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An Uninspired Choice

Washington – and Hungary – would have been better served if Obama had selected a different kind of ambassador.

by Martin Ehl 18 February 2014

Incoming U.S. Ambassador to Hungary Colleen Bell will evidently have a ringside seat for a historic event: Hungary is on the threshold of a great era of prosperity, Prime Minister Viktor Orban announced 16 February, in his regular state of the nation address.

 

The question is whether Bell will be capable of appreciating the historic meaning of this new epoch, which parliamentary elections will kick off on 6 April, when Orban’s conservative-populist Fidesz party will (again) win. 

 

In the great American tradition, Bell, a successful producer of Hollywood soap operas, “bought” her nomination for the post through campaign contributions for President Barack Obama. At a recent hearing in Congress, Republican Senator John McCain humiliated Bell several times by repeatedly asking about the strategic interests of the United States in Hungary, which she was not able to answer other than by blathering some catchphrases. And he again called attention to the nomination during a recent, brief visit by a congressional delegation to Budapest.

 

Let us have no illusions that Hungary or any other Central European country – with the possible exception of Poland – plays some important role in U.S. strategic interests. But however we choose to take stock of the past four years of Orban’s government, we can say the situation in Budapest is far from the normal development of a liberal democracy. 

 

Yes, the economy is in the midst of a recovery, but foreign investors are under harsh regulatory pressure; the opposition and independent media are fighting for every scrap of public space. The occasional flashes of racism and anti-Semitism also don't help matters. That last point is now a particularly sensitive subject because of the current dispute between the government and Jewish organizations about the form of the official remembrances of the 70th anniversary of the Holocaust.

 

If Bell wants to understand, even a little, the country to which she bought a government ticket, she will have to study a bit its complicated history, which is the basis of Hungarians' frustration today, and Hungarians’ relationship with minorities. 

 

But that's not the only thing she will have to do. The ambassador will have to refresh her knowledge of monetary policy, because the Hungarian National Bank is dancing on very thin ice.

 

On the one hand, the forint is under pressure from the overall decline in emerging markets; on the other hand, the central bank is trying to revive the economy by reducing basic interest rates, which could add up to a one-two inflationary punch and make its short-term bonds less attractive to investors. Just today the bank pushed down the two-week deposit rate by 15 basis points, to 2.7 percent. The bank has been gradually cutting the rate since August.

 

When it comes to financial questions, Bell should use her Hollywood skills and contacts and get in touch with the analysts of Franklin Templeton, an investment company headquartered in San Mateo, California (near San Francisco). Franklin Templeton's funds hold a combined 11 percent of Hungarian government bonds. The company's behavior, as the largest single creditor of the Hungarian government, has considerable influence on economic developments – at a minimum because other creditors often follow Templeton's lead.

 

It is, of course, Washington's decision, but the United States risks, through sending Bell to Hungary, a further loss of its reputation at a time when Hungarian society needs at least symbolic support from precisely someone who is a strong voice of freedom, stability, and democracy.

 

After changes Fidesz has made to the Hungarian legal system and the economy, the April elections will most likely cement the current situation in Hungarian politics for longer than one election term.

 

If the Americans are sending as their emissary someone like Bell, that is the last clear signal for those in Central Europe who had still nursed a hope that the region could build a relationship with Washington.

 

The opposition’s deficiencies are also on display through its decision to nominate a group of uninspiring candidates, together on the same list, against the clearly dominant Orban: the successful, but lackluster economic reformer Gordon Bajnai; the seasoned and but discredited former Prime Minister Ferenc Gyurcsany; and the inexperienced, young, party baron-controlled Attila Mesterhazy.

 

There is also a danger that Hungarian opposition leaders –who listen mainly to Brussels and who have been mechanically repeating the same arguments without any critical self-reflection about their own role – will take this opportunity to go cry on the shoulders of the new ambassador. And she’ll only know enough to listen uncritically and offer empty words of support. 

Martin Ehl
 is the foreign editor of the Czech daily Hospodarske noviny, where this column originally appeared. He tweets at @MartinCZV4EU.
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