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Viktor Orban’s East-West Balancing Act

The Hungarian premier is banking – in more ways than one – on strengthening ties with all the great powers.

by Ky Krauthamer 8 May 2019

The White House is starting to resemble a Central European leaders’ zoo. The Czech prime minister’s visit last month was followed by his Slovak counterpart’s trip a few days ago, and Hungarian Prime Minister Viktor Orban is due in Donald Trump’s home next week.


Even though Orban and other Visegrad Four leaders have been beating a path to Trump’s door, the Hungarian premier is showing no more sign of bending to Washington’s will than he ever has.


For instance, soon after U.S. Secretary of State Mike Pompeo made the rounds of Central European capitals earlier this year to set up the White House meetings, Orban announced the relocation of a one-time Soviet bloc development bank to Budapest, setting alarms ringing in both Washington and Brussels, The Washington Post writes.


Hungary’s announcement that the International Investment Bank (IIB) would soon shift headquarters from Moscow to Budapest seemed to take Western diplomats off guard, the Financial Times reported in March.


Lender of Last Resort?


Founded in 1970 but moribund in the post-Soviet era, the bank revived this decade with the support of Russian President Vladimir Putin and opened its first foreign office since the end of the Cold War in Bratislava four years ago. Hungary withdrew from the IIB during Orban’s first mandate at the turn of the 1990s and 2000s, “citing its lack of transparency.” But since coming back on board in 2015 it has become the third-largest shareholder, owning 12.3 percent, behind Bulgaria at 12.8 percent and Russia at 46 percent, Hungarian academic and security analyst Andras Racz writes for the European Council on Foreign Relations.


Hungary appears unfazed by the U.S. State Department warning that Moscow could use the bank “to expand its malign influence in Hungary and across the region,” the FT writes.


Nor do Washington’s concerns appear to bother the bank’s other European shareholders: Romania, the Czech Republic, and Slovakia. Cuba, Mongolia, and Vietnam round out the list of members.


Viktor Orban. Image via the European Union.


Other critics say IIB Chief Executive Nikolai Kosov is tainted because of his parents’ work as high-level KGB spies, although Kosov dismissed this as “black propaganda,” telling the FT, “The bank is completely free from any influence of Russian secret services – or those of the EU and NATO. … As they say in Russia, a son is not responsible for his parents.”

Such worries aside, the IIB lacks the financial clout to compete with such heavyweight lenders as the European Bank for Reconstruction and Development: the IIB manages just 1.3 billion euros ($1.45 billion) in assets compared with the EBRD’s 41.4 billion euros, the FT notes.


Orban diverges from Trump in another crucial area. While the U.S. leader has perhaps the worst relationship with the press of any president since Nixon, Orban and his allies have employed old contacts and state contracts to woo a big swathe of Hungarian media to their side.


V4 the Flood


In December, a handful of big media owners turned over stakes in more than 400 outlets to the Central Europe Press and Media Foundation, a non-profit, pro-government umbrella of mostly local news media. The government signaled its interest in the foundation’s prosperity by exempting it from competition rules.


Orban’s circle then branched out into the far more competitive arena of international news.


The V4 News Agency launched in March with a pledge to “give a conservative, right-wing perspective of the key political, economical, cultural, and other news critical to the EU and the world.”


The London-headquartered agency has strong links to Orban’s government, The Guardian reports. The Central Europe Press and Media Foundation owns more than half of the shares, and, according to Budapest Business Journal, former Orban adviser and spin doctor Arpad Harbony controls 40 percent of the agency through his Danube Business Consulting company.


Another 3 percent of shares belong to Hungary’s ambassador to London, Kristof Szalay-Bobrovniczky, who formally registered the agency in the UK.


Orban’s spokesman Zoltan Kovacs endorsed the agency’s mission, although he said it has “nothing to do with the government.”


V4NA can help counterbalance Western European media “distortion” about Hungary and Central Europe, he added.


“There’s a political agenda that is being nurtured on a daily basis. There’s a narrative which clearly is not talking about the truth and what people can see on the ground. I believe those who have started this initiative believe there’s going to be a need for this unique voice,” The Guardian quotes Kovacs as saying.


It’s still early, but so far the agency’s voice is barely a whisper. Beyond the headlines and short summaries, no articles can be viewed without a subscription.


The “hot” news for 7 May was heavy on transport-related items, highlighting the discovery of a bomb at a Berlin train station and an outbreak of infectious diseases in a Brussels bus station. Another story reported how one of French President Emmanuel Macron’s bodyguards got caught speeding.


The agency claims to have a team of 50 reporters turning out stories in English, French, and Hungarian. It is not clear how much individual subscribers pay; the subscription information on the site is geared to corporate clients, with a basic subscription rate of 450 euros a month, rising to some 1,700 euros for the full package of “exclusive” news, photos, video, and graphics.


Migration stories proliferate, with a distinct anti-migrant slant that aligns with official Hungarian policy: one item cites Foreign Minister Peter Szijjarto’s remark that Trump and the Hungarian government have equally strong stances against migration. “Europe cuts deal to prevent repeat of 2015 migration wave” claims another.


There is some attempt at balance. This week V4NA reports Pope Francis’s call for the humane treatment of migrants and notes a New York Times article that the agency says blames Hungary’s labor shortage on Orban’s anti-migration policies.


Official policies against migration are one thing Orban – along with his Czech, Slovak, and Polish counterparts – share with Washington.


The goal of inviting Central European leaders to the White House “seems more likely aimed at deepening Trump’s club of autocratic leaders and shoring up populist leaders ahead of European [Parliament] elections” later this month, Christopher Maroshegyi of Albright Stonebridge (a Washington consulting house chaired by former Secretary of State Madeleine Albright) told The Washington Post.


Maroshegyi has his doubts about the White House’s effort to engage with Central Europe’s populists, noting Hungary’s close working relationship with Russia and Czech President Milos Zeman’s friendly ties with the Chinese leadership.


Hungary also sees itself as a strong strategic partner of Huawei, despite Washington’s warnings that the Chinese telecoms giant could install spyware in next-generation mobile networks in Europe, while Zeman recently defended the company during his latest trip to Beijing to drum up more Chinese investment.


So barring a significant shift in U.S. policy on China and Russia, the Orban-Trump relationship could well run into turbulence. It will be interesting to see how V4NA covers developments in their marriage of convenience. 

Ky Krauthamer is a senior editor at TOL.

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