Nations in Transit - Hungary (2003)

Capital: Budapest
Population: 10,100,000
Polity: Parliamentary democracy
Economy: Mixed capitalist
Status: Free
PPP: $12,416
Private Sector as % of GDP: 80%
Life Expectancy: 72
Religious Groups: Roman Catholic (67.5 percent), Calvinist (20 percent), Lutheran (5 percent), other (7.5 percent)
Ethnic Groups: Hungarian (90 percent), Roma [Gypsy] (4 percent), German (3 percent), other (3 percent)

Introduction

Hungary's systemic change in 1989 represented the starting point of what has proven to be a most successful democratic transition. To be sure, the transition has not progressed without setbacks and disappointments. Its speed and success, however, have made Hungary clearly one of the most solid democracies among the post-Communist states. Four rounds of democratic national and local elections have been successfully completed at four-year intervals; citizens have embraced the promise and possibilities of civil society to improve their lives and those of their fellow citizens; an independent media has played an increasingly prominent role in the country; and the Hungarian Constitution and court system have provided a framework that ensures the rule of law within the country.

The transition to a capitalist economic system was built on the foundation of experiments with "goulash communism" (effectively a series of economic liberalization steps) in the decades preceding 1989. The subsequent transition under a democratic government proceeded rapidly as Hungary moved to privatize its state-owned proprieties, abolish price controls, open its markets, and guarantee property rights. These changes attracted significant foreign direct investment in the country and greatly facilitated the steady improvement of the economy, following a short downturn in the early 1990s. Today, Hungary's economic performance is generally appraised as among the strongest of the former Communist states. This is evidenced by steady growth in gross domestic product and controlled inflation and unemployment figures.

The 12 months covered in this study arguably represent one of the most tumultuous and significant periods in Hungary's post-Communist transition. The year's events highlighted many of the greatest challenges to the long-term stability and development of Hungary, as well as the promise for Hungary's more complete integration into Western Europe. Three closely related issues dominated Hungarian news in 2002. How each was resolved speaks to the strength and character of Hungarian democracy. The first of these stories related to Hungary's interactions with its neighboring states, where hundreds of thousands of ethnic Hungarians live. The implementation of the Status Law and discussions about the post-World War II Benes decrees were the most important parts of this issue. Second, the parliamentary and local election cycles resulted in a year-long conflict between the two largest parties in Hungary, the Federation of Young Democrats-Hungarian Civic Party (FIDESZ-MPP) and the Hungarian Socialist Party (MSZP). The narrow election victory of the latter over the former in April parliamentary elections preceded a similar outcome in the October local elections. Finally, the issue of European Union (EU) accession played out through the year domestically as a question of the terms under which accession should occur and from Brussels as a question of when and under what terms Hungary should be admitted to the EU.

The Status Law was formally approved in Parliament in 2001, and its implementation began in 2002. It is designed to provide support to Hungarians living beyond the modern boundaries of the country by providing them three-month work permits in Hungary, financial support for families whose children study in the Hungarian language, and other benefits. Acrimonious debate continued through the year about the implementation of the law, centering on its compatibility with EU law and the specific terms for implementation in Slovakia and Romania (states with the highest numbers of ethnic Hungarians among Hungary's seven neighbors). This conflict over providing benefits to fellow Hungarians was made even sharper when former Prime Minister Viktor Orban urged the repeal of the Benes decrees, which had been promulgated in 1945 in the former Czechoslovakia and mandated the removal of Germans and Hungarians from that territory.

Discussion of the treatment of and opportunities for Hungarians abroad overlapped the spring parliamentary and fall local elections. Through the campaign, the governing coalition, led by the FIDESZ-MPP and including the Hungarian Democratic Forum (MDF) and remnants of the Independent Smallholders Party (FKGP), consistently pushed for the need to connect with and protect Hungarians beyond the borders as a "strategic goal" for the country. The coalition argued for EU accession on terms that were most favorable for Hungarian national interests. They also campaigned on their record of successful economic development and leadership over the previous four-year period. In contrast, the opposition parties led by the Hungarian Socialist Party (MSZP) and the Alliance of Free Democrats (SZDSZ) focused more on domestic issues, including their commitment to raising wages and pensions, while arguing strongly for Hungarian EU accession.

To most political observers, the parliamentary elections of April 7 and 21 produced a surprising outcome. Instead of the reelection of the coalition led by the FIDESZ-MPP, voters called for the return of the MSZP and their previous coalition partner, the SZDSZ, by the narrowest margin. This change in leadership came about despite continued strong economic growth within the country and tangible evidence that the FIDESZ-MPP government had taken Hungary nearly to EU membership. Record levels of voter participation were achieved in both the spring and fall elections. Also significant was the fact that the national elections resulted in only four parties entering Parliament – down from the six that had participated in each of the three previous post-Communist Parliaments. The extremist Hungarian Party of Justice and Life (MIEP) was not returned to the Parliament, missing the necessary 5 percent threshold by less than 1 percent. The scandal that emerged following the parliamentary elections regarding the new prime minister's work as a Communist-era counterintelligence agent resulted in the launch of two parliamentary investigations and new discussions about the ineffectiveness of Hungary's lustration laws and more generally the country's ability to come to terms with its Communist past.

While all of the major political parties in Hungary have consistently supported EU membership (with the notable exception of the MIEP), the terms of entry proved to be an important point of debate between the two major political blocs. It was not until late in 2002 that the EU actually decided on the kind of enlargement that would take place, a "big bang" bringing in 10 new countries simultaneously in 2004. The debate in Hungary centered on the speed of extending full membership benefits, particularly in the sphere of agriculture. Orban's pronouncement before the election that there is life beyond the EU caused many to question the commitment of the FIDESZ-MPP to leading Hungary into the EU. In the end, though, Hungary received a formal invitation to join the EU on December 13. A referendum is now scheduled for April 12,2003, for the public to signal its support for accession. The vote is expected to provide the prime minister with the necessary support to sign the formal accession treaty on April 16,2003. Formal membership, in turn, is to begin on May 1,2004.

The events of 2002 did much to strengthen and make permanent democracy in Hungary. There were, however, reasons to remain concerned about the quality of this democracy. The situation confronting the Roma minority remains dire, although the inclusion of four Roma in Parliament provides some hope for change. Likewise, the persistent poverty and underdevelopment found particularly in the eastern half of Hungary reflects a country in which the benefits of the systemic change have not been distributed evenly. A cloud of doubt concerning the transparency and ethical behavior of members of government also continues to linger over Hungary. The association of the FIDESZ-MPP government with corruption certainly contributed to its unexpected election defeats. However, the fact that the sharp debates and protests of 2002 stayed essentially within the boundaries of the law has meant that Hungary has emerged stronger from a most contentious year. The country enters 2003 with a clear path toward EU membership and with a government that has made commitments to address serious challenges. The vigorous opposition promised by the FIDESZ-MPP can only serve to ensure that continued strengthening of Hungarian democracy is achieved.

Electoral Process (Score: 1.25)

The laws governing Hungary's electoral system have remained essentially unchanged since the first democratic elections in 1990. The complex electoral system that emerged from the compromises of the regime change allocates the 386 seats in Parliament based upon election of 176 representatives from single-member districts, as many as 152 from regional party lists, and the remainder from national party lists. This process is completed through two rounds of voting. After the first round, only candidates in the single-member districts that obtain 50 percent or more of the vote are declared winners, while districts without this clear victor require a second round of voting. The mechanics of the second round of elections (including vote redistribution) favor the majoritarian over the proportional side of the system by rewarding the party with the strongest support after the first round.

This electoral system has served Hungary extremely well – allowing three successive governments to serve their complete four-year mandates. Like the previous parliamentary elections, the 2002 cycle was found to be free and fair by the Organization for Security and Cooperation in Europe (OSCE). The elections also produced record turnouts of 70.5 percent in the first round and 73.5 percent in the second. Voter participation in the October local government elections also hit a record level of 45.7 percent. The spring elections resulted in the most evenly divided Parliament in Hungary's post-Communist era. It also led to the fewest parties ever represented. The leading party after the election was the MSZP with 178 mandates, which together with the 20 seats of their coalition partner, the SZDSZ, gives them a 10-seat majority in Parliament. The leading party from the 1998-2002 Parliament, the FIDESZ-MPP, received 164 mandates, while the MDF, their former coalition partner, received 24 seats. The election ended 12 years of representation in Parliament for the FKGP, as well as the 4-year stint of the MIEP.

The postelection efforts of former prime minister Orban to create a new party that would unite the Right into a single grouping are worthy of continued attention. This effort would subsume supporters from the MIEP, the Christian Democratic People's Party (KDNP), the Christian Democratic Alliance (MKDSZ), Lungo Drom (a leading Roma group), some pieces of the FKGP, other civic associations, and presumably – though less likely – the MDF into a grander catch-all party of the Right. On the Left, the MSZP and the SZDSZ appear poised to remain separate but closely linked political parties. By year's end, MSZP had begun discussions about renaming themselves social democrats. Such a change is unlikely to result in substantive adjustments in the party's politics. Among nonparliamentary parties, including the MIEP, the FKGP, the KDNP, the Worker's Party (MP), and the Center Party (CP), only the MIEP can be expected to play an active role in Hungarian political life.

The very contentious relationship between the governing parties and the opposition can be expected to last throughout the new parliamentary term. However, the fact that the opposition parties hold such a large percentage of the seats in Parliament (49 percent) actually has the potential to facilitate positive changes in the country, since the opposition commands significant and active support from the Hungarian public. In contrast with the past Socialist-led government (1994-1998), the current coalition will have to work with the opposition to muster the necessary two-thirds majority vote needed to complete constitutional changes. This was already the case for passage of the constitutional amendments necessary for EU membership.

Political parties in Hungary do not attract significant attention from average Hungarians outside of election years. Even for the approximately 2 percent of the population that formally belongs to a party, actual participation and influence on party elites is minimal. Andras Korosenyi, a noted political scientist from Hungary's Eotvos Lorand University, explained this fact by stating that "after half a century of one-party dictatorship, a strong antiparty atmosphere and political culture emerged in the political thinking of the opinion-leading elite and intelligentsia and in the mass culture." As noted, the number of political parties in the current Parliament is two less than in each of the previous three democratic Parliaments. This is a product of the 5 percent threshold clause, the strength of the majoritarian tendency within the electoral system, and the ongoing consolidation process within and among the parties.

Women and particularly minority candidates have not fared well in national elections. Their showing on the local level is somewhat better. As a result of the 1993 Law on Representation of National and Ethnic Minorities, the 13 recognized minorities in the country have been allowed to elect their own local self-governments. In 2002, these self-governments numbered 3,158. At the national level, representation of Roma, Hungary's largest minority group, has long been problematic. Efforts throughout the 1990s to ensure Roma representation either by guaranteeing seats, lowering the threshold for party representation of minority parties, or creating advisory seats in Parliament have never been implemented successfully.

In the fall of 2001, the FIDESZ-MPP signed the first formal agreement between a major political party and a Roma organization, Lungo Drom. In February 2002, MSZP's prime ministerial candidate, Peter Medgyessy, met with 33 other Roma groups and gave his "personal pledge to find a solution to major problems affecting Hungary's Roma minority." These agreements and commitments resulted in four Roma being seated in the 2002 Parliament, two representatives from the FIDESZ-MPP and two from the MSZP. Roma now make up approximately 1 percent of all parliamentary seats – up from 0 percent in the previous Parliament. Female representation in the MSZP-led Parliament is 9 percent (34 out of 386 seats), slightly more than the 8 percent during the previous FIDESZ-MPP term. The MDF's Iboya David is the only woman leading a major political party today. David served as the sole female minister in the FIDESZ-MPP government. Three of the 14 ministers in the current government are females.

Ferenc Madl has served as Hungary's second post-Communist president since June of 2000. His term in office will expire in 2005, though he is eligible under the Constitution to be elected to one additional fiveyear term. The weak powers of the president are a product of the negotiated transition in 1989. Hungary's indirectly elected presidents must be chosen by a two-thirds majority in the Parliament in either of the first two rounds of voting. If a third round is necessary, as it was in electing Madl, only a simple majority is necessary. Throughout the transition, Hungary's presidents have played a small yet not insignificant role in bringing balance to Hungarian political life. Throughout 2002, President Madl was called upon to calm the sometimes harsh rhetoric of the election campaign. In the postelection scandal involving Prime Minister Medgyessy, Madl sought to reduce the tensions over the affair by meeting with the leaders of the parliamentary parties. He ultimately agreed to the establishment of a parliamentary commission investigation into the matter.

The 2002 elections reversed a pattern of declining voter turnout in Hungarian elections that had caused some to question the strength of Hungarian democracy. The competitiveness of the elections brought thousands more Hungarians into the electoral process and prompted voters to carefully consider the different visions that the two main political blocs offered and what these meant for themselves and Hungary. At the same time, though, the contentiousness of the elections produced some extremely harsh and inappropriate rhetoric, created divisions among average people who supported opposing blocs, and produced accusations about candidates and the proper conduct of the voting that can be quite damaging to the legitimacy of elections and democracy in general.

Civil Society (Score: 1.25)

Hungary's civil society began its dramatic growth in the years immediately preceding the systemic change in 1989 with passage of the Laws on the Creation of Legal Foundations (1987) and Freedom of Association and Assembly (1989). Since the first democratic elections in 1990, there has been a significant growth in the number of civil society actors and their organizational capacity. Official data from the Central Statistical Agency (KSH) indicate that over 68,000 organizations had been registered at the end of 2002. This compares with 67,151 organizations in 2001 and 65,335 in 2000. The numbers are considerably inflated, however, as many of these organizations are no longer active, have only a negligible existence, or, worse, were created for nefarious purposes (including profit and tax evasion). That said, the number of organizations meeting some basic level of activity is estimated at between 20,000 and 30,000.

According to the KSH, in 2000 more than 400,000 individuals volunteered time at organizations (approximately 4 percent of the country's population). They provided the equivalent amount of work of 17,000 full-time employees. More than 56,000 workers are employed full time at nongovernmental organizations (NGOs), with an additional 6,500 employed on a part-time basis. This represents approximately 2 percent of national employment. Laws passed allowing citizens to direct 1 percent of their income taxes to a specific part of the public sector (1996) and to public benefit organizations (1997) have improved both the viability and the transparency of Hungary's NGO sector. The law is particularly worthy of attention as it represents a means for 4.2 million taxpaying Hungarians to direct 1 percent of their yearly income tax to a church or the national budget and an additional 1 percent to a properly registered NGO.

Hungary's civil society comprises a wide range of organizations and functions in all parts of the country. Budapest, which accounts for 20 percent of the country's population, dominates the sphere. KSH data reveal that in 1993,28 percent of NGOs were found in the capital and held 71 percent of the sector's income. By 2000, these numbers had improved slightly, with 26 percent of NGOs being based in Budapest and working with 63 percent of the sector's total income.

Religious organizations received strong support in their development during the term of the FIDESZ-MPP. The FIDESZ-MPP plan to change the system governing state support for churches was to have been implemented in January 2003 but was canceled by the MSZP government. This system would have funded churches based upon the number of individuals who identified themselves with each church in the national census. In a country that is dominated by Catholics (more than 60 percent) and Calvinists (more than 20 percent), these "historic" churches in particular stood to receive significant support from the state. Organizations promoting women and minorities in the country are numerous but suffer from the same kinds of institutional weaknesses as other non-economic groups in Hungary. While quantifying the number of such organizations or their influence in Hungary is difficult, it can be easily said that both sets of organizations are successful in bringing their respective issues to the attention of the public and the government. NGOs affiliated with or funded by Western organizations are consistently stronger and more influential and possess a higher profile within the country than domestically organized and funded groups.

The aftermath of the April parliamentary elections brought an important new set of organizations to the fore in Hungarian civil society. Often referred to as "civic circles," these were essentially protest groups that emerged to challenge the accuracy of the parliamentary election results and the fitness of Medgyessy, a former agent of the Communist-era intelligence service, to serve as prime minister. While the independence of these organizations from the FIDESZ-MPP or the MIEP is questionable at best (former prime minister Orban actively encouraged their development and efforts), the groups have proven that they can draw thousands of citizens to their protests and attract significant national attention. By year's end, these civic circles had moved from staging street protests and other spontaneous actions to the more traditional organizing activities of political groups.

The stability of Hungary's civil society can, in general, be viewed favorably. The sector benefits from a large number of organizations, increasing domestic resources being directed into it, growing numbers of citizens becoming aware of the role that the sector can play in the country (particularly through the 1 percent program), and a commitment from the new MSZP government to institute further reforms. However, the sector has not developed the kind of influence and strength within Hungary that was expected and has transpired in other Visegrad countries. After an initial surge of development and growth in the years immediately following the collapse of communism, the sector has clearly stagnated. The United States Agency for International Development's NGO Sustainability Index provides an even less sanguine appraisal of Hungary's NGO sector. While still classified as "Consolidated," Hungary's NGO sector has actually become weaker over the four-year history of the index. Since 1998, Hungary has fallen from having the strongest NGO sector among post-Communist states to having the fifth strongest. In part, this change can be explained away given expected improvements in the NGO sectors of other states in the region and other methodological considerations. The concerns raised in the 2001 index, however, regarding sector weaknesses in organizational capacity and advocacy do demand serious attention. The report laments the sector's "almost absolute lack of knowledge and capacity in advanced financial management" and calls for "substantial improvement in the accountability, transparency, and professional fund-raising capacity" in order to "gain the trust of private donors and decrease dependency on state and foreign donors." Likewise, the report calls for an increase in "bottom-up" representation so that more effective advocacy might be realized.

Given that nearly half of all NGOs in Hungary have annual incomes of less than $2,000, and that state financing of the sector is approximately 30 percent (against averages of 40-60 percent in EU states), the challenges facing the sector are obvious. While there are many very successful organizations, the vast majority remain weak, are overly committed to government subsidies, and lack sufficient institutional power or training to be completely independent and effective. Continued strengthening of the 1 percent program and the laws on public benefit organizations will positively impact the development of Hungary's civil society.

Trade unions represent an important segment of interest groups active in Hungary today. With the return to power of the MSZP, they likely will enjoy an enhanced standing. The systemic change in 1989 brought with it the growth of independent and new trade unions and an institutionalized (though changing) system of interest reconciliation linking government, unions, and employers associations. This system of interest intermediation was reorganized during the FIDESZ-MPP government but was returned to a more familiar format in June 2002. While each Hungarian government has recognized the necessity of working with the unions and business associations, particularly on employment issues and to a lesser degree on social policy, this has not meant that they have always been granted equal footing in negotiations or even true consultations. That said, the formal institutions of interest representation that have existed through Hungary's transition have provided an important forum for addressing some of the country's most pressing problems.

After an initial steep decline following the systemic change, union membership has leveled out at approximately 25 percent of the country's workforce. Unionization rates are generally much higher in the public sector and lower in the private sector. The National Association of Hungarian Trade Unions represents more than half of Hungary's unionized workers and has by far the most influence on the Hungarian government. Numerous organizations exist to represent farmers and businesses, and the largest of these have been included in the formal tripartite bodies with the unions and government. Many of these organizations, though, are particularly weak.

Numerous public policy institutes have emerged in Hungary since the transition. Two significant kinds of groups can be identified, those providing economic analyses and those providing partisan political analyses. The former have carved out a strong niche within the commercial Hungarian market and provide valuable insight into the economy. The partisan groups, having close affiliations with the larger political parties, provide forums for important discussions and international connections but often can be criticized for their less than objective analyses.

Hungary's educational system can be viewed as free from overt political influence and propaganda. During the latter half of the 1990s, the system of higher education began a significant restructuring that has included the completion of several steps to accommodate a greater number of students. Public schools remain by far the most important venues for education in Hungary. This is changing, however, as increasing numbers of students are being educated in parochial or other private schools. In 2001,95 percent of elementary students, 86 percent of secondary students, and 89 percent of higher education students attended public schools. In comparison, in 1995,96 percent of elementary students, 94 percent of secondary students, and 91 percent of higher education students were educated in public schools.

Independent Media (Score: 2.25)

The intense struggle to control Hungary's media has run through the entire post-Communist era. The "media wars," as they often have been called, have occurred against the backdrop of a rapidly changing media sector. While Hungary's Constitution guarantees freedom of the press, the exact parameters of this freedom have been the subject of ongoing court rulings and parliamentary acts. One of the most significant of these was the long awaited 1996 Law on the Media, which provided for the creation of a permanent regulatory agency – the National Television and Radio Board (ORTT) – and separate boards for state television and radio to be governed equally by representatives of the governing coalition and the opposition. During the four-year term of the FIDESZ-MPP, the proper apportionment of seats on these boards to the government and opposition parties became an enormous political issue. The resulting controversy attracted international attention to the media situation in Hungary and highlighted efforts by the governing coalition to stymie negative media coverage. Under the new government, the politicization of the boards has not subsided.

Today, Hungarians receive their news overwhelmingly from private sources that are foreign owned. Whereas at the beginning of the transition, state-owned television stations held a monopoly on Hungarian-language programming, today the combined viewership of the three state-owned stations (MTV1, MTV2, and Duna) amounts to approximately 10 percent. Two private stations, TV2 and RTL-Klub, have the capability to reach the entire population. In combination, these private stations attract more than 80 percent of television viewers and advertising revenues. An additional 220 private stations have regional- or, more often, city-specific reach.

Four major newspapers dominate the nontabloid market, Nespszabadsag, Magyar Hirlap, Nepszava, and Magyar Nemzet. The first three of these papers are considered sympathetic to the interests of the MSZP-SZDSZ coalition, while the last of these papers is considered sympathetic to the FIDESZ-MPP. At the midpoint of 2002, the four noted papers had a combined daily print run in excess of 422,000. Nepszabadsag has consistently maintained the largest circulation through the transition and currently numbers approximately 200,000 copies per day. The free paper Metro, a quasi tabloid, has maintained a circulation in excess of 200,000 since shortly after its emergence in 1998. Numerous privately owned weekly economic and political papers supplement the coverage of the daily papers. Increasing numbers of periodicals continue to be introduced on the Hungarian market, notably several conservative publications in the latter half of 2002. In combination, this suggests that while the media market continues to change, it remains one in which private media are financially viable.

Hungary has experienced a proliferation of new radio stations in the post-Communist era. Today, only Hungarian Radio, with three stations – Kossuth, Petofi, and Bartok – remains state owned, and more than 100 private stations transmit within the country. In addition to Hungarian Radio, Slager Radio, Juventus Radio, and Danubius Radio have the capacity to reach the entire country. Radio C has provided a unique addition to the airwaves of Budapest since the fall of 2001. The "C" is for Cigany, the Hungarian word for Roma, and the station orients its programs to reaching this disadvantaged minority. The station has had difficulty attracting advertising money, though, and has been forced to seek other types of financial assistance, particularly from the Open Society Institute.

Internet use in Hungary has expanded rapidly. According to the International Telecommunications Union, nearly 1.5 million Hungarians (approximately 15 percent of the total population) were using the Internet at the end of 2001. This figure is projected to rise to 3 million by the end of 2004. Numerous Internet service providers are accessible throughout the country and available to all citizens by subscription. For many Internet users, local toll charges limit access to work or school. The utilization of the Internet in both private and public sectors, including the development of e-government and the wiring of schools throughout the country, has proceeded at a disappointing pace, leading many commentators to suggest that Hungary is falling behind its neighbors.

Freedom House's 2002 Press Freedom Survey found that Hungary's media remains "Free." The survey identified "economic influences over media content" in Hungary as the most problematic of the three categories studied in the survey. This pressure was exerted by the FIDESZ-MPP government through its selective support of different media outlets, its direction of government advertising, and its awarding of government grants. The new MSZP government has moved to reverse government support to right-wing media, resulting in the somewhat ironic claim by the opposition that freedom of the press is now under assault in Hungary.

The largest organization for journalists in Hungary is the left-leaning National Association of Journalists. The right-leaning Community of Hungarian Journalists is particularly relevant as a counterweight. Numerous other organizations exist in regional and specialized areas. The International Federation of Journalists' 2001 report, Television on the Brink: The Political and Professional Crisis of Public Broadcasting in Hungary, depicts employment circumstances for journalists as particularly problematic. In large measure, this is due to the ongoing transformation within the sector and no doubt is also a result of the significant turnover associated with successive changes of government (and hence control of state media).

The crux of the ongoing conflict over the media in Hungary has been the implementation of the 1996 Law on the Media. The problem has involved representation on the boards of trustees for the state television and radio stations as well as within the noted regulatory agency, the ORTT. The Law on the Media was designed to depoliticize media oversight and control by requiring an equal balance of government and opposition members on the presidiums (four each); instead, it has achieved the opposite effect. Following the 1998 parliamentary election, the opposition comprised two left-wing parties (158 combined parliamentary seats) and one small extremist right-wing party, the MIEP (14 seats). As a result of the unresolved conflict over the proper distribution of the four opposition seats (the MIEP sought representation in excess of its size relative to the other opposition parties), only government representatives were seated at the presidiums. This outcome, which was tacitly approved by the Constitutional Court, resulted in the legitimate perception that state-owned media were subject to control by the FIDESZ-MPP government.

In February of 2002, both the International Federation of Journalists and the International Press Institute openly criticized the political influence of the government on the state's media. Hungarian media analyst Peter Bajomi-Lazar found that "the political bias of Hungarian Television's board has damaged its credibility with viewers." And with respect to the bias at the ORTT, Lazar noted that "the ORTT's use of fines and other sanctions to exert pressure on private, commercial broadcasters has contributed to the development of news programming that, though not blatantly pro-government, is largely apolitical and generally fails to inform the public about current affairs or take a critical look at Hungary's politicians." The dark shadow over editorial independence is clear. The OSCE's 2002 election observation team found, for example, that Hungarian state television "consistently demonstrated a bias in favor of the government and FIDESZ." The team also commented that "newspapers proved to be the neutral source of news about the government and the parties."

As noted, the results of the April elections have caused the former governing parties to dramatically change their feelings about the independence of the media. By August 30, former prime minister Orban was leading tens of thousands of protesters in front of the state television station against MSZP control over public media. Following the April elections, all of the seats on the media overseeing boards were filled. ORTT's approval and subsequent commencement of broadcasting on December 2 of Hir TV, a conservative channel, represented some consolation to the former government. However, the change of parliamentary control has not produced the kinds of desired improvements in the impartiality of state media. As an example, following the spring elections, personnel at the popular TV programs The Week and Press Club were removed, supposedly in response to government pressure. Illegal pressure from the ORTT on editorial decision making at Hungarian Radio has also been alleged. The political conflict over the media in Hungary is certain to continue into the future – and with obvious harmful effects on democracy. Media that cannot be trusted by the public or that are too intimidated to complete investigative reporting or be critical of politicians and parties – particularly the ruling party – are in a compromised position.

Governance (Score: 2.50)

Hungary's governmental system can easily be accepted as stable given the smoothness with which successive governments have been established and dissolved. These changes have occurred despite the significant challenges of the transition and even the weakening and collapse of coalition parties during the terms. Analysts have recognized the stability of Hungary's government as one of the country's greatest strengths during the transition. The basis for this stability is the Constitution's extension of significant powers to the government and the prime minister, including the requirement of a constructive no-confidence vote. This institutional structure follows the German model, though the powers of the Hungarian prime minister are not as great as those of the German chancellor. This was a distinction that former prime minister Orban sought to diminish during his term. Orban's selection of a minister to head the Office of the Prime Minister, his reorganization of the competencies of many of the ministries, and the placement of more responsibilities within the Office of the Prime Minister all represented important steps in his efforts to consolidate authority.

Hungary's 386-member Parliament is quite large for a country of just over 10 million people. What little debate that does exist on changing the size of the Parliament, however, leans more in the direction of creating a second chamber, not in reducing the number of parliamentary seats. The size of the Parliament, however, has not prevented it from acquiring the necessary resources to do its work. The FIDESZ-MPP government's policy of holding plenary sessions only every third week during its term in order to reduce costs was not borne out; instead, the government used this arrangement for its own legislative aims. The MSZP government has returned to weekly parliamentary meetings but also has indicated that biweekly meetings will follow in spring 2003. Investigative committees have not been created or abbreviated because of financial considerations. In short, where Parliament's work has been curtailed, it has been for political rather than fiscal reasons. The influence of the government on the Parliament during the FIDESZ-MPP term was significant. Whether the MSZP government proves to govern differently is an open question, but it seems doubtful that the powers usurped by the Orban government will be returned easily to the Parliament.

The government and Parliament work openly and with reasonable transparency, though improvement is needed, especially in the area of procurement. The media and citizens have access to all legislation under consideration. The work of the National Audit Office is particularly important with respect to overseeing the execution of the budget, while three ombudsmen oversee the areas of civil and political rights, national and ethnic minorities, and data protection and freedom of information. Act No. 46 from 1994 requires the government on a weekly basis to answer questions and interpellations from members of Parliament. The right to call for investigative committees is another means of ensuring openness within the Hungarian government. At the request of 20 percent of its members, Parliament may call for the establishment of investigative committees. However, through parliamentary maneuver the governing party can prevent consideration of a call for the establishment of such a committee.

Significantly, two investigative committees were established in the first months of the new MSZP government's term. The first of these, created at the request of the opposition, investigated Prime Minister Medgyessy's past work as a counterintelligence officer. The second committee, created at the request of the SZDSZ, examined the connections of leading politicians since 1989 with the Communist-era secret services. These politically charged committees ran their course through the summer of 2002 – in parallel with the run-up to the fall local elections and the ongoing debate and protests over the results of the April parliamentary elections. Both committees concluded their work unsatisfactorily. The former finished its work without agreement on a final report. The latter concluded without specifically identifying any politicians involved in past secret service activities, though its report found that such individuals served in each of the three now completed post-Communist governments.

Hungary's subnational governments are divided among 3,131 settlements, 19 counties, and (since 1998) 7 regions, in accordance with EU requirements. Local government responsibilities include elementary and secondary education, health care and basic social benefits, and the enforcement of the rights of national and ethnic minorities. The relationship between local governments and the national government is codified in Chapter 9 of the Constitution. Local governments maintain the right of local taxation, though this represents less than one-third of total local government revenues. Since 1994, voters have elected all mayors directly; nearly all settlements have a representative local council. The National Election Office reported that over 105,000 people sought elective office in the October 2002 local elections, and significantly more than half ran independent of a political party affiliation. These elections, like the three previous cycles, were conducted freely and fairly.

Counties have limited competencies, while regions currently have no real authority. Maintaining financial independence is becoming an increasingly difficult problem for local governments, given the national government's heightened demands to provide services and local governments' decreasing latitude to decide how revenues should be spent. The new MSZP-led government has promised to end the practice of providing subsidies to communities based upon political affiliation, but its comments about the need to correct imbalances that emerged in the previous government's work suggest that national partisan politics will continue to play a pivotal role in local government subsidies. The MSZP's selection of party functionaries to become regional commissioners raises even more concerns about the role of partisanship in local government administration.

Parliament must obtain a two-thirds majority vote to change laws and regulations relating to local government. The decisions of local governments can be reviewed by the county-level public administration offices and overturned as unconstitutional by the Constitutional Court. The effort of the Pest County Council to secede from the Central Hungary Region (one of the seven newly created EU regions) in fall 2002 represents an interesting example of the kind of challenge that local governments will soon face. In short, the move was intended to free the county from being tied to Budapest, thereby lowering the total wealth of the region and making it eligible for greater EU funds. The Pest County Court ruled that the council could not legally hold its desired referendum on secession.

The return of the MSZP to government at the end of May brought with it the termination of scores of employees at the various ministries, government agencies, and boards of directors of state companies. These firings were decried by the outgoing FIDESZ-MPP government but followed a pattern that they themselves had followed upon assuming power in 1998. The firings highlight the need for greater protection for state employees from politically-motivated terminations. The debilitating effects of these firings cannot be ignored in terms of their impact on individuals who would like to complete their careers in the country's bureaucracy, the productivity of government offices, and the confidence that average citizens have in the impartiality of their government officials. That said, Hungary's civil service is certainly competent and professional. Continued improvements in salary levels will alleviate some problems with respect to corruption and retention of good employees. Likewise, the Law on Civil Servants of 2001, and its mandated creation of a class of senior civil servants who will be even better compensated and protected from political dismissal, will also have a positive impact.

Constitutional, Legislative, and Judicial Framework (Score: 1.75)

Despite numerous attempts in the 1990s to create a new Constitution, Hungary has continued to follow its significantly overhauled Communist-era document. The changes to the Constitution completed in 1989 and 1990 have produced a document that provides sufficient stability for governance and has been accepted as the basic rules of the political game in Hungary. The parliamentary democracy created after 1990, complete with separation of powers, is best described according to political scientist Andras Korosenyi as "limited parliamentarism." As a result of the compromises at the transition in 1989, the Parliament was designed as a strong bulwark against the powers of the president and government. Likewise, an unusually strong Constitutional Court was created. The government does possess limited decree powers, but the Parliament with its numerous two-thirds majority vote requirements ensures that a balance is maintained within Hungarian politics. Parliament is the rule-making body of the country.

The Hungarian Constitution guarantees human rights and basic freedoms. In most instances, these are respected within the country, and there are no real concerns regarding business and property rights. Both the Constitutional Court and the country's ombudsmen represent outlets for citizens to seek recourse in cases where they believe their rights have been violated. The EU continues to criticize Hungary for not passing a unified Law Against Discrimination, despite the existence of such laws in different sectors. The EU also has criticized existing discrimination laws for not being backed by "appropriate sanctions." The 2002 annual reports of the ombudsmen documented fewer complaints about minority and civil rights than the previous year. Freedom of religion is established in the Constitution. A September 2002 Constitutional Court ruling found that having different age of consent laws for heterosexual and homosexual relations was unconstitutional.

Concerns about the mistreatment of Roma continue and represent one of Hungary's greatest challenges with respect to ensuring the basic rights of all citizens. The former government's Medium-Term Package of Measures, which was adopted in 1999, was designed to begin to systematically address the numerous challenges that face Roma within Hungary. The new MSZP government has continued with this program but has yet to overcome programmatic inconsistencies and to better coordinate the effort with other government activities. The budgeted amount for Roma interests increased by 9 percent in real terms in 2002 over 2001.

The Hungarian judicial system is built around three levels of courts: local courts, county courts (including the Budapest Municipal Court), and the Supreme Court. The Supreme Court represents the court of last appeal and is responsible for the consistent application of laws in the lower-level courts. In July 2003, a fourth layer of courts will begin operation in Hungary. This level, comprising five regional courts of appeal, was created in response to the November 2001 decision of the Constitutional Court mandating its establishment as set forth under the provisions of the Constitution. The regional layer of courts is designed to reduce the volume of appeals cases placed in the hands of the Supreme Court.

Since 1998, the National Council of Justice has reduced the role of the Ministry of Justice as well as perceptions of political partisanship in the work of the Hungarian justice system as a whole. The council has the authority to nominate Supreme Court and other justices as well as to provide the government with a proposed budget for the courts. Greater efficiency and independence for the courts would be achieved, however, if the council's budget proposal could be submitted directly to the Parliament and ultimately a larger budget outlay provided to the court system.

The Hungarian legal system continues to work with reasonable efficiency and fairness. Public defenders are provided to needy defendants, and generally expeditious trials are the norm. The public prosecutor's office is responsible for authorizing searches and warrants. Issues with respect to the treatment of suspects continue to warrant concern, particularly as they relate to the treatment of Roma. Organizations like Amnesty International have raised concerns about the treatment of foreigners and those seeking asylum in Hungary.

At the end of 2002, parliamentary debate on the necessary amendments to the Constitution to allow for EU accession represented the most significant discussion in some time on changing the Constitution. As constitutional amendments require a two-thirds vote of Parliament, it was necessary to obtain the support of the opposition. The most contentious part of this debate was in defining the relationship between the Hungarian and EU governments on issues of supremacy and sovereignty, with the opposition FIDESZ-MPP arguing strenuously against ceding too much ground. Ultimately, on December 17,2002, Parliament unanimously approved amendments to the Constitution that will allow the country to join the EU in 2004. Accession must be preceded, however, by a binding referendum of the population.

Corruption (Score: 2.75)

The issue of corruption has been an ongoing challenge for successive Hungarian governments. To its credit, Hungary has systematically taken steps to pass and enforce anticorruption legislation in line with international standards. A recent report by the Open Society Institute credits Hungary with having one of the highest numbers of convictions for corruption among post-Communist countries, attributing aggressive prosecutions rather than more numerous opportunities. Hungary has continued to receive criticism, however, from the EU and other organizations on the issue of corruption, particularly with respect to public procurement. The EU Commission's 2002 regular report solemnly concluded that "the overall public perception of efforts to fight corruption has not really improved, and many areas in the public sphere continue to have a bad reputation in this respect." Clearly, the struggle to adequately address the problem in Hungary will take time.

In 2002, Hungary was ranked 33rd of 102 countries on Transparency International's Corruption Perceptions Index. The ranking was based upon a score of 4.9 on a 10-point scale. A score of 10 is considered highly clean, while a score of 0 is considered highly corrupt. The 2002 results place Hungary behind fellow EU applicant states Estonia and Slovenia (ranked 29th and 27th, respectively) and above only one EU member state, Greece (ranked 44th). This result is consistent with Hungary's last two evaluations, in which it ranked 31st with a score of 5.3 (2001) and 32nd with a score of 5.2 (2000).

In a 2000 Gallup poll, Hungarians identified health care, police, and customs and state administration officials (in that order) as the most corrupt. These government officials, who are part of the everyday lives of citizens, represent an important part of the corruption that exists today in Hungary. This level of corruption is then melded with what citizens witness in media reports and hear about taking place at the national level. The combination has a deleterious effect on confidence in both government and democracy in general.

Worth noting here are the prosecution of two individuals and the investigation of two businesses for corruption in 2002. The successful prosecutions of Marta Tocsik and Zoltan Szekely are particularly important. Tocsik received a four-year prison sentence for her role in what became known as the "Tocsik affair" – Hungary's largest privatization scandal. Szekely, a former member of Parliament from the FKGP and chairman of Parliament's Procurement Committee, was sentenced to six years in prison for accepting a bribe of 20 million forint (US$85,000). Happy End and Ezusthajo, two high-profile businesses with close political connections to the outgoing FIDESZ-MPP government, came under close examination after the April elections with respect to their contractual ties and procurement issues related to the former government's National Image Center. The investigations of the two noted companies are particularly instructive as they highlight the perceived gap that existed between the FIDESZ-MPP government's efforts to address corruption and its own actions, which often seemed to disregard open and transparent decision making. The use of the Hungarian Development Bank to circumvent procurement laws for highway construction projects was emblematic of this behavior.

The 1996 Law on Conflict of Interest constrains the participation of government officials in economic life, preventing their participation on boards of directors and supervisory committees in which state ownership exceeds 10 percent. Concomitantly, elected officials, members of the cabinet, and, from late 2001, leading representatives of state bodies and senior civil servants must provide reports of their personal assets. The revised Law on Public Procurement and amended bribery provisions of the penal code both took effect in 2002. These reforms had the combined effect of tightening loopholes and increasing penalties for malfeasance. Performance reviews were also instituted for civil servants in 2002 for purposes of setting wages for the following year. Recent changes in banking laws allowed Hungary to be removed in June 2002 from the Canadian Financial Action Task Force on Money Laundering's list of noncooperative states in the fight against money laundering.

In the latter half of 2002, the MSZP government began to take steps to further combat corruption and its effects on Hungary. The new finance minister, Csaba Laszlo, has called for the tightening of audits in the state sector. He noted, "Anywhere we have public money we should have real transparency and reporting. It's mostly brand new for these institutions, they'll scream at the beginning." In August, the new government's "glass pocket program" to bring greater transparency to public spending was begun, and in November the government convened, for the first time, an Anticorruption Advisory Committee. However, the new government's dismissal of large numbers of individuals at ministries, state agencies, and the boards of state-owned companies raised questions about the commitment of the MSZP to end corruption.

Likewise, cases of waiving public competition for appointments to high-level posts, as with the director of the National Theater, or choosing to solicit bids for lucrative highway construction projects on an invitation-only basis owing to "lack of time for open applications" suggested a familiar pattern of patronage and corruption. Whether the new Socialist government will achieve success in ending the widespread perception of corruption in Hungary remains an open question. The cozy relationship that existed between the FIDESZ-MPP government and friendly businesses took a toll on the Hungarian government in how it was perceived both domestically and internationally. Given the significant recent increases in public servant wages, continued highly publicized corruption prosecutions, and stronger efforts to enforce existing laws, one can be reasonably optimistic that corruption will be reduced in the coming years.

Author

Dan Roberts is a doctoral candidate in political science at Pennsylvania State University. He is a former Fulbright Fellow and a short-term scholar at the Woodrow Wilson International Center for Scholars.