Finance

Viktor Orban scents opportunity in Hungary’s LGBT+ row with Brussels

With elections less than a year away, Viktor Orban is not about to let €1bn come between him and his reputation as a strongman facing down the EU to defend the interests of his country.

Hungary expected to receive the sum this year as the first tranche of €7.2bn in EU pandemic funding, but Brussels has yet to sign off on the package. The EU cites corruption concerns for the hold-up. But the Hungarian prime minister has seized on his government’s continuing stand-off with Brussels over a controversial Budapest anti-LGBT+ law, presenting this as the cause of the delay and himself as the champion of Hungarian values.

The stance could allow him quietly to bow to Brussels’ anti-corruption demands and access the funding while seeming to have done so while standing up to the bloc, say analysts.

“When the pressure on our country is this strong, only the people’s shared will can protect us,” Orban said in a video posted on Facebook last week, vowing to stand firm, pledging a referendum on the issue and accusing Brussels of “an abuse of power”.

Government ministers rallied round the strategy. Justice minister Judit Varga insisted Budapest would not yield on ideological issues. In an interview with the Financial Times last week, she said the dispute amounted to a “war of worlds” between liberals and conservatives in the EU, suggesting other countries and millions of voters probably sided with Hungary but were not free to say so.

The dispute with Brussels over the LGBT+ bill — which bans depicting or promoting LGBT+ content in Hungary’s schools and the media and has provoked a furore among EU lawmakers and officials — has given Orban a political opportunity, say observers.

Next spring’s elections are expected to be the most closely fought since Orban and his rightwing Fidesz party took power in 2010, after six opposition parties agreed to unite behind one candidate for the first time, bringing the grouping level with the ruling party in the polls.

A person familiar with the prime minister’s thinking, who asked not to be named, said the more pressure Brussels piled on Budapest, the more Orban could galvanise his voter base and pose as a defender of Hungarian interests.

The prime minister had no political “master plan” when he tabled the bill, but once he saw the uproar it caused in Brussels he sensed its potential, the person said. “This war was not planned. But if you want to have a battle, this is a good one. It is more than winnable.”

Orban was likely to hold his ground on the LGBT+ law while compromising on the corruption concerns, said Capucine May, Europe analyst at risk intelligence company Verisk Maplecroft.

“To backtrack on the recent LGBT law would undermine Fidesz’s credibility with their constituent base ahead of the 2022 elections,” she said. The EU “has never taken any action in response to social backsliding”, she added. “[The delay] is due to [Hungary’s] inadequate corruption safeguards rather than its social reforms. Orban will probably compromise to meet the EU’s anti-corruption requirements.”

Viktor Orban is likely to hold his ground on the LGBT+ law while compromising on the EU’s corruption concerns, say analysts © John Thys/Pool via Reuters

The government says it can fund its recovery programmes even without the first tranche of EU money. “It is not especially difficult,” Orban’s chief of staff, Gergely Gulyas, told a press briefing earlier this month. “The Hungarian economy is viewed much more favourably than before, so we can raise these funds on the international financial markets a lot easier.”

Varga said Hungary was confident it would eventually receive the €1bn funding tranche, which comprises 13 per cent of the country’s requested recovery funding this year, in accordance with EU rules, but that the programmes it was intended to fund would be launched regardless.

“We calculate 6.3 per cent growth this year, which gives us ample confidence that this won’t be an unbearable burden,” she said, citing official government data.

The finance ministry declined to comment. It is unclear whether a bond issue or loan would be necessary to cover the shortfall.

Katalin Cseh, a Hungarian liberal member of the European parliament, said Orban had used the LGBT+ dispute to obscure the issue of systemic corruption around the disbursement of EU funds. “Clearly this homophobic law has whipped up a mighty political storm,” she told the FT. “But to blame the shortcomings of the [recovery plan] on the backlash over the homophobic law is denying the extremely serious corruption problems that exist.”

On Saturday thousands of Hungarians joined the annual Pride march in Budapest in support of LGBT+ people and to protest against the law.

The EU outlined its concerns over anti-corruption safeguards in a wide-ranging EU report last week. “This doesn’t mean we don’t disapprove of the LGBTI law . . . but this is not the pillar of the discussion,” EU economics commissioner Paolo Gentiloni told a press briefing. “The pillars of the discussion are the [country-specific recommendations on corruption].”

Varga insisted the bill was the main issue. Brussels negotiators “issue specific demands”, she said. “Our recovery fund negotiating partners feel the ideological pressure from the LGBTQ lobby . . . We have received documents from them in which they state this in plain terms.”

She added: “An ideological element has appeared in the talks . . . Great forces work to overpower the government.”

However, observers warned that, in using tensions with the EU for domestic political advantage, Budapest had burnt bridges with its international partners.

Peter Kreko, director of Hungarian think-tank Political Capital, said the Hungarian prime minister was likely to win this political game and potentially next year’s elections, but added: “The fact he has had to burn most of his diplomatic support to get there indicates this is a precarious situation for Orban.”

Cseh, the European parliament member, said: “Orban expects the EU to dole out the cash and is unwilling to compromise at all to the detriment of Hungary as a whole.”

Additional reporting by Sam Fleming in Brussels

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