Hungary’s budget veto leaves Orban isolated

The parking lot at Siegendorf shopping center in Austria's Burgenland is bustling with Hungarian vehicles. No wonder, as the Hungarian border — and the town of Sopron — are just a few kilometers to the south. "I often come here to do my shopping," a Hungarian man tells me as he returns his shopping cart. He says he works as a police officer in Hungary. Many of his compatriots, meanwhile, live in Hungary but commute into nearby Austria for work.

"We were lucky to become EU members," a Hungarian civil servant, who wants to remain anonymous, tells me. He says he is irked by the fact that "the Hungarian government is pulling the country down." By this, he means "disagreements between Brussels and Budapest," along with the Hungarian and Polish veto against plans to make EU funding conditional on EU members respecting the rule of law. This veto has not only prevented the bloc from agreeing on a new seven-year EU budget, it has also blocked emergency coronavirus funding worth €1.8 billion ($2.2 billion) for member states.

Hungarian Prime Minister Orban had speculated that the other 25 EU member states would cease pressing for a rule of law clause to "get access to emergency coronavirus funds," says Daniel Hegedüs of the German Marshall Fund. "That plan did not work."

It is because the idea of a rule-of-law clause is gaining traction within Dutch and Danish political discourse, the political scientist tells DW. "The Orban government has overlooked the emergence of a kind of rule-of-law coalition among member states and in the European parliament," says Hegedüs.

Orban, usually gifted with political instinct, seems to be out of touch with his own populace over the budget veto. Indeed, a survey commissioned by the European parliament recently found that 77% of Hungarians support linking the transfer of EU funds to rule-of-law principles. No wonder, as corruption is rife in Hungary.

Rampant corruption

Orban's very own family members have made headlines for allegations of graft. According to the European Anti-Fraud Office (OLAF), Prime Minister Orban's son-in-law, Istvan Tiborcz, embezzled €40 million in EU funds. He has not been prosecuted in Hungary. Journalists from Hungary's investigative Direkt36 platform also unveiled corruption linked to the prime minister's father. Viktor Gyözö reportedly used shell companies to benefit from state contracts with EU funding.

These practices are systemic. Apparently, much EU funding vanishes in Hungary without a trace. Transparency International ranks the country as the bloc's second-most corrupt. The Group of States against Corruption (GRECO) similarly deems Hungary's anti-corruption track record "globally unsatisfactory."

Out of touch with Hungarians

For a long time, many Hungarians have deemed graft one of the country's foremost problems. Prime Minister Orban's veto against the EU rule-of-law clause therefore runs counter what most Hungarians want. A telephone survey commissioned by broadcaster Euronews found that only 15% of Hungarians support their leader's veto on this issue.

Most Hungarians think Orban's move could have dire and even immediate financial consequences for the country. After all, the European Commission plans to rapidly pay out emergency coronavirus funds. Poland and Hungary could miss out on a total of €23 billion in this first instalment, according to the distribution quota.

At the Siegendorf shopping center, Balazs Nagy and his wife Henrietta from nearby Hungary tell me EU taxpayers certainly have a right to know what their money is spent on. Even so, Nagy says, economics and politics should be separated. In his opinion, Orban's "veto was politically motivated."

The Hungarian prime minister wants to see financial issues separated from questions of political morality, too. His government insist that Brussels should pay Hungary what it deserves. Nagy agrees: "What Hungary pays in, it gets out."

Biggest net recipient

Figures by the European Statistical Office (Eurostat) tell a different story. Poland and Hungary are, in fact, the bloc's biggest net recipients. Last year, Warsaw received €12 billion in EU funds. Budapest received €5 billion, while contributing merely €1 billion to the EU budget.

Balazs Nagy refuses to accept that his home country is the bloc's second biggest net recipient of EU funds. "The figures are a lie, just like so much else in Brussels." The couple work in an Austrian meat processing plant in Loipersbach, on the Hungarian border.

Hungary to leave the EU?

Currently, the job pays well, says Nagy. The couple, after all, can move freely across the EU border. Even so, Nagy is skeptical of Hungary's EU membership. "Brussels is too liberal," he tells me. "That does not align with the Christian, conservative beliefs that most Hungarians and Poles hold."

Orban, too, has often mulled over the advantages of leaving the bloc. During his latest weekly radio address, he said that Britain — unlike the cumbersome EU — had managed to swiftly approve coronavirus vaccinations.

Pro-EU sentiment

Nevertheless, political scientist Daniel Hegedüs thinks Hungary leaving the EU is "unrealistic." He says most Hungarian exports are absorbed by the EU's internal market and that the country's economy needs EU funds. "Hungarian society and a large portion of Orban's supporters would not back Hungary leaving the EU," Hegedüs adds.

He says despite the government's anti-EU rhetoric, Hungarian society is among the most pro-European in the entire community. Conversely, he thinks, "many in other European capitals would at this stage welcome rather than regret Hungary leaving the bloc."

Viktor Orban is to blame for this, the Hungarian police officer at Siegendorf shopping center tells me. He wants to see his prime minister reach an agreement with the European Commission instead of antagonizing it. He hopes that at some stage people will "stop pointing their fingers at Hungary" and instead perceive "the country as a normal EU member."

Read more: Opinion: With Hungary and Poland, who need enemies?