Sunday, January 25, 2015

Hungary: Next Stop on the Putsch Express

Submitted by Andrew Kahn for Voice of América
(Twitter @akahnnyc)

Once is a conspiracy theory. Twice is a coincidence. Thrice gets people wondering. Four times and the polished denials begin as conspiracy theory has become neoliberal reality.

So it is in the Balkans, Central and Eastern Europe and former Soviet regions. Yugoslavia, Croatia, Chechnya, Georgia, Ukraine. And where next? The number has gone way beyond four - the time of polished denials. To deny the conspiracy is meaningless at this point for it is not merely a conspiracy shrouded in the minds of tin-hat quacks but it is in the open for all to see; that is, whoever wishes to open their eyes to what is happening.

Were the choice words of Victoria Nuland not enough? Was the feting of John McCain by Ukrainian fascists not enough? Or the continuous duplicity in the words of any official tasked with parroting the lines of democracy devised by the most undemocratic geopolitical Machiavellis? When duplicity and hypocrisy mix in the cauldron of Washington's witches' brew being stirred in Brussels' kitchen and served at tables in Tbilisi, Kiev, Grozny, and now Budapest.

And why Budapest? Why now? Why Hungary? Perhaps George Soros sees his days being numbered and he has saved his country for last. A collusion with the elites to rule his own country. Rather ironic that the NATO operations for liberty are now knocking on the door of Mr. Soros' country. Or, perhaps, less conspiratorial - for who wants to peddle in conspiracies? - it is simply the latest salvo in the war to prolong the life of a dying United States-NATO hegemon.

One wonders whether the denizens of think tanks in Europe and the United States lay their heads down at night and count Russians and Chinese and any member of the Global South jumping over rapidly shrinking stacks of US dollars and Euros. One Russian Nationalist, Two Chinese Communists, Three Iranian Scientists. Like a drumbeat they see the alliance of Russia and China, Russia and its former allies, China and Africa, Iran and South America - the world with itself, devoid of a cowering pandering to the dictates of the post-WW2 leaders of freedom. Perhaps they see this as their eyes close on feather down pillows. They see this and they know the nightmare is nigh. A pill they need. A pill called Putsch that is branded and copyrighted with its own bold imprint on the pill - "Civil Society Democracy".

But I digress...why Hungary? Just a few years ago, Prime Minister Viktor Orban was going to become the darling of Washington. He was a right-leaning centrist of sorts whose views on immigrants would make Republican xenophobes proud but was sufficiently in agreement with the European Union and global capitalism when it came to economics and foreign policy. He was our buddy who could be counted on to serve as a bulwark against a possibly rising Russia under Vladimir Putin. But time passed and we find ourselves in the mid-20teens with the European Union in free-fall, wracked by a collapsed economy and Western European nations caught between liberal nebbishes and xenophobic rightists. And as time passed, Prime Minister Orban cleverly decided to see which way the winds were blowing and they were blowing towards the Kremlin. Center-right governments in Europe are being outflanked on their Right yet still slavishly remain within the EU paradigm - a suicide wish when farther-right populism is rightfully (if from the wrong ideological rationale) calling them out as puppets of Brussels. Public support for austerity is not that fashionable among blue-collar workers in Europe it should be noted and Orban was attuned to this.

So whether from a desire to stay in power or an actual interest in helping his right-leaning Christian-minded constituency that had been left to rot by Europe in the new post-Soviet world of liberalism, Orban decided to shift from ally of the West alone to hedging his bets between the West and Russia. Yet 2012 may have been the turning point when he left puppet status and he spurned IMF demands (more on this later) and began growing closer to President Putin who by this time had become the ultimate thorn in the side of NATO. A resurgent Russia was always being countered by the West - whether in Chechnya or Georgia - but the game had suddenly intensified with President Putin deciding that Syria would not be lost, Crimea would be re-unified with Russia and Russia would stand up once again to the West.

This move by Orban to become part of the Russian orbit - defined as any country that does not swallow any fact-free attacks on Russia - marked him for targeting. Not only was Orban talking to Russia and attempting to navigate a non-aligned course but he was supportive of the boogeyman South Stream pipeline that Russia was planning - a pipeline that would navigate territory not controlled outright by the West. For a former Communist country to put this red flag in front of the West was, of course, verboten. Nevermind that Hungary had every economic reason to be non-aligned and find economic benefit from wherever it could in the face of EU collapse. In realpolitik, non-aligned means sleeping with the enemy - the Russian Bear.

Some may see Hungary's moves - both its warming relations with Russia and support for the South Stream pipeline - as meaningless but for the United States every little country, every little leader, every little rebel group that opposes hegemony is a threat to be dealt with whether they are true rebels or are former allies like Orban who are now merely asking for some economic wiggle-room outside of IMF and Brussels dictates. And if there is really an honest questioning as to whether one country looking to have Russia as an economic partner is considered a threat one needs only to see the fate of the other Viktor - Viktor Yanukovych of Ukraine.

Indeed, even before Orban's moves towards Russia, it was his steps in regards to the banking industry that first set the international world - or at least the "world" as defined by the borders of Europe and the United States - on its head.

At the end of 2011, the Hungarian Parliament voted in favor of banking changes which would place the national bank under closer control of the elected government with the vice presidents of the bank to be selected by the prime minister as opposed to appointment by the Bank's president. It should be noted clearly that this was a 293-4 vote and not merely a party-line vote dominated by Orban's Fidesz Party. When complaints are made by Hungarian opposition that Orban was taking dictatorial control remember this 293-4 number. Additionally approved at that time was a merger between the national bank and its financial regulator - essentially, Hungary had decided that the Bank would be under civilian control as opposed to an "impartial" leader which, as we recognize, is often determined not by impartiality but rather by subservience to international Capital's wishes.

It was at this time the European Central Bank (ECB) began voicing concerns about the "independence" of the Hungarian National Bank and in the previous year of 2010, Orban did not renew a previous standby loan from the IMF, "opting instead for market financing and to keep the IMF out of government economic policies"i.

For Western Capital, this was clearly a slap in the face and a troubling sign that Hungary under Viktor Orban would use the IMF as it suited them as opposed to other way around. Orban had decided that taxes on the banking sector as well the nationalization of private pension funds was more important than renewing IMF standby loans.

The usual key words are being bandied about by the guardians of democracy. Orban is destroying civil society, cracking down on NGOs, opposing liberal democracy and he is becoming a dictator. Of course, no small reason for this Western claptrap is Orban’s decision to spurn IMF suggestions to cut pensions and remove a tax on banks. Again, one must recall that Orban is not anti-IMF by nature – having been negotiating with the IMF – but realizes that at a certain point, manure is simply manure. As he noted in 2012 in regards to IMF loan conditions he spurned: the deal “contains everything that is not in Hungary's interests.”ii This was followed in 2013 by the head of Hungary’s Central Bank, Gyorgy Matolcsy, writing a letter to IMF head Christine Lagarde and telling her to shutter the IMF’s Budapest office as its services were no longer needed.iii Hungary would fully repay its IMF loan with a bold “Adios” on the final check.

In a 2013 article in the New York Times, it notes, regarding the then-newly appointed National Bank Director Gyorgy Matolcsy:

There is also concern among economists that Mr. Matolcsy will seek to emulate the economic stimulus

known as quantitative easing used by the U.S. Federal Reserve or Bank of England - essentially, a way

of pumping money in the economy. That, economists warn, could prove perilous in a small country

like Hungary that cannot finance itself without foreign capital.iv

In essence, in the name of banking freedom and independence, the European Union, IMF and ECB were looking to keep their own monopolistic control over Hungary and perpetuate a master-servant dynamic that they promulgate and enforce with an iron fist in most of the developing and post-Soviet world. Hungary's decision to break from this was seen by the West (a grouping that should not be seen as including its stepchildren in Eastern and Central Europe) as tantamount to revolt. As the New York Times article hinted at, Hungary was looking for self-reliance and had begun to chart a course that would not lead to IMF loans or independent loans from Western European countries that it was in the process of politely spurning.

Not only was Hungary moving to economic independence - despite protestations that it was losing independence - but Hungary had made a conscious decision, as noted before, to be non-aligned in the rapidly deteriorating relations between the West and Russia. Strategically placed near Russia and within the region of an expanding NATO, this too was not to be accepted. The NATO encirclement of Russia could not be allowed to hit a roadblock with a pesky right-populist government in Hungary.

So it is that Viktor Orban has gone from reportedly praising U.S. Senator John McCain in 2008 as a "national hero in the most original sense of this expression" to John McCain now speaking of Hungary under Orban as "a nation that’s on the verge of ceding its sovereignty to a neo-Fascist dictator”.v

Warming relations with Russia, taxes on banks, nationalizing pension funds, spurning the IMF, traditionalist morality…all left for Orban to do to antagonize his former allies would be to send troops to support Hezbollah or some such effrontery.

Now there is never a country or leader who tries to break free of neoliberal policies and align with the enemies of Western freedom that is not marked for regime change for lack of a more diplomatic term. So it is that the question arises as to who in Hungary would take up the mantle as the reformer who will save Hungary from running headfirst – and intentionally - down the path to an illiberal democracy. In the words of Orban himself:

“…the new state that we are building is an illiberal state, a non-liberal state. It does not deny foundational values of liberalism, as freedom, etc.. But it does not make this ideology a central element of state organization, but applies a specific, national, particular approach in its stead.”vi

This is the point where it gets difficult for the United States and Brussels. Finding a neoliberal apparatchik in Hungary will be a wee bit harder than it was in Ukraine. While Ukraine had neoliberals who had no qualms about using fascist muscle and US State Department funds to gain power, Hungary is not so simple. Hungary has fascists in the form of the surging Jobbik Party that is pushing Orban from the right, a Fidesz Party of which Orban is a member that is charting a self-proclaimed illiberal path, a Socialist Party that barely registers 10% support and several minor parties with minimal support.

The likely attempt at this point will be a cobbled-together coalition of Fidesz officials who will bought back to support right-leaning liberal policies that Orban once supported, “reformed for the camera” Jobbik blue collar voters, apolitical but corruption-opposing college students, random members of the nebulously-defined civil society and most valuably capitalist technocrats to round out the bit. Blue collar workers as the goon squads fighting for a dystopic utopia where civil society’s technocrats will rule with a punch to the buttocks of the workers in the name of fiscal responsibility. Welcome back IMF.

Enter the Two Vs – Zsolt Varady and Gabor Vago – one the entrepreneur and the other the technocrat-politician.

To begin with, we have Mr. Varady, the capitalist tech entrepreneur and founder of the now-defunct Hungarian social media website If his name means nothing to you, etch it in your mind as his name was quietly making the rounds in reports on Hungarian protests in early 2015.

Politically, Mr. Varady came to (im)maturity this past October in his novel lawsuit against every Hungarian political party for the crime of “creating and maintaining a tax system that compels enterprises to commit tax fraud and tax evasion”. No real complaints with the dismantling of social welfare programs following the collapse of the socialist bloc. No. Simply a lawsuit blaming political parties for forcing corporations into tax fraud and evasion. Of all the complaints that could be laid before the feet of successive Hungarian governments, Mr. Varady decided on this.

Mr. Varady noted that his purpose in filing the legal proceedings - which he notes are merely “of secondary importance {to}…the related PR” was to improve “tax-paying morale”vii “To achieve an optimum tax system the state should be radically reformed. I cannot do that alone,” he says. “We need the support of considerable sections of society. The activities of civil society can serve the much needed umbrella for these messages.viii To paraphrase: Business doesn’t like Orban’s taxes so the working class which we will call “civil society” will serve our interests by being the democratic face for our plans to change the tax code in support of a minority.

Strike one in favor of Mr. Varady in the eyes of the West and IMF. Reform the tax code. Yet what of his political plans? Is he an idealist who wants to push a political agenda that may eventually conflict with foreign support for an Orban putsch? Well not at all. Indeed, he promotes as his next step in politicking the creation of “a website that helps people in civil society organization” which will be funded by “crowd-funding” and, here’s the kicker: “Perhaps we can also receive assistance from foreign foundations and probably émigré Hungarians will also chip in.”ix

One can see the wheels turning in Mr. Varady’s eyes. He of the recent “civil society” protests in Hungary. He of the white knight status who can step into the void as the bridge between all the necessary groups to bring democracy to Hungary and freedom from fascism to civil society. The strategy of street protest led by “civil society” is classic for who can oppose the desires of civil people? But keep his above comment in mind. “We” - meaning his class of neoliberal entrepreneurs seeking help from “foreign foundations” – “need the support of considerable sections of society” who will be the “umbrella for these messages”. Yes my friends, the pictures of civil society will be broadcast while the true agenda will be hidden. The goal, as Mr. Varady notes will be “new foundations” led by “teams of experts that are competent in their respective fields and are committed”x otherwise known as malleable technocrats.

Mr. Varady will be the counterpoint to Orban. An unelected Western-friendly gentleman simply looking to aid civil society against an elected modern-day “Mussolini” as Newsweek so appellated him.xi Mr. Varady will reverse the so-called “Putinisation of Hungary” and return ill-defined liberal democracy to the nation.

Lest anyone question Mr. Varady’s bona fides in being ready for the struggle, he has set the stage for force to be used by noting, despite lack of concrete examples, that “the Establishment” (read: the Orban government) “only understands the language of force”.

Not to be outdone by Mr. Varady is Gabor Vago, the fresh-faced but apparently politics-weary technocrat who bolted from the Politics Can Be Different (LMP) Party in early 2014 after alleged intra-party power struggles. Similar to Mr. Varady, his is a belief that politics is apparently déclassé and that a non-partisan movement is required. Anti-politics is the modus operandi of such civil society figures and one that plays perfectly into the hands of outside influences which will use the feint of anti-politics to push what ultimately becomes a purely economic-political putsch.

Many of the same talking points used by Mr. Varady were echoed by Gabor Vago in an interview with the business weekly Figyelo. Speaking of a December protest that he organized, Mr. Vago noted that the protest which included a punk concert - which he referred to as a “meta message” – was held for the purpose of promoting “a shift in the attitude of the tax authority”xii while using the protestors free-floating discontent as the muscle/street voice of the protest.

Mr. Vago, when asked about the next step replied: “Emphasis should gradually shift onto building communities…With time those micro communities can form a network.”xiii Perhaps based on his former political background, Mr. Vago was less circumspect than Mr. Varady in terms of speaking of the need for “power”. When queried regarding this issue he answered: “True, a change would require power. But that will only become a relevant question later.” When asked “When” he replied: “Perhaps within a year, perhaps in three or seven years’ time. One has to wait until the opportune moment.”xiv

As noted before, the amalgam protest movement requires technocrats and as Mr. Vago noted, without using the word “technocrat”:

Any change of elites would require the participation of experts. We need the support of people who took part in the transition [from Communism to the multi-party system] but not necessarily as politicians. People who have proved their talent in whatever field and think that the present regime is not viable. People who think their integrity puts them at a disadvantage and wish to turn Hungary into a country where you can be honest and competitive at the same time. Building from grass roots does not mean that we only organize ourselves in student clubs and romkocsma (alternative art pubs). We wish to approach people in all walks of life, ranging from top managers to unskilled rural workers.xv

In the same interview he was questioned as to how these groups will be coordinated:

Q: During the demonstrations against the Internet tax you were pleased to have involved young people who had been unaffected by politics until then. But only a few weeks on, only a fraction of those young people took to the streets. How can you involve people in long-term processes that hardly have any affinity to politics?

A: We need to identify the opinion leaders in existing groups and train them how to run such communities. Once we have won those opinion leaders, they will bring along their friends and the friends of friends. Demonstrations as such are not our ultimate goal, instead, to shape a democratic political community throughout Hungary.xvi

In essence, there will be a politico-technocrat elite overseeing the organization and release into society of nebulously-defined “opinion leaders” who will train people to run civil society “communities”. In theory it sounds wonderful – civil society having its rights. Yet rhetoric aside, the track record of Western-backed democratic upheavals needs to be viewed. The picture, as we know, is not too pretty of a sight whether in Georgia, Ukraine or elsewhere in the region.

Hungary is next in line for “democratic change” brought by the winds of the United States’ National Endowment for Democracy mixed with a touch of destabilization tactics from the CANVAS playbook of Srda Popovic.xvii

The question as to whether Hungary will meet the wrath of Washington and Brussels is not so much “if”, but “when”.

Once is conspiracy theory. Twice is coincidence. And now it has become reality.

viii Ibid.
ix Ibid.
x Ibid.
xiii Ibid.
xiv Ibid.
xv Ibid.
xvi Ibid.