Internet Tax Is Just One Of The Political Scandals Hitting Hungary

  • 20 Nov 2014 8:00 AM
Internet Tax Is Just One Of The Political Scandals Hitting Hungary
By putting his Internet tax plans on the back burner, Hungarian Prime Minister Viktor Orbán also hushed his own internal opposition. Not that he can sit back: he has been making enemies ever since he launched his “freedom fights” in 2010.

That some of Hungary’s de jure allies may be plotting to remove the Hungarian prime minister has cropped up, of all places, in Heti Válasz, a weekly owned by Lajos Simicska, an oligarch thought to be out of favor with the PM. Granted, the idea was formulated tentatively in a reporter’s question in what seems to be a postscript to a moderated debate between two political scientists.[See this article.]

Speaking to this weekly, such an alleged plot has also been mentioned by sources close to the government. They even went further, claiming that Hungary may have become a buffer state in a reawakening Cold War in the wake of the crisis in Ukraine. Some have even said the US would welcome a new head of government that is more predictable than Orbán and more of a bureaucrat like, for example, Economy Minister Mihály Varga.

Even if was just guesswork on the pro-government side, it was too important to be ignored. The US Embassy in Budapest must have got wind of it because in an interview given to on Tuesday, Chargé d’Affaires André Goodfriend hastened to say his country was not working on weakening the Hungarian government. Then again, the anti-US rants of Fidesz founders and opinion leaders Speaker of the House László Kövér and journalist Zsolt Bayer are not the only indications that Hungary may be shifting, at least de facto if not de jure for the time being, from one sphere of interest to another.

“Why has there never been a coup in the United States? Because there is no American Embassy there” is an adage attributed to the late Venezuelan President Hugo Chávez that gets quoted in Fidesz circles these days.

In the meantime, Russia’s foreign press officer issued a statement chastising André Goodfriend, Chargé d’Affaires for criticizing the pro-Russian policies of the Orbán regime – a paternalistic gesture from Moscow that brought back memories of the first Cold War. This answers one of the important questions: understandably, Hungary’s Atlantic allies are opposed to Hungary’s shuttlecock policy, which also means that rumors about increased foreign intelligence activity may well be true. Although the EU’s rhetoric has been softer on the issue than that of a more vocal US, Heti Válasz has in fact augured EU counteraction for the near future.

There remains, however, another enigma: what has made Orbán change sides? It was exactly his 1989 speech on “driving out” the Russians from Hungary that put Orbán firmly on the political map, and, despite his numerous about-faces on issues of internal policy, he remained a more or less consistent Atlanticist up until 2013.

According to our sources, he has wanted to show the West that, financially, Hungary has put its eggs into more than one basket; on the other hand, some of our sources nodded in affirmation that the Hungarian government may have received some encouragement from the Russians – namely, that Moscow might be more sympathetic towards the issue of Hungarian autonomy in Subcarpathia than Kiev is.

Motivated “by political as much as by legal” reasons, the American ban on the entry of a number of Hungarian citizens has many aspects that remain unclear. It is as though keeping things unclear helped keep the scandal on the agenda longer: the Americans refuse to name the persons concerned while taking their time clarifying that the ban “only” concerns private trips.

Of all the persons, the Hungarian media have mentioned in the context of the list, so far only Ildikó Vida, head of the Hungarian tax authority (NAV) has made a statement that may be taken as admission. János Lázár, head of the Prime Minister’s Office, and Miklós Seszták, Minister of National Development, continue to deny the allegations. As far as businesspersons and consultants are concerned, Árpád Habony, advisor to the prime minister, has posted photographs of himself taken in Washington, while Péter Heim, director of Századvég Economic Research Institute Ltd., is threatening legal action.

Századvég – recently dubbed a mere money laundering operation by former Director of Research Tamás Mellár in an interview given to the daily Népszabadság – seems to be playing an important role here. In October 2014, the Prime Minister’s Office awarded a consortium formed by Századvég and two foreign enterprises of unknown background a HUF 1.3 billion contract for lobbying in North America in the national interests of Hungary.

In a statement to set the records right, Heim admitted having personal economic interests in Asia and Russia. HVG’s sources have indicated, for example, that he has links with the circles of Ukrainian energy mogul Dmytro Firtash, a pro-Putin businessman wanted by FBI.

Tensions in foreign relations may have been the main cause why Orbán was so quick to pacify his domestic critics. Upon his return from his holiday in Switzerland just a few days after a series of “Internet tax demonstrations” mobilizing tens of thousands of citizens and planned to go on for a time, the Prime Minister announced in a public service radio interview that “this simply cannot be implemented” – a sharp contrast to media reports citing government and Fidesz sources just a few days earlier that the tax expansion was Orbán’s personal cause.

Moreover, he was reported to have refused several personal pleas to back out. (The draft proposal has not been withdrawn until this issue’s deadline of publication.) Sources close to the government link these leaks – which, in retrospect, seem carefully crafted – to Orbán’s internal party opposition and remind that the public figure whose reputation has suffered the least damage in the Internet tax affair is Mihály Varga, the very minister responsible for submitting the country’s budget and tax laws.

However, government action to make Internet access more difficult has become a symbol of restricting freedom, with masses raising their critical voice against corruption, pro-Putin policies, and Orbán himself. As a matter of fact, these crowds may provide a more nourishing soil for the emergence of a new, combat-worthy opposition than any of the small leftist parties that – impotent as they are in their ruins – continue to survive thanks to the life support they receive in the form of state party finance.

Many see Fidesz as a handful of founding fathers in protocol positions surrounded by a multitude of yes-men while in certain places, like, for example, Szeged, chaos holds sway. In pro-government circles, Minister of the Interior Sándor Pintér is currently seen as Orbán’s strongest and most reliable supporter. And wherever Pintér stands, the country’s strongest business potentate, banker Sándor Csányi, chair and CEO of OTP Bank, will also be near, despite the fact that the entire bank sector of Hungary has been badly manhandled by the government.

Once dubbed a war by many, the belligerent posturing between Orbán and his old-time friend, party financing wizard Lajos Simicska, has also cooled down quite a bit. Be it as it may, at the end of October, Közgép, a company forming part of Simicska’s empire, in consortium with Swietelsky and Strabag, was awarded a hefty HUF 11 billion contract for the construction of interlaced tram tracks in Buda for the Budapest Transport Center after not winning any government tenders whatsoever for several months in a row.

However, for all the pains and troubles of political backbiting, domestic PR politics, and international freedom fights, Orbán’s regime is far from running out of energy, and it has not given up on taxing Internet services. Orbán has promised nothing more than to postpone the introduction of the levy and to hold a “national consultation” on the issue.

Contrary to what many critics of the proposed tax have suggested, the idea does have its merit from the perspective of the government. While smaller Internet providers are bound to founder, large ones might decide they have had enough – at which point the scenario suggested by Mellár might just become reality: in its own name or via its strawmen, the state may enter the market and simply bundle all the television channels it considers pro-opposition into its “Super DeLuxe Premium” package, drastically slashing viewer numbers. The government’s ambitions concerning the telecommunications market are nothing new; earlier stages were the nationalization of Antenna Hungária and the founding of a telecommunications subsidiary for the state-owned electricity wholesaler MVM.

In the meantime, the state-owned public service media are also moving closer to the market: 2015 will bring new programming to target young viewers, and a state-owned sports channel will also be launched. According to information available to this weekly, there are some people in government circles who would put more focus on news television service by setting up a new public service news channel similar to Simicska’s Hír Televízió.

Source: HVG

Translated by Budapest Telegraph

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