Hungary's other deficit

By The Economist

The rotating presidency of the European Union is, mercifully, a much-diminished affair, as a result of the Lisbon treaty. Gone are the days when countries chairing EU meetings for six months would try to outdo each other with lavish events, fine cuisine and communiqués praising their pet obsessions. Summits are now more humdrum, held in Brussels and chaired by a permanent president, currently Herman Van Rompuy.

Belgium's just-concluded presidency was exemplary in its understated running of Europe's ministerial business, helped by the absence of a proper government since June. Hungary's turn, which began on January 1st, was never going to be as modest. On the taxiway of Budapest airport, a large banner celebrates the happy occasion. The presidency offers a small, former communist state a chance to promote itself. Viktor Orban, Hungary's pugnacious prime minister, was keen to seize his moment of fame.

Little did Mr Orban know that he would be so roundly jeered when he stepped on to the stage. Forget his European aims, such as reform of the euro, enhanced energy security and a Europe-wide programme for the integration of Romanies; the spotlight now shines on Mr Orban's domestic skulduggery. On December 21st his Fidesz party passed the second part of contentious legislation placing broadcast, print and online media under the supervision of a new authority with power to impose large fines for ill-defined offences such as breaching "human dignity". All the authority's members were nominated by Fidesz, which enjoys a two-thirds parliamentary majority.

Fidesz says it has no wish to curb press freedom, citing its history of resistance to Soviet communism. Yet opposition newspapers have published blank front pages in protest. The Organisation for Security and Co-operation in Europe has expressed alarm. Germany, France and Britain have voiced concern. Luxembourg's foreign minister, Jean Asselborn, says the affair "raises the question whether such a country is worthy of leading the EU". One German newspaper called Hungary a Führerstaat.

Were the furore just about the media laws, Mr Orban might get away with his claim that the provisions are drawn from the laws of other democracies. But his action looks worryingly like the latest in a campaign to weaken independent institutions and centralise power. Pal Schmitt, a Fidesz loyalist, has been appointed Hungary's president. In pursuit of a "patriotic" economic policy, the government has rejected the IMF's prescriptions, raided private pensions, acted to replace the fiscal council overseeing the budget, sought to unseat the governor of the central bank and restricted the powers of the constitutional court. One-off "crisis" taxes have alarmed foreign investors and prompted an inquiry by the EU. Propaganda displayed in public buildings grandly claims that only now has Hungary regained its self-determination, even though the country has been free for two decades.

This is not a return to totalitarianism. But the Hungarian government's power grabs raise a difficult question. Would a country on such a path be allowed to join the EU? Probably not. But in promoting democracy, the EU has less influence on members than on applicants. As one diplomat says: "To join the EU you have to smell of roses. But if you are a member and you start to reek, there is nobody to make you take a bath."

Mr Van Rompuy's olfactory sense certainly failed him when he visited Budapest to celebrate Hungary's presidency on the day the media law was passed. Mr Orban, he said, had made an "excellent impression". The European Commission has wrinkled its nose, asking Hungary for clarifications, but is not keen for a fight after its humiliation in September, when it retreated from a legal battle with France over its expulsion of Romanies.

Eurocrats say they are unlikely to take Hungary to the European Court of Justice, even though the EU's charter of fundamental rights declares that "the freedom and pluralism of the media shall be respected". The commission says this is limited to the actions of EU institutions and of states enacting EU legislation; it does not apply to domestic policies even if, as in Hungary, dubious provisions are attached to laws transposing EU directives.

Socialist MEPs have raised the nuclear option: suspension of Hungary's voting rights for a "serious and persistent breach" of the EU's founding values, which include "freedom, democracy, equality, the rule of law and respect for human rights". For now, no state will take such drastic action. Concerned Eurocrats say redress may be available in the European Court of Human Rights in Strasbourg (established by the Council of Europe, not the EU).

The democratic deficit

The EU's rule book is thus oddly skewed. The euro crisis is leading to a tougher system of monitoring members' economies, with early warnings and sanctions to control fiscal deficits. Yet there is no such machinery to deter democratic deficits. True, democracy cannot be quantified like public borrowing. But the EU may need to find a way to enforce minimum political standards, especially if extremists are boosted by the economic crisis and the EU's demands for ever-greater austerity.

Peer pressure is the best response. A political boycott of the sort briefly applied to Austrian ministers when Jörg Haider's far-right Freedom Party joined the government in 2000 is inappropriate, for the time being. Instead, European leaders need to be blunter. In public and in private, at ministerial meetings and chandelier-lit receptions, Mr Orban must be told to change his ways. Angela Merkel's office has said that, as president, "Hungary naturally has a special responsibility for the image of the European Union as a whole." In the limelight for the next six months, Mr Orban is more vulnerable. The presidency may yet turn out to be his curse, and Hungarian democracy's blessing.