The Return of the Dictators

Adrian Nastase
Romania's former Prime Minister Adrian Nastase leaves Jilava penitentiary surrounded by media after serving nine months of a two-year sentence for corruption, in Jilava near Bucharest March 18, 2013. Nastase is the most senior Romanian politician to be jailed since the end of communism in 1989. Bogdan Cristel/Reuters

It's a bright spring afternoon in Freedom Square in downtown Budapest. Lampposts are covered with posters for the opposition parties which had contested the European elections last weekend. Protesters are gathering, loudly railing against Viktor Orbán, Hungary's prime minister, accusing his right-wing government of lies, dishonesty and hypocrisy.

The object of their anger is a half-finished statue, covered with tarpaulins and protected by police and burly security guards. The square has for weeks been the focus of flash-mobs, demonstrations and occasional mild scuffles. The statue, which is due to be unveiled by May 31st, commemorates the invasion of Hungary by Nazi Germany in March 1944. The archangel Gabriel, representing an innocent and virtuous Hungary, is being savaged by a giant eagle, representing Nazi Germany. The monument commemorates all the victims of German occupation and so is "morally exact and immaculate" says Orbán.

Opposition, liberal and Jewish groups disagree. Hungary, they point out, was a willing ally of the Nazis and more than 500,000 Hungarian Jews perished in the Holocaust. The arguments and the protests continue. Police and security guards watch from the side-lines but the atmosphere is relaxed and unthreatening. Democracy here seems to be in robust shape. But appearances can be deceptive.

Ten years ago, Hungary, Poland, the Czech and Slovak Republics, Slovenia, Latvia, Lithuania and Estonia joined the European Union. Bulgaria and Romania signed up in 2007, and Croatia, the newest member, joined last year. Like all new love affairs, that between the former Soviet-bloc states and Brussels started with high hopes. Half a continent, sealed off for 40 years behind the Iron Curtain, re-joined its western neighbours. The accession process had been slow and painstaking. Would-be member states had to prove that they met the "Copenhagen criteria" and reached high standards in rule of law, democracy, the free market, environmental protection and numerous other areas. Once in, border posts were pulled down, restrictions on the movement of goods and people were removed.

It seemed that, for the first time in history, Europe would be a peaceful and stable continent of liberal democracies, transformed by the warm embrace of the EU and its bountiful subsidies.

"We joined at the peak of accession. Central and eastern Europe was incredibly lucky because Europe was happy to have us, it was flush with money and it was willing to pay, also because Europe thought in the long term it would be profitable," said Konstanty Gebert, a Polish writer and journalist and veteran democratic activist under Communism.

But once the fireworks and the last notes of Beethoven's Ode to Joy faded away, mutual disillusionment soon set in. The new member states had been part of the Soviet bloc for 40 years. Empires rose and fell, but old reflexes died hard, self-interest most of all. Independent institutions remain weak, the rule of law shaky, civil society almost non-existent. Communist parties renamed and remodelled themselves as Socialists, using their connections to buy up state property and companies on the cheap. Short-termism is endemic. Civic reflexes are lacking.

Corruption scandals are exposed but fade away to a backdrop of shrugs from an often apathetic electorate. Populist leaders lambast the European Union, even as they funnel EU funds to companies controlled by their friends.

Sealed off behind the Iron Curtain, the new member states missed out on the great social upheavals of the 1960s and 1970s that reshaped western societies: anti-racism, feminism, gay rights, the erosion of deference to those in authority. Support for far-right parties is surging, hatred against Roma rising. All this is happening, not under dictatorships, but democratically-elected governments.


Some call these hybrid regimes "managed democracies," "electoral autocracies" or even "European Putinism." Whatever the term, something is emerging, argues Jan-Werner Mueller, professor of politics at Princeton University, "a form of illiberal democracy in which political parties try to capture the state for either ideological purposes or, more prosaically, economic gain."

What is clear, is that even as Brussels funds these governments, it has few means to bring them under control or to demand accountability.

In April 2010 Viktor Orbán's right-wing Fidesz party won an unprecedented two thirds electoral victory, after eight years of sloth and corruption under the Socialists. Orbán used his majority to rewrite the constitution and redesign the electoral system, triggering protests in Brussels and accusations of gerrymandering. He conceded minor adjustments, but no major changes. Last month Fidesz swept back to power with a second two-thirds majority – despite losing some 560,000 votes.

Orbán made his name as a liberal anti-Communist dissident, famously calling for Russian troops to go home in 1989. He then turned to the right and became a conservative. Earlier this year his government signed a €10 billion loan agreement with Russia to modernise Hungary's nuclear power station at Paks. While the EU is imposing sanctions on Russia, Orbán has locked Hungary into Moscow's energy orbit and made it dependent on Russian goodwill.

"Orbán is profoundly cynical," said László Rajk, a former Liberal MP and leading member of the democratic opposition under Communism and a liberal MP. "I don't think he believes in anything."

Except power. Immediately after Fidesz's victory in 2010, the new government issued a national declaration that called for "peace, freedom and unity" as though these could be summoned up at will. The joke in Budapest cafe society was that Orbán should now be known as the "Dear Leader" in the style of North Korea's ruling elite. The laughter has long since faded away. Large sectors of the economy are controlled by firms owned by Orbán's friends, notably Lajos Simicska, a high school and college friend of the prime minister, who runs the massive Közgép holding company. Transparency International says that Hungary is an example of "state capture" by powerful interest groups.

Independent minded journalists have been purged from state radio and television. Both are now a mouthpiece for pro-government propaganda. The state prosecutor's office, the national media authority, the State Audit office and the judicial authority are all run by party allies or former Fidesz MPs. The hiring and firing of teachers has been centralised, the publication of school text-books nationalised. The sale of tobacco has been nationalised and many expect alcohol to be next. Private pension plans have been appropriated and used to pay off the national debt.

Hungarian Octopus: The Post Communist Mafia State, edited by Bálint Magyar, a former education minister, and Julia Vasarhelyi, a sociologist, describes a country with an undercurrent of fear. This is not a fear of violence or imprisonment. Rather, it is a more subtle unease, of a teacher losing a job, a businessman seeing his contracts dry up because he supports the opposition.

Gordon Bajnai agrees. Bajnai served as a technocrat prime minister in a minority Socialist government from 2009-2010. "Hungary is en route to becoming an increasingly managed democracy. The government is run by a clan of people who were friends at university. Orbán is trying to build a post-Soviet country on the model of central Asia, Ukraine or Belarus."

Government officials strongly deny this. Hungary, they say, is a modern European democracy, where everybody enjoys full civil rights. "I absolutely reject that claim. This is fear-mongering," says Tibor Navracsics, deputy prime minister. "It is a sad thing because of the tragic past of Hungary. Everybody should feel that he or she is free. The Hungarian left blames us for their failures."

Institutions are still independent, says Navracsics and Hungary enjoys political stability. "There are no complaints about the State Audit Office or the public prosecutor. The separation of party and state is of crucial importance. We have reformed public administration and taxation and made Hungary more competitive. Do not underestimate the value of a stable democracy. Look at Slovenia, Croatia or Greece. There the governments are less stable. It affects everyday policy making."

Political Magpies

Hungary is under the spotlight, but endemic corruption, crony capitalism, a winner-takes-all political culture, fusion of ruling party and state, attacks on the free media, rising hatred against Jews and Roma are regional phenomena.

Many of the governments of the new member states are post-ideological political magpies picking at whichever terms in the political lexicon are most useful. Orbán rails against foreign speculators even as he courts German car companies, inviting them to build their factories in Hungary. Robert Fico, the Slovak prime minister, is the leader of the left-wing SMER. In 2006 SMER formed a coalition with the People's Party of Vladimír Mečiar, the autocratic former boxer who led Slovakia into international isolation, and the far-right Slovak National Party, known for its anti-Roma rhetoric.

Orbán's state takeover, and the EU's lack of response, has been watched with interest in neighbouring countries. Soon after the Romanian prime minister Victor Ponta took office in May 2012, he went to war against President Traian Băsescu and tried to impeach him. Ponta sacked the country's ombudsman, banned the Constitutional Court from reviewing acts of parliament and sacked the opposition speakers of both houses of parliament.

In this new-old world of short-termism, paranoia is rising. In Prague and Brno, municipal officials in city halls fear of being overheard is now so high that they have installed jammers to prevent outsiders from using laser microphones on their windows to eavesdrop. They may have reason to worry.

Petr Nečas, a former prime minister of the Czech Republic, was once known as "Mr Clean Hands" for his anti-corruption campaign. But Nečas was charged with bribery in February 2014, the highest government official to have faced prosecution in the Czech Republic. Necas resigned in June 2013 in a scandal that titillated even jaded Czech palates. His former mistress, Jana Nagyova, now his wife, is alleged to have used the intelligence service to spy on Nečas's former wife. Both Nečas and his wife deny wrongdoing. Miloš Zeman, the Czech president, then sidestepped parliament and appointed Jiří Rusnok, a former political ally, as prime minister of a caretaker government against the will of the Chamber of Deputies, the lower house of parliament.

Zeman dismissed criticisms that he was acting in an autocratic manner, describing critical journalists as "envious idiots who have never done anything proper in their lives." Further south, in Romania and Bulgaria, the picture is equally grim. Both nations joined the EU under special conditions, that their reforms of the judicial system, and measures against corruption and organised crime would be strictly monitored. The results are unimpressive.

By December 2013, 28 Romanian MPs had been convicted or were on trial for corruption. This may explain why that month parliament voted to strengthen MPs' immunity to charges of corruption. The snap amendment said they were no longer to be considered "public officials", so could no longer be held to account for abuse of office or bribery.

European officials were incredulous. Traian Băsescu, the Romanian president, denounced the move as "ten years of regress." The bill was thrown out by the constitutional court, in January 2014. That same month Adrian Năstase, a former prime minister of Romania, was sentenced to four years in prison for taking bribes and blackmail, his second prison term. Năstase denies wrong-doing and says the charges against him are politically motivated.

Last year in Bulgaria, fury at government corruption and incompetence reached such a pitch that six people set themselves on fire in protest. One was a father of five children.

Turnouts at European elections have traditionally been low. But the new member states contributed the six lowest turn-outs, from just 19.6% in Slovakia to 28.3% in Slovenia.

According to most statistics, the number of Europeans who distrust the EU has doubled over the past six years to a record high. The 2013 Eurobarometer Poll, conducted for the European Commission, found that 58% of all EU citizens tended not to trust the EU, almost doubling the 2007 level of 32%. Some 61% of Czechs tend not to trust the EU, compared to 46% of Hungarians and 39% of Poles.

The economic crisis is fuelling Euroscepticism, said Gebert. "People feel that European institutions do not inspire confidence, the crisis makes us scared and they don't feel protected. In such times you turn nationalistic, you assume that you can trust your own blood."

Safety and Subsidies

Paradoxically, while central Europeans may not trust the EU, they do feel that they are part of the project. Some 76% of Slovaks, 70% of Poles and Estonians, 65% of Lithuanians and 59% of Hungarians and 54% of Czechs felt they were EU citizens. History plays an important role. In Warsaw, Prague and Budapest, 45 years of occupation by Soviet troops are seared into the national consciousness, as is the Nazi occupation during the second world war, and before that, domination by the Habsburg Empire.

For some, such as Václav Klaus, Brussels is the new foreign overlord. Klaus, an economist, served as prime minister of the Czech Republic from 1993 to 1998 and succeeded the late Václav Havel as president from 2003 to 2013. More than any other figure Klaus has helped turn opinion in the Czech Republic against Brussels.

Nation-states are being undemocratically suppressed in favour of "pan-European governance" and ever-more "centralistic and undemocratic EU political institutional arrangements," he said, speaking in Budapest recently at a conference organised by the Danube Institute, a conservative think tank.

The continent, Klaus said, has "entered a post-democratic or semi-democratic era". What Klaus, Orbán and other Eurosceptic leaders do not mention is that their countries voted to join the EU and are also quite free, if they wish to leave. None will. Instead they look enviously at Poland, freer and more prosperous than at any time in its history. The country has now become the leading regional power and an important middle-ranking country in the European Union, helping shape Europe's policy to the Ukrainian crisis.

The economy is booming – the European Commission expects GDP to grow by 3.2% this year and 3.4% in 2015. Between 2007 and 2013 Poland received €101.5 billion in subsidies. Not just Warsaw, but provincial cities and towns have undergone drastic makeovers, with new parks, restored city centres, and a wave of shops, cafes and restaurants catering to the new middle class. "The aid from Brussels has radically transformed the country," says Gebert. "But EU membership is also a kind of moral vindication, that we central Europeans are just as important as Italians or Danes. We are finally getting our due."

Yet the region's Eurosceptics also have a point. They say that the EU that they joined ten years ago is not the same as today's union. The new member states voted to join a union more focused on free trade and a common market. The drive towards federalisation, a united states of Europe, is stirring unhappy memories. "All of the EU member states in central Europe are more democratic than the EU, which famously suffers from a democracy deficit," said John O'Sullivan, once a speechwriter for Margaret Thatcher and now director of the Danube Institute. "And the most hopeful route to increased democracy would be if the EU were to return some of its powers to national parliaments."

Either way, the EU has few tools for enforcing its standards of democracy, rule of law and fundamental rights once member states have joined. Infringement procedures against member states are slow, cumbersome and get bogged down in minutiae. The diplomatic isolation of Austria in 2000 after Jörg Haider's far-right Freedom party joined a coalition government faded away after nine months with little to show.

The main weapon is Article 7 of the Lisbon Treaty, which allows for the suspension of a member state violating the values laid down in the treaty. But Article 7 is problematic on two levels, one philosophical and one practical. At what point do the actions of a democratically elected government become undemocratic?

The Orbán government, for example, won a two-thirds majority in 2010 in a free and fair election. Hungarian officials argue that they have a clear democratic mandate for radical change. Secondly, Article 7 is rather like a nuclear weapon: it is such an extreme measure, it has never been used. The consequences of suspending a member state, and the political fall-out have until now been considered too dangerous. "Before Hungary nobody thought that there are possibilities for undemocratic political power in the EU," said László Rajk.

"The EU's strategy should not be a boycott. They should find smart ways of applying political pressure." Ten years ago the EU would have treated Orbán the way they treated Haider, says Konstanty Gebert, but it now lacks the will and confidence. "You don't do that if you have this gnawing doubt about whether the whole business is worth it. The EU is in such disarray that one Viktor Orbán in Hungary is not its main concern."

Shortening Fuse

But there are signs that Brussels is losing patience and taking a tougher line. MEPs in the last European Parliament were pushing for stronger safeguards and mechanisms to discipline back-sliding members. In January 2014, a report by Louis Michel, a Belgian Liberal MP, was adopted by the Committee on Civil Liberties, Justice and Home Affairs. The following month the European Parliament voted to set up a "Copenhagen mechanism", based on his report, to ensure that member states continue to observe the Copenhagen criteria.

The mechanism would set out penalties including suspension of funds, and a "freezing procedure" to ensure that member states suspend the adoption of national laws that might breach the EU Treaty. It was high time, said Michel "for the EU to put in place mechanisms to ensure the correct application of European values and the Copenhagen criteria, which should remain valid after entering the EU".

The resolution also called for a revision of Article 7 to include a wider range of penalties and allowing the European Parliament to launch proceedings on an equal basis with the European Commission. Such a move would be a major step to a federal European super-state. The focus should be on reining in Brussels, not wayward member states, says O'Sullivan. "It is a fantasy to imagine that bureaucrats or Euro-MPs in a faraway city have a better idea of how democracy should operate in Slovakia or Poland than national parliaments."

Hungary is under already close scrutiny from the EU over the way in which it distributes EU funding. For now, the country is not sending any more invoices to Brussels while EU officials investigate its procedures. On May 9th, Norway – not an EU member but a country that abides by most EU trade regulations – suspended its grants to Hungary after the government moved the administration of the funds from a ministry to a private company.

Hungary has received almost €12m of the €153.3m allocated but no more will be paid for now. "Hungary's actions in this matter are unacceptable," said Vidar Helgesen, the Norwegian Minister of EU and EEA Affairs. "Unfortunately, the Hungarian government has shown little willingness to find solutions that comply with the agreements Hungary has entered into."

Straws in the wind, or the first signs of a strategic shift? Either way, without a strong response from Brussels, Orbánism could easily become the region's norm, warns Bajnai. "The EU does not have the appropriate tools because it has not faced a problem on this scale. If I worked for the EU I would worry because many politicians in central Europe are watching with interest to see if Viktor Orbán will be successful. If so, many of them will conclude that this is the new fashion, this kind of managed democracy."