Istvan Stumpf: "The last nail in the republic's coffin"

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Hirschler Richárd

The government is headed for a slow and painful death - and the only hope is that the government will refrain from using the national development plan to buy the votes it needs to survive, says Istvan Stumpf. Only government with broad support can hope to lift the country out of its crisis, says the former chancery minister.


István Stumpf
hvg.hu: How do you see the cabinet reshuffle?

István Stumpf:
It's about hiding the extent of the coalition crisis, maintaining the appearance of government and keeping everything under the Socialist Party's control. The prime minister's most important goal was to shore up his support within the party and to find compromises that would satisfy the most important party factions. Governmental concerns are secondary. Ferenc Gyurcsany is clearly anchoring himself within the party, trying to silence dissenters and people who want change, and making sure that the Socialist Party continues to support his government.

Laszlo Puch's role in the government best illustrates the deals that have been made within the party. The PM wants to take control of the party purse. In exchange he offers others operative influence over government decisions on energy and infrastructure. At the same time, Ferenc Baja also became part of the deal: he has been given full control over information technology investments, since he was handed that part of the Economics Ministry's portfolio. So there's even more concentration of power, and people loyal to the PM have been promoted, while the real problems facing public administration have only been addressed in the most superficial way.

At the same time I think it's a good thing that Istvan Gyenesei has been put in charge of local authorities. He's been involved with them before, he's served in local councils. But doubling the number of state secretaries just increases the chaos in public administration and will breed political tensions. Ujhelyi's resignation from his state secretary post shows that the new generation is not happy with the PM's circle's rise to power - which shows you how fragile this bargain is.

hvg.hu: It's also relevant that as an independent MP, Gyenesei won't vote against himself.

István Stumpf:
His appointment is clearly about buying his vote, because a member of the government can't vote against himself. Ferenc Gyurcsany needs every single vote. Restructuring the ministries, creating the post of chief secretary and increasing the number of state secretary posts within the PM's office is clearly about making more people dependent on the government, and not about rationalising public administration.

The new ministers are trying to get a frozen public administration moving again, while taking the individual portfolios apart and reassembling. We're in the middle of the summer and next year's budget is being prepared. And the individual portfolios don't know what kind of budget is being prepared.

The reshuffle just adds to the chaos in public administration. There are no laws before parliament. Regional administration is suffering from the uncertainty, because the Constitutional Court has overturned the laws that govern them, meaning that a new, legal structure has to be put together by the end of July. Public officials can feel that they are just bit-parts in an improvised political drama. They have no way of knowing what's coming next. Meanwhile, the PM changes his mind every day. Right now, he is worried that the opposition will table a vote of no confidence so he wants to stick to the old programme with new emphases.

hvg.hu: It's curious that they've created a separate transport ministry to go alongside the economics ministry.

István Stumpf: We still don't know which ministry will be responsible for which policy area. Clearly Gordon Bajnai will focus on strategic economic development issues, while motorway-building, energy policy and other infrastructure investment decisions will be left to the former post office chief, who has lots of practical experience. I suspect this had to be done so Ferenc Gyurcsany wouldn't feel the knife was being sharpened behind his back. The Brutuses, it seems, have been bought out or at least silenced for the time being. But we should have no illusions - the reshuffle was a series of moves designed to consolidate the Socialist Party. Its effect on government has yet to be determined, and it's hardly popular within the party itself. Ujhelyi's protest is a sign of this dissatisfaction.

Second page of the interview (Oldaltörés)

hvg.hu: But you have to admit that no matter what geniuses serve in government, it can't make any big moves. It has to stick to the EU's convergence programme and the stability pact that it imposes.

István Stumpf:
The fundamental aim isn't fiscal convergence but real convergence - the social and economic differences between regions and countries and within countries should be as small as possible. That's the aim of the EU's structural funds. But if fiscal balance leads to growing social tension, then the country becomes unsustainable in the long run. The government is very proud of having cut the budget deficit they created. But in every other area - be it economic growth, unemployment, inflation or job creation - the numbers are very bad - even though these are the areas that most directly affect people.

I think the EU funds that we can obtain would have created far more freedom of manoeuvre for the country. But it was impossible to create a social consensus for the national development plan - it just became another tool for political bribery. I only hope that this minority government will not resort to using the national development plan to buy votes, giving one MP's constituency a Ft5bn bypass in exchange for his vote on the next law, while giving another constituency a water-treatment plant, and maybe a main square rehabilitation project to a third MP. It could really waste funds which could help the whole country catch up. But I suspect that's what will happen.

The restructuring of the government also supports this aim. Before it wasn't a coincidence even before when Ferenc Gyurcsany devised a structure which placed him directly in charge of the state secretaries who had immense spending power by virtue of being in charge of development policy. Now Gyurcsany is implementing this on a ministerial level. The party treasurer now has his own people in the state apparatus, which means the Socialist Party can begin its financial preparatiosn for the elections. The current minority government is just deepening the crisis - it's the sign of a long-drawn-out death.

hvg.hu: So this demise could take another two years?

István Stumpf: It could carry on, because nothing has changed in terms of parliamentary debate. The political elite is carrying on just as it when it stopped a month ago. The economy's problems aren't being dealt with, and nothing's being done about public administration. Gyurcsany himself has said that tax and pensions reform can only be discussed seriously in 2018. So they're contradicting themselves, while most of the analysts don't know what the government wants to do. We've seen plenty of governing programmes - the government has loads of ideas - reorganising the government, offering up a 48-point programme, a transparency package, and then it just forgets them. And then comes a completely new programme, which also ends up in the rubbish pile. I don't know how this could change.

Third page of the interview (Oldaltörés)

hvg.hu: People expect more from the opposition in such a tense situation. It should be offering alternatives - and proposals to cut VAT on food don't really fit the bill. Waiting for the Socialists to fall apart is a strategy, of course, but one that could damage the country as well.

István Stumpf: The opposition has become rather broad. The Free Democrats will soon tell us what they mean by constructive opposition. If you're asking what the Fidesz-Christian Democrat opposition should do in the current situation - especially since the opposition and the Civic parties will probably win the next elections - I've been saying for a while that we have to prepare for government systematically. We have to speed up the policy-making process, we have to come up with programmes - not just the guideline programme we've already drawn up, but we have to have a plan for foreign and ecconomic policy. I believe Jarai and his team are working on tax policy, Matolcsy and his colleagues on economic policy. The Hungarian Chamber of Commerce also has a reform workshop which is coming up with valuable material.

This doesn't mean the opposition has to take on the government's responsibility and come up with a programme in place of Gyurcsany's absent one. The government parties are asking the opposition to say what needs to be done - that would amount to taking the reins of government. But there's no doubt that Fidesz can only hold on to its current high levels of popularity if it talks to voters, updates its old manifestos, builds on its local authority experience and starts a new dialogue with business and social groups and makes its intentions known.

We need a framework agreement along the lines of the Moncloa pact which enjoys broad social and economic support. Whatever Fidesz's majority after the elections, it can only govern with a high degree of consent. It has to reach agreement with foreign company owners, domestic entrepreneurs, employees and civil society. There has to be a new consensus within politics as well, because the government will otherwise be ungovernable - this is the only way to restore people's trust in politics.

hvg.hu: Any economist you talk to stresses that society has further sacrifices to make if the country is to climb out of the ditch. Gyurcsany offers soft reforms that won't require much in the way of cuts, but Fidesz is doing the same, saying taxes must be cut, which will create jobs and lead citizens to move into the legitimate economy - thus generating more tax revenues, and then everything will be fine. Too good to be true?

István Stumpf:
I think things are more serious - it's not just an economic problem. I think the Third Hungarian Republic is creaking at the seams. It's possible that what the government is doing for its own people is just hammering the final nail into the republic's coffin. I think that after the elections we have to start work on building a new republic based on our experiences over the past 18 years. We have to create a constitutional, spiritual, economic and political structure for the Fourth Hungarian Republic, and to do this we need to focus on building a functioning state, creating dynamic economic growth and reform public spending. We need to distribute taxes in a more normal fashion, cutting taxes on entrepreneurs while increasing competitiveness and employment. I disagree with Peter Tolgyessy and others on this, who way that the current problems are not rooted in the constitutional order. I think they are. Look at the local authorities or the 'partocracy', or the restrictions imposed on civil society. It's unacceptable for the government to violate 29 or 30 tenets of the constitution, and it's unacceptable for such violations to be the norm. It's not just the symptoms that need addressing.

hvg.hu: Fidesz is preparing for victory. But who'll be prime minister?

István Stumpf:
I don't know. There aer lots of possibilities apart from Viktor Orban, from Zsigmond Jarai to Tibor Navracsics and Lajos Kosa. In any case, I don't think a two thirds victory for Fidesz would be appalling, since I think the fear is that some kind of authoritarian, retrograde government will emerge, and that Viktor Orban will take his seat in the Sandor Palace, cutting off heads and decimating the troops. I think we could develop a political structure that adheres to Hungarian traditions, with a slightly more powerful role for the president and a strong executive authority,. In some sense government could be isolated from current ideological conflicts. There are no institutional forums for strategic planning at the moment, and strategic thinking is not properly embedded in our thinking. The future of the country is not measured in parliamentary terms. We can only dig the country out of its whole if we have a broad social consensus and a clear political mandate.