Why Brexit is terrible news for Hungary’s Viktor Orbán

Writing in Saturday’s printed edition of the Népszava daily, journalist and author Paul Lendvai suggested that Brexit “strengthened Viktor Orbán’s position, almost as much as the recent soccer victories” during the UEFA European Championship. While Mr. Orbán may benefit on the surface, and in the very short-term, I would argue that Brexit will pose a very serious challenge to his regime.

The populist Orbán regime is not based on any coherent ideology. It cannot be described as conservative, nor is it based on free market principles. It is “Christian Democrat” only in name and, of course, it is not social democratic in any way. Mr. Orbán’s regime is based purely on its ability to satisfy the worldly needs of a very large nomenklatura that has been built around it. Its survival is based on instilling loyalty through fear–threats of loss of employment, making life difficult for politically wayward businesses through punitive action or character assassination–and once loyalty is achieved, it is rewarded by gifts and a stable existence.

The regime’s ability to continue to buy the loyalty of its collaborators hinges almost entirely on massive EU transfers to Hungary. With Britain’s impending departure from the European Union, these transfers will almost certainly decrease.

Péter Szijjártó, Hungary’s Minister of Foreign Affairs and International Trade, was quite candid in admitting that Hungary’s already anaemic growth (0.8%), may now only reach 0.3% or 0.4%, as a direct result of Brexit. But Mr. Szijjártó may be overly optimistic, as Morgan Stanley has suggested that Hungary may actually fall into recession next year, following the vote, as the EU’s GDP as a whole, decreases by 0.7%.

Mr. Szijjártó, speaking with Népszava’s journalists, also conceded that Great Britain’s departure will also have a very negative impact on the EU budget, considering that the country covers 8% of the total expenses. Hungary receives some 25 billion euros in support from the EU, which Erste Bank estimates comprises 5.6% of Hungary’s GDP. In fact, Hungary is more dependent on EU transfers than any other country in East/Central Europe, including relatively underdeveloped states, like Bulgaria.

The Hungarian forint was impacted by the crisis right away, although it regained some of its losses by the end of the day on Friday, closing at 316 forints against the euro.

Beyond the looming economic impact on Hungary, Mr. Orbán has reason to be concerned that by losing an important eurosceptic ally, which also opposed ideas of EU federalism, Germany’s already impressive influence in the EU will increase even further. As our readers will know, Mr. Orbán has had a very prickly relationship with Chancellor Angela Merkel.

Outgoing Prime Minister David Cameron with Viktor Orbán earlier this year.

Outgoing Prime Minister David Cameron with Viktor Orbán earlier this year.

It is not surprising that Mr. Orbán ran English-language ads in Britain’s major daily newspapers, calling upon Britons to vote to remain in the EU. As the crude saying goes: money talks, and Hungary–so vulnerable to any potential drop in EU funding–will be getting less of it. And since much of these funds end up being used in tenders that are granted to companies and people closely intertwined with the ruling Fidesz party, the nomenklatura may become restless.

Meanwhile, several opposition parties in Hungary called on the prime minister to suspend his anti-EU and anti-migrant referendum, scheduled for October, in light of the crisis caused by Brexit. Gábor Fodor’s Hungarian Liberal Party called for Mr. Orbán to cancel his referendum, as did Ferenc Gyurcsány’s Democratic Coalition. The referendum, which has no legally binding power at all, is widely seen as little more than a populist, anti-immigration and anti-EU PR stunt, to focus attention on anything, but corruption, and crumbling health care and public education back home.

The Hungarian Socialist Party remarked that the Hungarian referendum was “the first station in Hungary’s departure from the EU.” Both the Politics Can Be Different green party (LMP) and Dialogue for Hungary (PM) called on Mr. Orbán to put the focus on the fate of an estimated 350,000 Hungarians living and working in Britain, and to begin negotiations with the British government, on their status and protection in the UK.


  1. I don’t take it as a question of how Brexit will affect Hungary, I rather take it as a question of how the inevitable disintegration and dissolution of the whole EU will affect Hungary. I see no problem with it just a favorable outcome for Hungary supposing the Orban government has the brain, the plan, and the Intel to take quick steps in the right direction and how quick they will be to find friends and allies (not for himself, for Hungary).

    Good things will happen but they have to ride the wave which at this time will be a bit harder than he is used to. But he likes playing hard ball, doesn’t he! 🙂 Good things will happen and I hope and wish Hungary could take her part and find her share in a happier world. Good luck guys.

  2. @richard

    Astounding optimism, to put it mildly. It goes farther than the agitprop script.
    How can there be “just a favorable outcome” when Hungary stands to loose EU funds, many expat jobs, some trade volume with the UK and perhaps suffer from a general slowdown in Europe?
    (Never mind the price as long as the Beloved Leader is praised right?)

    Until now the Orban government did not have “the brain, the plan, and the Intel to take quick steps in the right direction”, nor any steps for that matter, and Hungary kept sliding lower and lower in the ranking table. Why think they will have it now?

    “How quick they will be to find friends and allies”, Orban/they did – Nazarbayev, Aliev, and of course Putin. Perhaps rather for Orban himself than for Hungary. Do your ilk like to see Hungary turn into a poor version of Azerbaijan (no oil and gas here)?

    • Well, not necessarily the Orban government, they gotta go as they will have no other choice should they fail, or the whole government will decompose from within. That government is a collection of gangsters, (admittedly did some of the dirty jobs well that suits for them well, though) and if a new government is coming I just don’t want other gangsters to take their place.

      The whole situation and the whole political and economic arena will change and there is always a chance. I cross fingers for Hungary not for the present government. He can find alliances if he wants when the deck of cards get reshuffled. The interests of many government will change and where have you ever seen loyalty in politics?

      If not Orban than someone else will do it, life goes on. Partially optimism on my side partially wishful thinking.

      But I think that after a hard period, the dissolution of the EU will bring changes that can be explored and utilized by many of the European countries and I think of dramatic changes that can turn the wind for better. Hungary, whatever government will lead the way will have a chance to share the benefits of the future changes. A chance. Don’t underestimate.

    • @richard

      We know that this “government is a collection of gangsters”, we know that the disintegration of the EU, or any major changes for that matter, would bring new situations and eventual opportunities. We can cross fingers, hope and wish, but these don’t lead in any way to “Good things will happen”.
      Nothing substantiates such optimism, particularly in view of the dismal record of the Orban rule, and of the significant support (i.e. shared ideas) it had.

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  4. Avatar Miklos Banfi says:

    I am with you Observer. If I hadn’t known Richard’s views already I would have considered his sentences here as dark sarcasm:) I bacame even more pessimistic after Brexit than before not only regarding Hungary, but on a much wider scope. I think it is a devastating historical turn, opening up Pandora’s box for lots of political instability.

  5. Avatar Dr. Habil. András Fodor says:

    Sorry again, but I disagree the final conclusion of the article. So do I with the comments.
    But the author is right in some of his statements.
    First, he is right that Hungary really has lost an euro-skeptic ally, and it is also true, that economically the EU (and Hungary) is the looser of the BREXIT, and probably the UK is the winner, at least in longer time.
    But I doubt that that the BREXIT would have made the position of Germany and Mrs. Angela Merkel stronger in the EU.

    It is just the opposite which can be expected. The BREXIT means a catastrophic failure of the conception of Federal Europe, especially the migration policy of the idealist Merkel.
    Merkel used to fail as scientist (quantum chemist) and she has been close to the failure as politician, because of the simple reason that she has completely been untalented. She is a nice person, intelligent, but completely anti-talented.
    The positions of Mr. Junckers and Comrade Schultz (of fifth elementary school class “diploma” have become even even weaker. These two figures of are personally responsible for all the reasons why the Britons decided to leave: the stupid burocracy of the non-elected but appointed “leaders” in Brussels and the self-destroying migrant policy leading to islamisation of Europe and increased terror risk.
    If the EU did not make a complete change in this catastrophic migrant policy, if the EU did not change the incompetent structure, the domino effect of the BREXIT would be unavoidable.
    Let us hope that the rationality will be stronger in the EU policy and instead of the forcing of “federalism” the confederation will be the future in Europe.
    This was the conception of the founders: Mrs. Adenauer, Schumann and De Gaspari. This was the conception of De Gaulle and Kohl..
    Despite of the tremendous mistakes made by Mr. Orbán – which should naturally be criticized, – he is also committed to this conception.
    So does the writer of these lines.
    As for Paul Lendvai, the previous Russian KGB agent: he has been an unforgiving enemy not only the present Hungari government, but the Hungary and the Hungarian people. Therefore his opinion has no credit and no value.
    Many tanks for your kind attention.

  6. Hungary will manage fine. People seem to forget that Hungary had reasonably good growth before it joined the EU. With the UK also gone it gives much more say to Eastern and Central Europe. That is what people aren’t looking at. The western half of the EU just lost 1/3rd of the economy and 65 million people, a nuclear and military power.

    Germany and France both had very good relations with the UK. The myth is that with the UK gone Germany and France can now build a stronger union. Actually the UK was a proponent of EU expansion and it’s departure will have a huge impact on the EU budget and it’s ability to pressure EU members and potential recruits to bend it’s way. The UK’s exit also creates alternative market in Europe. There is now the EU, Russia led block, and independent countries with associative agreements with the EU (which the UK will undoubtedly become).

    The power of Western half of the EU is no substantially reduced, and that means more eastern values and views creeping into the EU institutions.

  7. Observer, Banfi,

    I understand your views and pessimism but please don’t forget my first sentence how I started all my comments.

    “I don’t take it as a question of how Brexit will affect Hungary, I rather take it as a question of how the inevitable disintegration and dissolution of the whole EU will affect Hungary.”

    That’s my point. Brexit is just the beginning of a progress that would have begun without the U.K. anyhow in different way. And the power elite that created the EU always have plan B and C. They knew it would happen, the gold reserve of the UK was moved to Switzerland weeks before, they are desperate and will fight till their last drop of blood.

    The EU is in its present form is over and was over and has been a sinking ship for years. That’s why the U.K. quitted and not the opposite.

  8. Avatar Miklos Banfi says:

    Rich, with this second comment I pretty much agree, what I did not agree with is any kind of optimism for anybody including Hungary, EU and England itself. I can see only losers here and just can’t see anything good coming out of it. Disintegration, instability on economic, political, sociological sense which will lead to wars…

    • I thought the disintegration of the EU and consequently the disintegration of NATO could be a step forward to avoid WWIII, (of course there are other triggers, too) bat what I mentioned above, the plan B and C could be either establishing an “independent” EU armed forces to replace NATO or letting the EU be dissolved and create a new one, the old trick repainting the nameplate and carry on with the same tyrannic organization even more mercilessly pushing the weaker countries into dismay.

      Or what else can happen? Letting the EU survive, transforming it Eurabia, letting Hungary and Slovakia etc. out of the game and placing them under Atlantic control and surveillance and making them a buffer zone between Eurabia, the united EU armed forces and the possible new Pravoslav empire the East are eager to bring into existence.

      So, what I agree with you, although I painted a pink picture, that Hungary has every chance to be a loser. Meanwhile, as counterforces are also acting on the scene I think it could give Hungary a second chance.

      Yet, I won’t protest if you call me a daylight dreamer, it’s only that I see the power elite has a fantastic and ultimate program for war, genocide, destruction but like every program, it has or must have a flaw. That’s my last hope.

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