How the Hungarian government nationalized criticism

For the past seven years, the Fidesz regime in Hungary has built, bit by bit, an effective media-control system. That allows them to attack anybody. Central European University was first.

  1. «I know that the power, size and weight of Hungary is much smaller than that of the financial speculator, George Soros, who is now attacking Hungary», Viktor Orban, the Hungarian premier told the European Parliament on 26 April 2017.

The intervention was yet another part of the Soros-the-evil narrative that dominated the government’s discourse during the CEU saga, a concerted attack that the Hungarian government launched in late March 2017 against Budapest-based Central European University (CEU). Back then, the Hungarian parliament adopted in a matter of days a law that is likely to force CEU to fold its operation in Hungary. Mr Soros is CEU’s founder.

Critics of the law, mostly the Hungarian, liberal-minded intelligentsia and legions of foreign universities, NGOs, liberal politicians and thinkers, slammed the move as a political maneuver hatched by Mr Orban and his conservative Hungarian Civic Alliance (Fidesz) party, now in power. Thousands of Hungarians took the streets in protest.

But nothing has persuaded the Hungarian government to cede any ground in its battle with CEU. On the contrary, authorities seem poised to go for broke. According to the law, CEU will not be able to issue diplomas for newly enrolled students as of October 2017.

For many local observers, the attack on CEU is a political issue. The incumbent government is already in electoral mode: the values and people CEU is associated with are the perfect “enemy” that the government needs in its campaign for the next national elections primed for April 2018.

Yet, unleashing an attack of that scope and, unprecedentedly, against a university, can only happen in a dissent-controlled environment conducive to impunity. Building that environment was the project the Hungarian government has been steadily working on since it came to power seven or so years ago.

That is democratic Hungary’s biggest problem.


A Party State

The first thing that Fidesz did following the electoral victory in 2010 was to adopt new media legislation. At the time, Mr Orban said that the measures were intended as a corrective for the leftist bias in the country’s media.

The changes in law were clearly aimed at bullyragging vocal journalists. For example, the new law required media content to be “balanced” and not to incite hatred “against any majority,” vague legal provisions that can open the gates to government’s interference. For violations of these provisions, steep fines were introduced. A new authority, Media Council, composed of people appointed by parliament where Fidesz had a two-third majority, was created to enforce the new rules.

The 2010 law set a new regulatory framework for the media, laying the basis for a sheaf of measures aimed at shackling criticism that were yet to come.

First came public media. The Hungarian public broadcaster, whose history harks back to the communist times, has never been a paragon of independent journalism and quality programming. But after 2010, it became a mere government agency. All public media, including the country’s news agency, were brought under the roof of a newly established organization, MTVA, led by the head of the Media Council, according to provisions in the same 2010 law.

Criticism abounded. European Parliament and the Organization for Security and Cooperation in Europe (OSCE), an intergovernmental institution, cried foul. Under pressure, the Hungarian parliament subsequently amended parts of the legislation. But its grip on the media regulator and the public media remained firm.

The reforms of the state media were accompanied by a massive staff purge: senior executives in MTVA, mostly those critical of Fidesz, were thrown out. “There were always pockets of professionalism, islands of freedom,” said Attila Mong, then an anchor with the Hungarian state radio who was also given the ax. “There is no island. One party controls the system now.”

Back then he didn’t know that that was just the beginning.


Market Lego

The following six years saw a cavalcade of attacks, direct or indirect, aimed at private media, some of whom were still brave enough to report independently. Knowing that commercial media were financially vulnerable after the economic crisis hit their revenues, the government embarked on a plan to “reshape” the market to their benefits, explained Attila Batorfy, a Hungarian journalist who’s a fellow with the Center for Media, Data and Society (CMDS), CEU’s flagship media research hub.

A big showdown was the clash with RTL Klub, a TV channel run by the German media conglomerate Bertelsmann. In 2014, the government introduced the advertising tax act, a law overtly targeted at the station. According to the law, RTL Group alone fell into the largest tax bracket. A 40% cut on their advertising revenues was imposed, clouting the company’s bottom line. The net profit of the RTL group tumbled from €535m in the first three quarters of 2013 to €306m in the same period the following year, according to Financial Times.

Private media were given a strong signal: the government was serious about its critics. RTL Klub tempered, if not reined in, its criticism.

Attacks continued unabated. A law in 2014 raised barriers to journalists’ access to public interest information. The media authority played a significant role in the “market reshaping” operation. Arbitrary licensing decisions favored government-allied radio channels. For five years, the merger of Swiss owned Ringier and Germany’s Axel Springer, two major publishing houses, was blocked by the same authority. Some of their assets ended up in the hands of Mediaworks, a company with murky ownership linked with a dubious Austrian businessman.

Personal attacks against critical journalists became rife. Zoltan Speder, owner of Index, the biggest independent news portal by audience, was constantly traduced in articles published by government-supportive media. The stories were allegedly placed by the premier’s cabinet office under the management of Antal Rogan.

An investigation by the largest opposition newspaper, Nepszabadsag, into the lavish lifestyle of Mr Rogan didn’t eventually get published as the newspaper folded unexpectedly on 8 October 2016. Its owners, Mediaworks, argued that poor economic results prompted them to scrap the title. But less than three weeks later, the brand was purchased by Opimus, a company under the influence of businessman Lorinc Meszaros, a close ally of Mr Orban, according to reports from Reuters.

On top of all that, government funding in the media has grown massively in recent years. In 2016, the government spent 80% more on advertising, becoming the single largest advertiser in the country. With the subsidy from the state budget earmarked for the public media (close to €280m), the government now dwarfs all advertisers and media outlets in Hungary. Atlatszo, an investigative journalism outlet funded by private donors and citizen donations, operated last year with a frugal budget of €300,000.

Today, a few independent media outlets are still standing. They include Atlatszo, the news server 444 and the investigative non-profit organization Direkt36. At the other end of the spectrum, an opposition media empire is growing in parallel with the government media. It is led by Lajos Simicska, a wealthy businessman who was in cahoots with Mr Orban until 2014 when the two had a bitter argument over a new advertising tax that Mr Simicska feared it would hurt his own media.

A former roommate of Mr Orban during the university years, Mr Simicska is invested in construction, energy and media. He used to be Fidesz’s financial mastermind. His companies received year after year fat public orders and state ad contracts. But as of 2014, his largest construction company, Kozgep, was barred from participating in public tenders. Between 2010 and 2014, nearly two-thirds of state ad spend was channeled to Mr Simicska’s media companies. After 2014, some 70% of that went to the government-allied media.

The latest media acquisition by forces close to Mr Simicska was the news portal Index, now in the hands of a foundation managed by people close to him, including family. The investment by Mr Simicska in media is also election-related. He apparently doesn’t have political ambitions, but being hell-bent on sweeping Mr Orban from power in 2018, he is shopping around for political allies who could carry out that task.



Politics First

It might seem far-fetched to say that Fidesz’s media strategy over the course of the past seven years has been implemented according to a detailed plan agreed on at the onset of the party’s rule. It is implausible to imagine Mr Orban and his party planning four years in advance to attack a TV station with a law purposely designed to clobber the station’s finances. Most of the government’s actions were reactive. An unflattering story here, a spurt of criticism there: the government responded.

However, taken together, all the moves of the government in the media are pieces of a strategy, relentlessly and systematically implemented, to secure control of criticism in the media. Mr Orban and his Fidesz chums repeatedly said a decade ago that their previous loss in elections was much to blame on “liberal” media.

Only in such an environment can a government get away with almost everything it does, including the attack on CEU. Hungarian authorities could have attacked the university many years ago, but they waited until most of the major dissent channels were taken over or, worse, garroted. The timing for the attack on CEU is also strategic for political reasons. A fight was needed to boost Fidesz’s electoral capital. Unfortunately, they chose a university to provide just that.

And it doesn’t stop there. On 13 June 2017, the Hungarian government adopted a law imposing drastic restrictions on NGOs funded by foreign entities, another move aimed at hobbling dissent.

To sacrifice academic freedom for political gains is a supreme act of cynicism, but Mr Orban is determined to go to great lengths to win the next elections because the stakes are huge. A raft of investigations over the past year by local media outlets unveiled illegal deals, involving public money, between the government and some of Mr Orban’s allies: both family and friends.

If Fidesz loses power, the party’s fat cats will be out on a limb. Some of them might face slammer time. That is business (or politics, for that matter) as usual, especially in this part of the world.

But on a longer term, what really matters for a healthy Hungarian society is media freedom. Without it, anybody can be CEU next.


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