Daily Israel Report

A Goulash of an EU Presidency?

Hungary assumes the EU presidency at a troubled time for the union as well as Hungary's relationship with Brussels.
By Amiel Ungar
First Publish: 12/28/2010, 7:51 AM / Last Update: 12/28/2010, 11:38 PM

European Union

 

Hungary assumes the rotating presidency of the European Union on January 1, replacing Belgium. The Hungarian presidency comes at a critical time for a EU that is sorely pressed by the economic crisis in the bloc and in the European currency.

As Hungary has not adopted the euro, this may already create a problem in terms of economic oversight. Hungary will have its hands full with major players in the currency bloc such as Germany and France, who will claim that as bonafide members of the currency they should exert greater influence. Additionally, Hungary will have to cope with other issues where her position diverges from the European consensus.

One area where Hungary can claim an advantage over Belgium is that it has a government with a solid parliamentary majority as opposed to Belgium  which failed to form a government during its entireEU  presidency . However, here the advantages end.

Press Freedom

The most recent problem to surface in Budapest's relations with the EU was the adoption of a new media law that effectively puts the ruling Fidesz Party in control of state television channels and all other public media outlets. Another law creates a media counsel with authority to regulate print and electronic journalism as well as the Internet.

The Council can impose stiff fines for "unbalanced" coverage or reporting that offends "human dignity". Not surprisingly, the members of the new Council will be associates of Prime Minister Viktor Orban. The Hungarian Prime Minister's approach to the media has been compared within the EU and outside it to the emasculation of the Russian media under Vladimir Putin. The Washington Post has urged that Secretary of State Hillary Clinton boycott the European Union summit meeting in Budapest scheduled for May unless Orban rescinds the law. Neelie Kroes, a vice president of the European commission, has already asked the Hungarian justice minister, Tibor Navracsicsto, to forward the text of the law to her to see that it complies with the pertinent European law on press freedom.

Economic Controversy

Hungary's stewardship over the EU may increase economic controversy. In July, Hungary broke off talks with the International Monetary Fund over the issue of loan repayments although it promised to repay by 2012. It thereby broke agreements with the IMF that were made by its previous Socialist government. As the ratings companies do not sympathize with governments that abrogate economic agreements, Hungary's credit rating is a tad above junk bonds. Given the continued financial instability of EU members, the European Union needs the IMF in case its financial resources become overly strained. To say that the Hungarian presidency is unhelpful in fostering good relations may be an understatement.

As a former communist country admitted into the European Union during the 1990s, Hungary, like other former East Bloc members, counted on generous European assistance to bridge the huge economic gap that had developed between Western and Eastern Europe. The European Union had, after all, extended such assistance to Spain, Portugal and Greece when they made the transition from authoritarian rule to democracy. The Hungarians claim that only by equalizing conditions within the European Union can the bloc achieve greater competitiveness. The richer countries of the European Union are not in a generous mode, however. Having been forced to declare an austerity policy at home, resulting in unemployment and decreased benefits they have no sympathy for Eastern European appeals for continued and even larger assistance.

A final economic issue is Hungary's fight with the European Central Bank over appointments to the council that sets interest rates in Hungary. Again the ruling party reserves the right to designate political appointees.

The Shadow of Russia

As a former communist state, Hungary retains deep suspicions about Russia. It wants to make energy policy a priority of its presidency and shift energy relations from East-West to North-South. East-West relations are shorthand for energy dependence upon Russia and not shifting the sourcing of energy to other areas. Given the close energy ties between Russia and such EU stalwarts as Germany and Italy, this attempt may engender controversy.

Another area that may cause trouble within the European Union was a joint motion by Lithuania, Latvia, Bulgaria, the Czech Republic, Hungary and Romania seeking to equate Communist repression with Nazi war crimes. This would criminalize the denial or minimization of communist crimes and approximate the penalty for such behavior to that of Holocaust denial. The EU commission has rejected this motion, figuring correctly that it will envenom relations with Russia and could be used as an internal tool to repress Eastern European parties that were the successors to what were formerly called  Communist parties.