Hungary will have its Strongest Government since the Transition

Key Findings 

• With 68% of the seats in Parliament - a higher share than any other government in Europe - Hungarian Prime Minister-in-waiting Viktor Orbán and his Fidesz party will be able to form the most stable government Hungary has had since the transition 20 years ago.
• Even with a two-thirds supermajority, Fidesz’s fiscal hands will be tied by the terms of Hungary’s standby loan agreement with the International Monetary Fund.  
• Consequently, the beginning of Orbán's governance will probably concentrate on "symbolic" reforms rather than a deep structural overhaul. These include granting dualcitizenship to ethnic Hungarians in neighboring countries, a much-ballyhooed clampdown on corruption,  and “law-and-order” policies.
• Fidesz will also put a priority on reducing the size of Hungary's hugely expensive system of municipalities and government ministries.
• Fidesz will try to persuade the IMF to loosen some of the terms of its loan, such as the budget-deficit cap. In return, the IMF will probably insist that Fidesz enact some important but unpopular structural reforms. These will challenge the newgovernment's popularity in the medium term and erode its social support.

 

Support for the New Government: Truth and Consequences

 

 

 

• Fidesz won more than two thirds of the parliamentary mandates, gaining 263 out of 386 seats (the two-thirds mark is 258).
• This means the new government won’t have to negotiate with the ultra right-wing Jobbik party to modify laws that require a two-thirds majority for amendments. This opens an opportunity for Fidesz to weaken Jobbik's influence. Jobbik’s rhetoric will probably become even harsher, but it will be unable to influence policy.
• The Hungarian Socialist Party (MSZP) was able to win only two constituencies in the second round, both of them in Budapest’s District 13. Although the Socialists will be the second-biggest party in Parlaiment, their caucus will be less than a quarter the size of Fidesz's.
• The only independent to win a mandate was Edelény Mayor Oszkár Molnár, whom Fidesz kicked off its party list after he made blatantly anti-Roma, anti-Jewish and homophobic statements in 2009. Molnár was able to claim a second-round victory after Jobbik's candidate withdrew from the race and threw his support to the mayor. Once in Parliament, Molnár is expected to join Jobbik's caucus.
• Jobbik was unable to win any individual-constituency seats.

 

How to use the Two Thirds? 

• The supermajority represents a huge opportunity for Fidesz: The party will be able to modify the Constitution, change the system of municipalities, offer dual citizenship to ethnic Hungarians living in neighbouring countries, and nominate officials such as Constitutional Court judges without having to cut deals with other parties. The first agenda item to require a two-thirds majority will probably be reforms to the municipality system. Fidesz promised several times to cut the size of local governments, and they may fulfil this pledge even before the local elections due in October.

• Two thirds may also pose huge difficulties:
  • Since Fidesz will be able to do almost whatever its wants politically, the party will be solely responsible for its own decisions. It will not have the luxury of blaming its problems on the opposition’s unwillingness to cooperate or on legal constraints. If Fidesz needs to take unpopular measures, the only scapegoats available will be the outgoing Socialist government or the terms of Hungary’s international agreements (i.e. Hungary’s IMF loan contract or its euro convergence program).
  • Creating a unity in a 263-strong caucus will be a tall order. Huge conflicts may arise within Fidesz should the party try to modify the two-thirds laws. Some Fidesz MPs may oppose plans to cut the number of seats in Parliament or to reform the hugely expensive system of municipal governments. Also, granting citizenship to ethnic Hungarians in neighbouring countries will raise the risk of international conflicts or diplomatic isolation within the European Union.

Steps expected in the first six months

 

The new government will be formed by the end of May. According to the Constitution, the President will nominate the new prime minister, who will then have to be confirmed by a simple majority in Parliament. The confirmation of the prime minister also serves as official approval of his government’s program. Only one minister has been named so far: János Martonyi, who will return to his old post as foreign minister.

 

Fidesz aims to bring some bills to Parliament even before the new government officially takes office. Fidesz has declared the need for urgent action in some areas. The first measures will probably be: 

 

Public administration reform

• Creating a new system of governance by merging the current ministries into approximately six “superministries.” (This is similar to the British system).
• Smaller Parliament: Fidesz wants to reduce the number of MPs from 386 to 200, for which a change in the electoral law will be necessary.
• Smaller municipalities: Fidesz wants to halve the overall number of municipal councilors and modify the scope of authority for local and county governments. Local municipalities may lose some of their power, which may raise conflicts within Fidesz.
• Cutting regulations and eliminating bureaucracy in public administration.

 

Public safety 

• Fidesz's first steps will aim to improve the perception of public security. Fidesz promised to put 3,000 new police officers on the streets within two weeks and pledged to open several new police stations.
• Fidesz promised to implement a “Three Strikes” law that would sentence offenders who have committed three serious crimes to life in prison. This would require a modification of the criminal code.

 

Further important symbolic acts (“anti-corruption-package”)

• Party and campaign-finance reform.
• Investigation of 13 cases from the previous government corruption.
• An examination of the financial state of the country after eight years of Socialist rule. (Fidesz will initiate a bill on this issue).

 

Economic measures  

• A new agreement with the IMF, presumably including a higher budget-deficit target for 2010. The expected target will be 5-6% of GDP instead of the current target of 3.8%.
• Reforming the financial regulatory system: Options include unifying the National Bank of Hungary (NBH) and the Hungarian Financial Supervisory Authority. Fidesz will try to remove András Simor, governor of NBH.
• Tax modification: A long-term plan is expected. (According to earlier promises, Fidesz will try to significantly reduce the corporate taxes in 4, and the income taxes in six year). 

 

Further important steps in the future:  

• Granting Hungarian citizenship to ethnic Hungarians (excluding the right to vote). This may raise diplomatic conflicts with surrounding countries, especially Slovakia. 
• Presidential Election. Parliament will either give President László Sólyom a second five-year term or elect a new head of state. Possible successors include Szilveszter Vizi, former head of the Hungarian Academy of Sciences, and József Pálinkás, the academy's current president.

 

 

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There is an outside chance that votes cast abroad will change the final result in one of these two districts.

This measure was inspired by the U.S. law by the same name.