Hungary and Slovenia: Two populisms
By Joachim Becker and Ana Podvrsic
May 25, 2022 — Links International Journal of Socialist Renewal reposted from NLR Sidecar — Two governing parties of the nationalist right faced parliamentary elections in April 2022: Victor Orbán’s Fidesz and Janez Janša’s Slovenian Democratic Party (SDS). But the results could hardly have been more different. Fidesz won 54% of the votes, five percentage points more than in 2018, while Hungary’s main opposition alliance – consisting of several liberal parties plus the right-wing Jobbik – garnered only 35%. By contrast, in neighbouring Slovenia, the SDS received a meagre 24% and was voted out of office, while the liberal Freedom Movement (GS) – a newly established outfit led by the former energy mogul Robert Golob – gained the largest vote share, with 35%. International media outlets lamented Orbán’s victory and celebrated Janša’s defeat, the latter supposedly proving that right-populism could yet be beaten by a reconsolidated political centre.
In mainstream commentary, the SDS is often seen as a younger sibling of Fidesz. Both aim to build a right-wing party-state by gaining control over the press, education system and judiciary. Both use public money to develop vast clientelist networks. Yet, in spite of these common features, the SDS’s socio-economic policies have been closer to those of the liberal centre than to Fidesz’s nationalist programme. Moreover, the trajectories of Hungarian and Slovenian development since the early 1990s have diverged, with far-reaching implications for each country’s political landscape. The prospects for an incoming GS government can therefore be profitably assessed by differentiating the Slovenian experience from that of its eastern neighbour. How do the two compare?
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A major selling-point for Fidesz, in multiple election campaigns over the last decade, has been its rejection of the unfettered embrace of foreign capital that had hitherto been pursued by the Hungarian ruling classes. By the mid-2000s, the coalition government led by the Hungarian Socialist Party (MSZP) was thoroughly discredited. The then Prime Minister Ferenc Gyurcsány admitted that he had persistently lied about the country’s economic situation and abandoned the social pledges on which he was elected. From 2006 his administration ramped up its austerity measures and sent its popularity ratings into freefall – trends that were further compounded by the global financial crisis. This allowed Fidesz to launch an effective electoral challenge in 2010, promising to fix the economic situation and replace the ideology of ‘international liberalism’ which it argued had constrained Hungary’s national potential. The party received 53% of the vote, giving it a two-thirds parliamentary majority that allowed it to redraft the constitution and entrench itself within the state apparatus.
In the wake of the 2008 crisis, Fidesz saw an opportunity to enhance the role of domestic capital. During its first period in government (1998-2002), the party had not challenged the primacy of foreign investment; yet throughout the 2000s, this imbalance generated increasing dissatisfaction among the homegrown capitalist class. At the same time, Gyurcsány’s austerity reforms, first drafted in 2006 and then radicalized with the IMF programme of 2008, immiserated large swathes of the working population. Sections of the middle class incurred massive foreign exchange debts. As the forint depreciated, they found themselves in a serious predicament, which foreign lenders did nothing to resolve.
Once in power, Fidesz set out to improve conditions for the middle class, which in turn became its primary electoral base. With its heterodox monetary policies and partial confrontation with overseas banks, the party brought relief to Hungary’s embattled debtors. Under Orbán, the national bank pursued proactive monetary policies that favoured the growth of domestic small and medium enterprises, while the government used public tenders, licensing arrangements, taxation and credit policies to favour domestic capitalists in areas such as banking, media, retail trade and utilities. These measures were crucial to building what the Hungarian sociologist Erzsébet Szalai calls a ‘client bourgeoisie’, loyal to the ruling party.
Of course, Fidesz’s break with neoliberalism was far from total. In export manufacturing, the Hungarian economy continued to rely on foreign capital, providing multinationals with financial incentives and reduced corporate tax rates. Orbán combined generous family benefits for the middle classes with harsh neoliberal workfare schemes. He used public works projects to forge clientelist links with the poorest sections of the population, while simultaneously passing reforms that targeted labour rights and union organizing.
The overall result of Fidesz’s programme was a macroeconomic situation characterized by greater stability than during the first two decades of capitalist transformation. The party successfully decreased the country’s external financial dependency and the vulnerability that flows from it. This was the record on which it ran in 2022, putting ‘bread and butter’ issues like a 20% minimum wage rise, price controls and monthly pensions at the core of its election campaign. The liberal opposition was deeply uncomfortable with such topics. Its economic policies were a throwback to the 1990s and early 2000s – reviving free-market dogmas which had long been delegitimized. It consistently attacked the government’s authoritarianism but neglected the most basic social issues, and thereby failed to reach voters beyond its traditional base.
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Slovenia’s course in recent decades makes for a stark contrast. In the early 1990s, after the collapse of the USSR, the country’s ruling classes defended policies of selective economic nationalism. They tried to protect the hegemony of domestic capital in banking while opening the economy to foreign capital in export manufacturing. Trade unions were strong and combative enough to influence policymaking through tripartite institutions. This was a model that began to break down once Slovenia entered the EU in 2004 and Eurozone in 2007, before unravelling completely with the financial crash.
Under pressure from financial markets and the constraints of Eurozone membership, successive Slovenian governments – led by both the liberal parties and the SDS – adopted the European agenda wholesale, rolling out austerity, liberalization and privatization. When the SDS, which had led a coalition from 2004 to 2008 just before the financial crisis, returned to power in 2012, it did not question the accelerating denationalization of the economy. Its coalition even drafted the initial plans to sell off indebted banks and state enterprises, which were later implemented with some minor changes by the liberals. Pressure from the EU played an important role in this realignment. In 2013, the European Commission and European Central Bank directly intervened in the restructuring of the Slovenian banking sector, applying the same bitter medicine it had dispensed to other countries under Troika rule (Greece, Portugal, Ireland, Spain, and Cyprus). As a result, the government was obliged to recapitalize banks at a much higher price than initially calculated, and began to privatize them under the Commission’s supervision. This regressive macroeconomic restructuring severed the close links between the banking sector and domestic capital, while empowering its foreign counterpart. Fidesz’s economic-nationalist agenda was thus entirely foreign to the SDS.
In both countries, the bloc of liberal parties that spearheaded integration into the EU and Eurozone all but collapsed after the outbreak of the global financial crisis. Between 2009 and 2013, Slovenia witnessed mass demonstrations against the corruption of the political establishment, as well as rising labour militancy that rejected the suffocating structures of the traditional trade unions. But unlike in Hungary, this created a power vacuum that was filled by two distinct forces. On the one hand, the period of intense social struggles enabled the formation of a left party (initially called the United Left), which became a strident opponent of the neoliberal settlement and ultimately won nine seats in parliament. On the other hand, there was a proliferation of hastily established, highly personalized parties trading off the expertise of their leaders: the Alliance of Alenka Bratušek, the Party of Miro Cerar, the List of Marjan Šarec, and so on.
These new formations rapidly gained voters’ confidence and lost it just as quickly. Having cobbled together a rickety coalition government in 2013, they continued implementing neoliberal policies with an anti-democratic bent: the constitutionalization of fiscal limits set by the EU, plus the restriction of public referenda on issues related to the budget, international treaties or national security. As their popularity dipped, these technocratic parties made several abortive attempts to shore up a coalition. Their governments were highly unstable. Meanwhile the SDS stood by, ready to capitalize on their inevitable collapse. In contrast to the new parties – which promised to transcend the left-right division – the SDS stressed its hardline anti-communist stance and blamed the problems of the Slovenian economy on the ‘deep state’. It also harnessed social media to mobilize its base, inciting constant hysteria about Soros and refugees among a vocal section of the population.
The last SDS government, which returned to power in 2020, was the first since 2008 that stayed in office until the official end of its term. But whereas Fidesz could consolidate its ruling position, the SDS had been unable to develop an equivalent to Orbán’s client bourgeoisie. At the start of the Covid-19 pandemic, the party managed to form a coalition when two smaller outfits agreed to join it – changing sides in a desperate attempt to prevent early elections in which they would have lost their seats. Yet, having benefited from these parliamentary contingencies, Janša failed to translate them into a lasting majority. Instead, his anti-Covid strategy was botched and haphazard. Charting a chaotic path between public health measures and economic stimulus, he alienated both trade unions and business organizations. Small pay rises, announced ahead of the elections, were insufficient to buy back public confidence. The SDS subsequently tried to borrow from Fidesz’s repressive playbook, using the pandemic as a pretext to extend its influence over the media, police and civil society. Yet in a country with a relatively solid anti-fascist tradition and a politicized layer of liberal civil society actors, that influence could only go so far. When the election campaign got underway in 2022, the opposition set the agenda: highlighting the authoritarian, xenophobic and nationalist aspects of SDS rule. Golob presented himself as a liberal-green, managerial alternative to the hard-right Janša, and was duly rewarded at the ballot box.
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Golob’s platform is neoliberalism with an ostensible social consciousness. It foregrounds the climate crisis, problems in the health sector and precaritized jobs. Yet his proposed solutions are uninspiring, consisting mostly of tax cuts, market-friendly green policies and a greater role for private capital in the pension system. In Slovenia, GS is sometimes seen as the heir to the Liberal Democratic Party (LDS) – the dominant centrist force during the transition period, which ruled from 1992 to 2004. LDS managed to accommodate the interests of both export capital and organized labour while forming broad coalitions with other parties. Its export-oriented policy was supported by fine-tuned regulations and a close nexus between state-owned banks and domestic capital. Yet, with EU accession, the institutional basis for this setup was eroded. Eighteen years later, the circumstances have changed significantly. There is no longer a strong domestic capitalist class nor robust trade unions; monetary policy is straitjacketed by the EU; and the extent to which GS can revive its predecessor’s programme remains uncertain.
What is clear is that the last elections significantly narrowed, if not temporarily closed, the possibilities for an alternative to the neoliberal project. In 2014, the United Left entered parliament with almost 6% of the vote. Four years later, that share rose to more than 9%. In the recent national ballot, however, the newly renamed Left barely exceeded the parliamentary threshold of 4%. Since the apex of its popularity, the party has increasingly focused on parliamentary manoeuvring, which has taken precedence over grassroots organizing and local branch activities. Its MPs have dissociated themselves from their initial campaign programme and edged closer to the liberal opposition, ultimately joining a formal anti-SDS alliance known as the Constitutional Arch Coalition. As a consequence, the Left has transformed into an outpost of the urban, educated middle classes: picking up votes from disenchanted former supporters of the liberal parties, while shedding the support of left-wing activists and social movements. Instead of advancing alternatives to SDS policies, it has often defaulted to a mechanical defence of the welfare state.
In sum, since the 2000s Slovenia moved from a selective nationalism with socially attenuating neo-corporatist features to the unbridled dominance of foreign capital. Hungary, meanwhile, opened itself to foreign capital during the transition period, then switched to the selective introduction of national-conservative reforms after the financial crisis. Fidesz’s partial break with neoliberalism has allowed it to cement its political position, while neoliberal continuity in Slovenia accounts for the relative unpopularity of the SDS. If either country is to move beyond its current polarization – between right-wing nationalism and liberal constitutionalism – a revitalized parliamentary left will be required.
Currently, though, socialist and environmentalist forces in the Hungarian opposition bloc are marginal. This is partly because the legislature as a whole has become even more politically heterogeneous since the April elections. The far-right Mi Hazánk (Our Homeland Movement) made it into parliament, which means that the liberal opposition (plus Jobbik) must share the opposition benches with a party that is in many ways ideologically close to Fidesz. This enlarges the government’s political options while putting the opposition under even more pressure to act in a unified manner, so as to avoid sidelining themselves under the present electoral system. That presents an extremely difficult situation for progressive forces, which will struggle to distinguish themselves from the rest of the Hungarian opposition. In Slovenia, by contrast, the Left has already acquired a distinct national profile, yet it has also diluted its platform through coalition-building with the liberals. As of 24 May, the party signed the coalition agreement for a GS-led government: winning real, but limited policy pledges in areas like health, wages and housing, but otherwise acceding to Golob’s neoliberal-oriented programme. Such concessions are only likely to exacerbate the Left’s detachment from its former working-class constituents, who will need a radically different political vehicle to challenge the status quo.