The landslide victory secured by Peter Magyar of
the Fidesz party in the recent Hungarian election just shows a silver lining. The
illiberal democrat Viktor Orban is gone but the perennial problems of running
the financially devastated country remains. For Germany it is still the same
head-ache.
The Hungarian results are heart-warming. Peter Magyar
who was once a party insider with Viktor broke away and formed his Fidesz party
to campaign for the latest round of elections that Viktor ritually holds every
four years. By no mean it is an easy task to unseat the 62 year old Viktor who
has sunk his paws over finance, state machinery and the media. Peter garnered 53.6% of the
ballots cast but in the end was able to secure 69% of the seats
numbering 138. Total strength of the parliament is 199 seats where 106 members
are elected in solo-member constituencies and 93 via proportionate voting. Viktor
braced himself through with 55 seats.
The sixteen years of autocratic rule by Viktor has
made a huge dent not only in the state of money & finance but in the entire
fabric of state bureaucracy. It was a one man show for Viktor who remained a close associate with both
Putin and Trump. He was a thorn in the flesh for EU as a vocal member continuing
to object funding for Ukraine as well as implementing sanctions over Russia.
Germany will continue to have the Hungarian
head-ache even after the change of helmsman. The country is in a financial
mess. Staying outside the Euro-zone, Hungarian currency Forint (Code: Huf) is one of the low-value
monetary unit in the world. At the time of writing one Euro is equal to 363 Huf.
Economic stagnation has battered the country and her citizens who shoulder high
inflation, deficient public sector goods & services along with fewer
investment opportunities. Except
for fuel & gas provided courtesy Russia, Hungary has nothing to boast about
her economic welfare.
Amid cries of “Russians go home – Ruszik Haza in Hungarian”
reverberating in the public squares the reality cannot escape the attention of
Friedrich Merz led German coalition. EU especially Germany has got to come with
grips of the current
malaise in politics, economy extended to geoeconomics prevailing within Hungary
and bring out solutions for short term and long term issues.
A major short term issue is how Germany take care of
unfreezing the frozen funds
earmarked for Hungary totalling € 17 Billion. Even if a via-media is found how to convince other
members of EU to come on board.
By the same token, there is a long term issue of
bringing Hungary into Euro-Zone. As of today seven countries namely, Bulgaria,
Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden are not in the
Euro Zone. Other than Denmark the rest are obligated to join once they meet up
with necessary financial requirements.
Hungarians are a proud nation. They have long term historical
relationship in European theatre. For example Polish–Hungarian ties are more
than 1000 years old. Germany
cannot force Hungarians to swallow the bitter pill of handing over their rights
& privileges to EU Bureaucracy. Hence, Germany is constrained in
using any and every financial leverage it possesses to bend Hungary.
For more than anything else the Hungarian
constitution would remain as the major road-block which Viktor succeeded in placing against Germany led
European Union.
Navigating strategy amid geoeconomics, therefore, requires Germany to come with an innovative solution similar to the opt-out clause granted to Denmark
Cheers!
Muthu Ashraff Rajulu
Strategy Adviser
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Strategy Adviser
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