 53 percent of the Hungarians surveyed.

Such data would suggest that the high support in the country for EU membership is still largely symbolic and represents more the dream of a better life and better living standards than an informed political choice. And since the end results are still distant and costs and benefits are intangible, it is almost impossible to have a genuine public debate about EU membership. It is unclear what financial instruments Hungarians will have access to and how this will be reflected in the lives of families, entrepreneurs, pensioners, and students. Today, therefore, the governments’ communication strategy can be limited only to raising general awareness about the EU, for example, to explaining its institutions. What would certainly spark a wide debate would be the appearance of an organized anti-EU group. There are over 100 NGOs working with the government on various EU-related issues, including the dissemination of information, while it seems that funding is unavailable for any counterattack on such a consensus-based position. Institutional opponents, however, are an essential precondition for launching an informed political debate.

The democratic deficit in the enlargement project is, therefore, twofold. First, it has been building up in EU circles as a result of plummeting support for enlargement by member-state governments and citizens, and, second, the nontransparency of the project has produced additional democratic deficits in applicant states. So much so that the two, taken together, may well have opened a possibly irreversible democratic gap on both sides of the enlargement process. If the information campaign is not widened and deepened, slogans and buzzwords—rather than decisions by informed citizens—may push a "yes" vote through some future referendum. Membership in NATO was a less controversial decision for the public as the pros and cons were easily distinguishable, and NATO represented a onetime transition. The same cannot be said for gradual accession into a permanently changing EU. So if the EU keeps postponing enlargement, that will offer at least one benefit—it will generate campaigns for a "no" in Hungary and thus encourage an authentic debate instead of the present one-way monologue.

For some time, the image of the EU has depended largely on the performance of the Hungarian economy. Since the EU is set as the final goal of the entire economic modernization program, these two otherwise separate issues are closely associated in people’s minds. Eurobarometer surveys show that all the leading applicant countries have gone through a period of plummeting EU support, but this largely overlaps with these countries’ respective internal economic difficulties and stabilization programs. For Hungary, the worst year was 1995—the year of the rigorous austerity program designed by then–minister of finance Lajos Bokros—when the perception of the EU was 30 percent positive, 28 percent neutral, and 9 percent negative.

Today, the Hungarian economy is on a sustainable growth path, and its medium-term growth results are even better than those of some EU countries. Its macroeconomic indicators show an improving trend, and the country plans to qualify for monetary-union membership (EMU) in five to six years. Today, 76 percent of Hungary’s exports are directed toward EU markets and, according to a recent report by the United Nations Conference on Trade and Development (UNCTAD), it is the most open economy in Central and Eastern Europe. Its "transnationality index," an UNCTAD formula used to determine foreign presence in domestic markets and the domestic markets’ dependence on foreign ones, is around 22–23 percent, double that of other states in the region—suggesting that, because of the substantial presence of foreign investors, it is already well integrated with the EU market and, further, that it is highly dependent on it. Finally, one might add that Hungary’s capital markets are almost entirely liberalized, despite the fact that Hungarian investors do not have the same investing privileges and access abroad.

Therefore—in the case of markets—the earlier the enlargement, the better. Market analysts warn that late enlargement will have negative repercussions for the economy generally. Whenever it comes, analysts expect membership to boost stock exchange trading activities and stock values. But the real cause for celebration by the financial markets will be an eventual accession to the European Monetary Union.

In the three previous annual progress surveys, Hungary received a high ranking from the Commission. Earlier reports have praised Hungary for its progress in adopting the acquis communautaire and in its economic development—although calling for greater advances in stalled health-care reform and cuts in the budget deficit. While Hungary has been well on its way toward satisfying all of the economic and legal criteria for entry, however, Brussels voiced concern about social and political issues, such as the position of the Roma minority, the level of corruption, and the government’s meddling in media affairs.

The EU’s criticism of the Orban government for interfering with media affairs is an accusation that still rings true, even today. For the second year, the party-appointed supervisory boards of the public media are functioning without opposition members, since the parliament failed to agree on new appointment rules following the general elections in 1998. Passed by the previous parliament, the flawed media law prescribes inflexible rules for the selection of board members; such rules were designed according to the parliamentary power structures of that era. The government has also been using taxpayer forints to create a "healthy balance" in the media mix, for example, by financing pro-government outlets.

With the surprising exception of the media issue, most of the above problems received a fair degree of attention in the November report. As regards the democratic criteria for entry, the situation of the country’s 100,000-strong Roma population seems particularly problematic. Brussels requested that the government divert more funds to combat school segregation in the eastern parts of the country, to help the communities integrate better with Hungarians, to fight job discrimination, and to deal with police brutality.

The European Parliament’s latest report on Hungary listed the government’s neglect of "interest-coordination forums" as also problematic. The Orban cabinet has showed less enthusiasm than its predecessor for working with employee organizations and trade unions in the process of drafting public policy. The last two years have witnessed a gradual disintegration of such forums, which involve government representatives, trade unions, and employers, and were previously set up for the purpose of coordinating the divergent interests of various sectors of society. Originally, these councils played a crucial role in democratic public policymaking and helped the government show symbolically that it remained in touch with its electorate.

Zsofia Szilagyi is a Ph.D. candidate at the European University Institute in Florence.

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