Hungary’s isolation and economic hardship will make Orban’s fourth term his toughest yet

Hungarian Prime Minister Viktor Orban gestures to his supporters after the announcement of the partial results of the parliamentary elections in Budapest, Hungary April 3, 2022. REUTERS/Bernadett Szabo

BUDAPEST, April 3 (Reuters) – Prime Minister Viktor Orban faces unprecedented headwinds as he begins a fourth consecutive term as the Hungarian nationalist must navigate his so-called ‘illiberal state’ through a downturn economy and growing isolation over Ukraine.

Orban’s fourth landslide victory on Sunday against a united opposition, which allied against him for the first time, solidified support for the 58-year-old leader at a time when he is losing allies abroad.

The invasion of Hungary’s eastern neighbor by Russian President Vladimir Putin on February 24 upended Orban’s decade-long efforts to deepen trade and political relations with Moscow and give his campaign a new direction.

Since then, Orban’s ambivalent stance on European Union sanctions and his failure to condemn Putin have estranged him from Polish and Czech allies, but his messages of peace seem to have resonated with many Hungarians in times of crisis. conflict.

Sunday’s victory over a united opposition, which won 57 seats in parliament to Fidesz’s 135 based on preliminary results, gave Orban another landslide majority that allowed him to rewrite the constitution and key laws.

“We have won a victory so big it can be seen even from the moon, but certainly from Brussels,” said Orban, who has built his career portraying himself as a combative leader fighting against EU bureaucrats. to jubilant supporters after Sunday’s election victory. .

Orban said his stance on the war in Ukraine was aimed at preserving Hungary’s military and economic security, but that is increasingly being questioned by longtime allies in Warsaw, who have been instrumental in the support for Orban’s battles with Brussels.

Complicating Orban’s challenge is the central European country that depends on Moscow for most of its oil, gas and nuclear power, even after some improvement in cross-border energy links with neighboring countries over the past year. the last decade.

“The decision to stake the country’s energy future (both fossil and nuclear) on close ties with Russia backfires,” UniCredit economists said in a note. “Hungary could find itself even more isolated within the EU.”

Poland’s ruling party leader Jaroslaw Kaczynski said last week he was unhappy with Orban’s cautious stance on Russia, while a meeting of defense ministers of the Visegrad Four alliance in Budapest was canceled this week after the withdrawal of Czech and Polish ministers.

WIND AGAINST ECONOMIC

Orban’s new term also poses tough challenges domestically, with the central bank predicting the slowest pace of economic growth in any election year since Orban came to power in 2010.

With inflation on track to reach its highest level in at least 15 years, the economy slowing amid the war and EU funds in limbo due to a row over democratic standards, Orban n there will be no honeymoon period after his electoral victory. Read more

Since coming to power in 2010, Orban has stabilized the economy with a host of unorthodox measures and unemployment has fallen to record lows due to billions of euros in foreign investment lured by low corporate taxes. companies in Hungary.

But high government borrowing to pull the economy out of the pandemic has eroded much of the improvement in central Europe’s biggest debt and underlying indicators show the rise in living standards has been lower than that of Poland or Romania.

The EU has suspended payments to Poland and Hungary from its pandemic recovery funds over democratic shortcomings, which economists say could start to put pressure on Budapest and Warsaw from the second half of the year. , unless there is a compromise.

A 1.8 trillion forint ($5.45 billion) pre-election spending spree, soaring energy costs and the impending expiration of price caps to keep inflation under control will also complicate Orban’s efforts to keep the economy stable after the vote.

“The pandemic was a walk in the park compared to what’s to come,” said political analyst Zoltan Novak of the Center for Fair Political Analysis think tank.

“All indicators of economic growth and stability are drifting in the wrong direction,” he said.

($1 = 330.29 forints)

Reporting by Gergely Szakacs Editing by Raissa Kasolowsky and Diane Craft

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