Suspicions, Misconceptions, and Mistakes
March 24, 2011
In spring 2010 after the landslide elections (also known as the “voting booth revolution” by the ruling party), the Young Democrats (Fidesz) gained 68 percent of the seats in Hungary’s National Assembly. This unprecedented majority, often referred to as a “two-thirds” majority, empowers the government to amend or rewrite fundamental elements of the national legal framework. The two-thirds majority clause was added to the Hungarian legislation on the eve of the transition in 1989. It was meant to protect the gains of the newly forming democratic system from reversal by any power. This safeguard later became a major obstacle to reforming crucial areas, such as the pension system or local governments, as it would have required significant cooperation between the ruling and opposition parties.
Voters, many of them frustrated by the plummeting standard of living, ineffective governance, and corruption cases over the past eight years of Socialist Party (MSZP) rule, wanted to see these fundamental systems changed and supported Fidesz to gain its majority in parliament. Prime Minister Viktor Orban called the new era the “System of National Collaboration” and pledged systemic reforms based on this wide public support. Initially, most of the legislation was popular, such as halving the number of members of parliament from 386 to approximately 200 beginning in 2014; the decision to implement a flat-rate tax; and the pledge to offer dual-citizenship to ethnic Hungarians living abroad. Only after electing President Pal Schmitt and securing its position in the counties’ General Assemblies in October, Fidesz started to disclose more detailed communication about the unpopular measures to come. For example, the government levied a punitive tax on the severance packages of senior officials in the public administration and state-owned companies; reduced the power of the Constitutional Court and the Fiscal Council; extended the “crisis-tax” on multinational companies; transferred the savings accumulated in the private pension funds to the state-run social security system; and made six minor amendments to the Constitution. These changes conflicted domestic and international interests, as well as raised media attention to the government’s policies. Initially foreign criticism solely targeted Hungary’s economic policies, such as the “crisis-tax” imposed on mostly foreign-owned multinational companies or the country’s disagreements with the IMF and the downgrading of the country’s credit rating. This early attention and the fact that the country was about to assume the rotating Presidency of the Council of the European Union in January 2011 thrust Hungary into the international spotlight.