HUNGARY HUNGARY. Germany. Poland. Czech Rep. Slovakia. Austria. Italy. Slovenia Croatia. Yugoslavia. Bosnia NATIONS IN TRANSIT SCORES

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1 196 GEORGIA HUNGARY Germany Danube Italy Adriatic Sea Prague Czech Rep. Vienna Austria Ljubljana Pecs Zagreb Slovenia Croatia Warsaw Poland Slovakia Bratislava Miskolc Budapest Gyor Debrecen Danube HUNGARY Bosnia Szeged Romania Yugoslavia Belgrade Danube Polity: Parliamentary democracy Economy: Mixed capitalist Population: 10,000,000 GNI per capita at PPP $ (2000): 11,990 Capital: Budapest Ethnic Groups: Hungarian (90 percent), Roma (4 percent), German (3 percent), other (3 percent) Size of private sector as % of GDP (mid-2001): 80 The scores and ratings for this country reflect the consensus of Freedom House, its academic advisors, and the author of this report. The opinions expressed in this report are those of the author. ââ and áá indicate score changes of.25 or more. â and á indicate changes of less than.25. NATIONS IN TRANSIT SCORES Democratization Rule of Law Economic Liberalization ââ 1.75 â na.na 2.13 ââ â 1.67 â 1.75 â 1.92 â 2.00 KEY ANNUAL INDICATORS GDP per capita ($) Real GDP growth (% change) Inflation rate Exports ($ millions) Imports ($ millions) Foreign Direct Investment ($ millions) Unemployment rate Life Expectancy (years) , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

2 HUNGARY 197 INTRODUCTION Since October 1989, Hungary has been a constitutional democracy in which independent courts guarantee the rule of law. The Constitutional Court, in particular, has extensively practiced its right to overturn any legislation or government act that it deems unconstitutional. In general, the constitutional framework provides for human rights and for the protection of minorities. However, in certain areas either specific human rights legislation is lacking or existing provisions violate basic civil liberties. A general antidiscrimination law is entirely absent from the legal system. Hungary s economic system is overwhelmingly capitalist. Over the last decade, the government has sold the vast majority of state-owned assets to private investors, and it has adopted fundamental laws that guarantee one s freedom to engage in economic activity. Property rights are also generally respected. The state has removed most price regulations and limited its monopolies to a small number of strategically important fields. Outside the public sector, market factors largely determine prices and wages. During the period covered by this report, Hungary did not experience any major changes in its constitutional regulations. Yet a tendency observed in previous years, namely the shift in balance between the executive and the legislative branches of government, grew more marked. On several occasions, for example, the government used its parliamentary majority to weaken legislative oversight in general and investigations of alleged corruption cases that involve its representatives in particular. The constitutional framework and specific laws generally provide for freedom of the press. However, the passage in 2001 of legislation that was intended to provide a more balanced representation of opinions in each and every media forum drew the ire of many commentators, who viewed the new law as an imposition on editorial freedom. Governmental control of the state-owned section of the electronic media has also received substantial criticism at home and abroad. Broadly speaking, Hungary s constitutional regime is stable. It is clearly not threatened by open attempts at its overthrow but, rather, by the declining role of some formal democratic institutions. This is due, in part, to lack of effective enforcement, or neglect, of existing laws. This declining role has gained strength over a long period of time, as subsequent administrations have failed to strictly observe limits on their power or have sought to maximize their prerogatives. Since 1998, the ruling coalition, which is led by the Federation of Young Democrats Hungarian Civic Party (FIDESZ-HCP), has demonstrated a desire to weaken constitutional controls over the executive. The single largest social problem in Hungary continues to be the plight of the Roma (or Gypsy) minority, whose members experience police brutality and discrimination in employment and education. In 2001, some well-publicized cases of conflict between the Roma minority and members of the non-roma majority came to the fore. Most notably, France offered refugee status to a number of Roma families that had unsuccessfully brought a suit against Hungary in the European Court of Human Rights. The suit was rejected on formal rather than substantive grounds, with the ECHR claiming that the claimants did not exhaust all local remedies. Nevertheless, French authorities found their claims well grounded. In addition, the adoption in 2001 of the so-called status law, which grants certain economic and legal privileges to ethnic Hungarians living outside Hungary, generated some controversy domestically and considerable controversy abroad, most notably with neighboring Romania. Today, more than a decade after the fall of communism, Hungary s institutional framework for constitutional democracy and a market economy is largely intact. At the same time, the everyday performance of some of the country s core democratic institutions falls short of what an established democratic polity requires. This is largely the result of a long tradition of insufficient law enforcement that is partly attributable to the legacy of the former Communist regime. In many instances, however, certain political players in the post-communist regime have deliberately furthered the trend. Even more worrisome is the fact that the general public perceives these institutions, particularly the legislature, as having little day-to-day relevance to the actual conduct of public affairs in Hungary. DEMOCRATIZATION Political Process Institutionally, the Hungarian political system has not undergone any significant modification since the country substantially reshaped its Constitution in October 1989 and adopted a new electoral law in the same period. Under the Constitution, Hungary is a parliamentary democracy in which popular sovereignty resides in the Orszaggyules (Parliament) and principal executive authority rests with the prime minister, who leads the government. The powers of the president of the republic are largely ceremonial. Hungary s electoral law establishes a mixed electoral system that combines territorial electoral districts, based on a two-tier first-past-the-post system, with a vote on national party lists. Representatives who are elected in districts fill a little less than half of the seats in Parliament. The remaining seats are filled through party lists according to a proportional principle. The aim of the system is to guarantee representation in the legislature to a viable majority of like-minded political parties while still retaining a sufficient level of proportionality. Despite its apparent complexity, this system has served its dual objective well, with the

3 198 HUNGARY majoritarian component of the system being slightly stronger than the proportional. All three parliamentary elections since 1989 have resulted in a peaceful change of power, and the composition of each new government has reflected the electoral will, as represented by the popular vote. A significant indicator of stability is the fact that no post-transition government has been forced to resign prematurely. That is, every government has completed its full term. Likewise, the proportionality of the electoral system is indicated by the fact that in all three post-transition elections, several minor parties have gained a mandate in Parliament. On the other hand, the overall number of parties represented in Parliament has remained remarkably stable throughout the post-communist period. In all three legislative elections, six parties have entered Parliament. This is largely due to a 5 percent national threshold for legislative representation. By contrast, observers anticipate that the 2002 legislative elections will bring about a significant realignment of the political landscape and that fewer parties will win representation in Parliament. They view this possibility as part of a longer process in which Hungarian political parties have been coalescing around one of two major ideological blocs. Specifically, a center-right bloc has emerged largely out of the parties that make up the current governing coalition, in which the FIDESZ-HCP is the senior partner. The junior partners in the coalition, most notably the Hungarian Democratic Forum (MDF), have retained their organizational independence but appear to have lost much of their capacity for independent political initiative. At the same time, a center-left bloc has formed around the post-communist Hungarian Socialist Party (MSZP). The liberal Alliance of Free Democrats (SZDSZ) is its junior partner. The far-right Hungarian Justice and Life Party (MIEP), while maintaining opposing views on several key issues like EU membership, gives its ideological and practical support to the Fidesz-MPP-led coalition on ideologically charged issues that divide the coalition and the other two opposition parties. In terms of partisan politics, the single most important event of the period covered by this report was the all but complete disintegration of the Independent Smallholders Party (FKGP), a junior partner in the ruling coalition that commanded nearly 15 percent of the popular vote in Owing to a series of corruption cases, nearly half of the party s representatives in Parliament defected in It now stands little chance of passing the 5 percent hurdle in the 2002 legislative elections. Also notable in 2001 was the conclusion of an agreement between FIDESZ-HCP and Lungo Drom, a Roma organization, on cooperation in the 2002 parliamentary election campaign. Under the agreement, Roma candidates would receive three seats on FIDESZ-HCP s national list and seven seats on its regional lists. Florian Farkas, the head of Lungo Drom, described the alliance as historic and noted that it had been established in the interest of the prosperity of the nation in which Hungary s [Roma] obtain economic, social, legal and political interest representation. At the same time, Lorant Kertesz, the chairman of the Democratic Roma Party, was critical of the alliance, fearing that it would divide Hungary s Roma community and therefore weaken its ability to pursue its agenda. Although the Fidesz-Lungo Drom agreement is an important gesture for its creation of Roma representation in Parliament, it should be noted that Florian Farkas lacks credibility among many Roma organizations and intellectuals, in part because his organization is often perceived as avoiding conflict with government authorities on important Roma issues. The ideological cleavage between the two main blocs is considerable. Each side views the other as inherently hostile to political plurality and to the democratic polity as a whole. Some fear that the intensity of the conflict between the two political blocs is not conducive to the effectiveness and stability of the country s political system. Yet there is at least notional agreement between the two sides on such strategic issues as Hungary s Western orientation and the desirability of joining the European Union. Domestic and international election-monitoring organizations such as the Organization for Security and Cooperation in Europe have judged all three post-communist legislative elections as free and fair. The most recent Parliament elections took place in May 1998 and resulted in the dismissal of a center-left coalition that had consisted of the post-communist MSZP and the liberal SZDSZ. The present governing coalition, led by Prime Minister Viktor Orban, comprises three center-right parties: the FIDESZ-HCP with 148 seats, the FKGP with 48 seats, and the MDF with 17 seats. The MSZP controls 134 seats and the SZDSZ 24. The far right-wing MIEP also emerged in this election and took 14 out of 386 seats. In 2001, these figures changed considerably when many representatives of the FKGP left the faction. The party s leaders now have little influence, even over the very members of the cabinet it has nominally delegated. The most recent presidential election took place in June 2000, and the process was free and fair. Since the Constitution sets a two-term limit on presidential mandates, President Arpad Goncz, who completed his second five-year term in 2000, was not eligible to run. In keeping with the essentially ceremonial character of the office, the Constitution establishes that Parliament, and not the general electorate, elects the president. Nominees must demonstrate the support of at least 50 members of Parliament to become candidates. To win in the first two rounds, a candidate must receive a qualified majority (or two-thirds of the total number of seats). In the third round, a simple majority of the representatives present is sufficient. In the 2000 election, Parliament elected Ferenc Madl, a well-known professor of jurisprudence and a member of the conservative government between 1990 and 1994, in the third round by a simple majority. The coalition parties supported his candidacy. The opposition parties did not nominate candidates.

4 HUNGARY 199 Low voter turnout figures for national and municipal elections highlight a weakness in Hungary s democratic regime namely, an arguable lack of popular support. This is evidenced by a number of independent circumstances. Popular participation in the political process, for example, has remained relatively low by European standards, ranging from 55 to 68 percent in the first round of national legislative elections and from 42 to 58 percent in the second round. Voter turnout for municipal elections has been even lower, ranging from 38 to 45 percent. By comparison, no Western European country other than Switzerland (where local referenda decide most public issues) has a lower turnout in national legislative elections. In regional perspective, too, the nation s voter turnout rate is 19th among 26 former Communist and former Soviet countries, according to the International Institute for Democracy and Electoral Assistance (IDEA). In a narrower regional perspective, Hungary ranks 7 th out of 10 Eastern and Central European countries. Another indicator of insufficient popular backing for the democratic regimes is the fact that membership in political parties is low. Even according to their own records, the aggregate membership in the six parties represented in Parliament does not exceed 210,000, or less than 2.5 percent of the adult population. Furthermore, party officials readily admit that only an insignificant proportion of that figure can be regarded as effectively taking part in intraparty political activities. Due to these facts, rank-and-file members have little if any say in determining their party s general direction, except during leadership contests. In most parties, central executive bodies, which comprise a small number of elected officials, make the important political decisions. By all accounts, active party membership has declined since Currently there are an estimated 70 to 80 officially registered parties. This is an all-time low, compared to the nearly 200 parties that existed in the early 1990s. These widely acknowledged phenomena suggest that the populace lacks strong trust in Hungary s new, and still fragile, democratic institutions. Thus, the country s political stability is not vulnerable to defects in its institutional setting or to imminent threats against the entire constitutional establishment. Instead, a major cause of concern is the fact that the existence of democratic processes is not substantiated by the actual participation of the citizenry, especially during interelection periods. Since 1990, no single popular initiative has proved strong enough to significantly shape the nation s political agenda. Civil Society According to the Central Bureau of Statistics, there were 61,907 registered nongovernmental organizations in Hungary in 1999, 65,335 in 2000, and 67,151 in Experts agree, though, that no more than 20,000 or 30,000 of these actually carry out continuous activity. A 1998 amendment to the law on nonprofit organizations created a special category for NGOs whose activity promotes the public benefit. This status, which the Metropolitan Court in Budapest can grant after reviewing an organization s application, guarantees NGOs special rights and obligations. An estimated 10,000 groups have the status of a public benefit organization. The number of major NGOs dealing with women s issues does not exceed 15, and not all of these are national organizations. Most ethnic groups have their own civic and cultural organizations, although many are not financially viable and therefore cannot engage in costly activities such as bringing lawsuits against government agencies. Although there are no exact figures on the share of the population that participates in NGOs, estimates show that no more than 1 or 2 percent of the population engages in voluntary activity. Hungarian NGOs employ approximately 60,000 paid staff members. All major Hungarian churches, many small grassroots religious groups, and international religious organizations (or their Hungarian branches) maintain considerable networks for distributing goods to the needy. They typically focus their work on activities like helping the homeless or maintaining telephone help services of various kinds. More than 60 percent of the Hungarian population claims to belong to one religious group or another. However, according to the U.S. State Department s 2001 Report on International Religious Freedom, independent surveys in the mid-1990s indicated that the population is not particularly devout. Only 15 percent of those surveyed considered themselves to be religiously active and closely followed the tenets of their church. The majority, 55 percent, said they practiced religion in their own way or were nominally religious but not regularly active in their church. The Roman Catholic Church is by far Hungary s largest and most influential religious formation. It enjoys the loyalty of approximately 70 percent of all persons who maintain religious ties. Traditionally, the largest Protestant church is the Calvinist Church, which claims the adherence of up to 21 percent. The Calvinist Church is especially strong in the eastern regions of the country. It is also the most politically active group and has strong ties with certain rightwing groups and parties. The Catholic and Calvinist Churches, together with the other historical churches such as the Lutheran Church, the Unitarian (Anti-Trinitarian) Church, the Greek Orthodox Church, and the Jewish community, have certain privileges in gaining access to government support and public education. Newer religious groups that is, mainly those that emerged after 1989, when religious life was freed from its previous constraints enjoy fewer privileges. Some of the latter, especially a Pentecostal group called the Congregation of Faith, have steadily increased in popularity over the last two decades, despite repression in the 1980s and politically inspired denunciations in the

5 200 HUNGARY 1990s. The Congregation of Faith now claims to be Hungary s fourth largest church. Hungary was the first post-communist country to adopt a law regulating the activities of public interest NGOs. Organizations that receive this status must disclose their revenues on an annual basis. A special feature of the law is a provision that allows all taxpayers to donate 1 percent of their personal income tax payments to any public interest NGO they choose. The beneficiaries of these payments must disclose such donations. Although there is a core of experienced trainers and practitioners who regularly organize courses in NGO management and fund-raising, the overall situation is still characterized by a lack of information and proper management. According to official estimations, no more than 5,000 NGOs have an annual budget that exceeds 5,000,000 forints ($18,000) and, therefore, can be considered financially viable. Some of the better-trained and -organized NGOs receive funding from international organizations. These groups typically have well-defined agendas and focus on issues such as women or the environment that have greater international appeal. Yet the overwhelming majority of NGOs have to rely on their own resources or government funding. A program under which state property can be donated to nonprofit organizations has stirred some controversy, with critics charging that the current ruling coalition has favored organizations with which it has political ties. Such allegations were made in connection with the previous government as well. A variety of trade union associations has emerged in Hungary since Still, the post-communist National Association of Hungarian Trade Unions is by far the most organized and has more members and vaster financial resources than the newly formed unions. Estimates of the number of employers that belong to trade unions vary widely. According to union estimates, the number of organized workplaces is no fewer than 1.3 million, or 36.1 percent of the total workforce. The records of the Bureau of Revenues indicate, though, that only 775,000 employers (or 20 percent) pay their members union fees regularly. The proportion of organized workers is significantly lower in the private sector, and trade unions are virtually nonexistent in companies with fewer than 10 employees. Companies of this size represent 1.1 million laborers, or about 30 percent of Hungary s workforce of 3.8 million. Interest groups that represent small businesses and farmers are large in number but little in consequence, not least because they are plagued by internal divisions. Trade union politics are notably nonmilitant, in part because the core labor establishment still comprises former fellow-traveler union bosses whose political ties with the nation s new political elite (excluding the MSZP) are notoriously weak. Arguably, their capacity for mobilization is quite limited even among their own ranks. The lack of strong labor organizations might have mitigated the political conflicts accompanying the most painful phases of the country s political and economic transformation, yet this fact may turn out to be a problem in the future. Should a significant proportion of the population grow frustrated in its long-term economic and social prospects, the absence of well-established and effective institutionalized structures of worker action could lead to participation in more anarchic and violent forms of protest. A number of public policy research institutes, typically in the field of economic policy, emerged during the early years of transition. Some, including GKI Ltd., Kopint- Datorg Ltd. and Tarki Ltd., were able to secure their reputations as reliable sources of information, often as a kind of external check on officially released data. On the whole, however, research institutes concentrate more on analysis and prediction than on policy proposals, and their influence on policy decisions is, in general, not clearly recognizable. In the early stages of transition from Communist rule, Hungary introduced the legal basis for a pluralist (mixed public and private) education system. Although recent data have indicated shifting preferences, the vast majority of students still attend public educational institutions. It is estimated that in the year 2000 around 130,000 children (or 15 percent) under the age of 18 attended different private schools. Of these, 85,000 attended various church-based schools, and around 45,000 went to schools maintained by nonreligious private organizations. By comparison, in 1992 only 23,000 children attended church-based schools, and around 5,000 were registered in parochial institutions. The primary and secondary levels of education are relatively free from ideological propaganda, and teachers may select from a wide variety of authorized educational materials. Ideologically inspired interventions by government authorities are rare, and a case in 2001 was an exception rather than the rule. In this case, the Public Administration Bureau of the city of Budapest, which supervises the operation of the school system, attempted to shut down a primary school that is run by a private foundation. The head of the Bureau alleged that the organization has ties with the Church of Scientology. Independent Media Hungary has a reasonably diverse market for print and electronic media. The primary sources of information on public affairs are the various television news programs. According to recent data, the three most popular prime-time daily evening news broadcasts boast 2.5 million to 3 million viewers on an average day. Public radio is also a major source of information, and its main news programs attract 1.5 million to 2 million listeners. The four national daily political newspapers have a total circulation of around 350,000 copies, with considerable estimated overlaps in readership. These

6 HUNGARY 201 papers primarily provide information for the better-educated and wealthier segments of the population. The vast majority of Hungary s media are in private hands. More than 80 percent of print media and around 70 percent of radio and television stations are privately owned. There are an estimated 220 commercial television stations and 30 radio stations in private hands. The market-oriented restructuring of Hungary s media was accompanied by profound changes in the population s media consumption patterns. While in the early 1990s a relatively high proportion of the population read newspapers on a daily basis (400 to 500 per 1,000 adults), only 300 did so by the end of the decade. Moreover, as a result of significant restructuring in the market for daily newspapers, tabloids and quasi tabloids gained significant ground at the expense of papers with high-quality political and cultural coverage. Likewise, when national television channels were privatized during the same period, entertainment magazines largely replaced political and cultural programs. These changes may be said to reflect the larger underlying process of disillusionment with democratic politics. Traditionally, the Bertelsmann-owned Nepszabadsag has enjoyed higher circulation (approximately 210,000 copies) than any other daily. Recently, however, the paper has taken second place to Metro, a free quasi tabloid that was founded less than two years ago and already enjoys a daily circulation of 240,000. Incidentally, Nepszabadsag is expected to change hands soon, because Hungarian regulations do not allow companies to own more than a 25 percent stake in both a national daily and a national television station. Bertelsmann s share in RTL-KLUB television (see below) exceeds that amount. The Swiss organization Ringier is expected to buy Nepszabadsag. Should this happen, it might foreshadow further realignments in the print media market, since Ringier owns another national daily newspaper, Magyar Hirlap. After the merger in 2000 of the right-leaning newspapers Napi Magyarorszag and Magyar Nemzet, only four nationally circulated political dailies, including Nepszabadsag, remained. Analysts generally agree, though, that the Hungarian market is not strong enough to sustain four political dailies. Similar tendencies have been observed in the tabloid market as well. In 2001, for example, Blikk and Mai Nap, the two tabloids with the highest circulation, merged. So far, though, the transaction has failed to deliver expected increases in sales. Hungary has five national television channels, three of which are state owned. The two private channels, TV2 (owned by a Hungarian-American-Scandinavian consortium) and RTL-KLUB (an affiliate of the Belgian-French RTL-UFA), enjoy 85 percent of total viewership and advertising. Since privatization of the television market began only a few years ago, it is difficult to estimate the financial viability of these stations. Nevertheless, observers tend to agree that TV2 and RTL-KLUB will be profitable in the long run. Privately run media in Hungary are, for the most part, editorially independent. It is true, though, that government agencies and party leaders have attempted at times to influence editorial decisions. For example, Parliament passed a piece of legislation in May 2001 that opponents believed would make serious impositions on editorial freedom. The bill, named Lex Repassy after its sponsor Robert Repassy, effectively stated that if a news organization publishes an opinion that someone considers unfavorable to him or her, it may be legally obliged to publish that person s response as a form of correction. In December, the Constitutional Court declared the law void in its present form. As one news report noted, the court concluded that the legislation would excessively limit freedom of the press and expression by introducing the right of response without the restrictions applied in international practice. Specifically, paragraphs 9 to 11 of the court s ruling upheld the principle of having opposing opinions obligatorily published, but claimed that the contested bill lacks sufficient specificity and thus is contrary to the rule of law. This implies that with sufficient specification, the bill could pass the test of constitutional review. A representative of the MSZP called the ruling a red-letter day in the history of Hungarian press freedom. Repassy, however, believed the court s decision still recognized the right of reply as an important means of protecting the personal rights of the individual. He stated his intention to modify and resubmit the bill. The situation is fundamentally different in the stateowned media sector. The 1996 law that regulates public television and radio channels sought to attain a reasonable degree of nonpartisanship by establishing a board of trustees for each channel. Each board has an eight-member presidium (or standing committee) with a four-year mandate. Half of each presidium s members are nominated by the ruling parties and the other half by opposition parties. In 1998, shortly after the current government came to power, the presidium for Hungarian Television was dissolved. This action followed a series of contentious and failed attempts to elect the chairman of the institution. The new governing parties named their four representatives to the presidiums and noted that under the law the opposition parties could not enjoy representation on the presidium until they agreed on their appointments to the remaining four slots. However, this task proved impossible when the farright MIEP, which has only 14 seats in Parliament, demanded two out of the four slots. The MSZP and the SZDSZ, with a total of 158 seats in Parliament, strongly disagreed. Thus, since the opposition parties failed to agree on their appointments, the presidium was formed solely with the four persons whom the governing parties selected. Leaders of the opposition claimed, on the other hand, that the law allows for unilaterally forming the presidia only if opposition parties have failed to nominate candidates. They believe, also citing the law, that reaching agreement is not a prerequisite of having representation on the presidia. That is, the law does not specify that lack of agreement on either

7 202 HUNGARY side is sufficient ground for unilaterally forming the presidential bodies. In discussing the controversy over the presidia, it is important to note that some observers of Hungary have suggested that the problem is with the law itself. The East European Constitutional Review, for example, has described the law as faulty, containing legal loopholes that can be exploited for political advantage. Specifically, the law states that half of the members eligible to be elected into the Board of Trustees shall be nominated by the governing Parliamentary factions, the other half by the opposing factions in such a manner that at least one member nominated by all factions shall be elected The Presidential Body of the Board of Trustees is formed when all of its members are elected. However, the fact that the governing or the opposition parties do not nominate a member, shall not hinder the formation of the Presidential Body of the Board of Trustees. In 1999, the Constitutional Court issued a ruling on the law, which stated that [w]ithout any doubt, it is an infringement of a rule protecting fundamental constitutional rights if either the government or the opposition is overrepresented in the presidia...and thus may gain decisive influence ( paragraph 4 and paragraph 7.3). However, it also ruled that unilaterally forming the presidia is, from a constitutional perspective, a lesser danger for the freedom of opinion than if, in the absence of presidia, the boards of trustees of public media cannot function at all (paragraph 7.3). For practical purposes, the court s ruling upheld the current situation but recognized the concerns of the opposition parties. This process was essentially repeated in early 2000, when the mandates of the presidia overseeing national public radio and Duna TV (a state-owned satellite channel) expired. As a result, the three presidia of the boards of trustees for state television and radio are currently controlled by representatives of the governing parties. Consequently, it is now widely argued that there is general bias in the media s coverage of political events and a lack of monitoring of the executive s activities in the national public media. According to the National Radio and Television Board, an organization that supervises the programs and activities of public and commercial broadcasting stations, appearances by politicians belonging to the ruling coalition parties outnumbered opposition voices by four or five to one during the first few months of In particular, the board has pointed out that certain public television and radio programs explicitly promote the ruling coalition s political agenda. The Hungarian press has uncovered illicit state activities, but transparency remains a problem. Difficulties associated with a vague freedom of information act, Law No. 63/1992, also play a role. It is common practice among the ranks of government officials and even members of the cabinet, for example, to refuse to respond to inquiries about government activities. In previous years, the parliamentary commissioner for data protection and freedom of information tried in vain to persuade the cabinet to make the proceedings of its regular sessions accessible. In a recent case, the cabinet refused for months to answer questions about the use of public funds to disseminate information about cabinet activities. The opposition considers this information partisan propaganda. Hungary has established the necessary environment in which a free press can function. The Constitutional Court ruled in 1994 that Article 232 of the criminal code, which deals with libel, was unconstitutional because the public s right to criticize government officials or other politicians must be protected to a much greater extent than its right to criticize private citizens. This decision essentially ruled out the possibility that libel laws could be used to harass journalists who criticize government officials. Furthermore, in 2000 the Constitutional Court struck down a criminal prohibition against deliberately spreading panic that was used occasionally against journalists. In the same year, the Court upheld prohibitions against desecrating national symbols and displaying authoritarian symbols a move that some viewed as a retreat from an earlier decision to overturn a law against inciting [persons] to hatred against ethnic or other communities. In this case, the Court had ruled that the law must secure the right to free speech regardless of its valueor truth-content. On the whole, the Constitutional Court has remained consistent in its robust interpretation of the freedom of expression. However, lower-level courts are occasionally more lenient with government officials who try to take legal action against journalists. Likewise, since the Constitutional Court is not an appeals court, the concrete legal practice is generally less favorable toward press freedom. Governance and Public Administration Hungary has a parliamentary system of government in which the legislature is the only rule-making institution. The government may introduce lower-level provisions within a limited range, provided they do not contradict acts of Parliament. Parliamentary sessions provide the main stage for debates between the government and the opposition. Governing is essentially based on a majority of the coalition parties within the legislative assembly. Deputies who represent parties in the governing coalition support the course urged by their leaders and rarely if ever vote against the instructions of the government. Therefore, the system of checks and balances between the legislative and the executive branches, and especially the opposition s right to question the government s activities, gains special significance. Typically, the legislature exercises its control over the executive not by voting against bills that the executive has proposed, but by engaging in public discussions. One of the most important guarantees against any abuse

8 HUNGARY 203 of the power executive branch is the Constitution itself, which may be amended or modified only by a two-thirds majority vote of the legislature. Modification of the laws concerning fundamental human rights and basic democratic institutions requires wide consensus. Furthermore, Act No. 46, which Parliament adopted in 1994, details the rights of members of Parliament vis-à-vis the executive branch. It specifies that members of the government must answer interpellations and questions posed by members of Parliament during at least one plenary session per week. The act also states that, upon the initiative of at least 20 percent of all representatives, Parliament must establish special committees to investigate the dealings of any government agency in any field of activity. These rules aim to ensure the ability of even a relatively small minority of representatives in the legislative assembly to draw public attention to issues it deems important and to uncover government activities that it believes are contrary to the national interest. In recent years, these rules have been instrumental in ensuring transparency and accountability. Over the last three years, however, there has been a shift in the balance of power between the legislative and the executive branches of government. The shift concerns the general deliberative function of the legislature as well as the more specific problem of ad hoc investigational committees. In early 1999, representatives of the coalition parties decided that plenary parliamentary sessions should be held not every week but only every third week. As a result, the total annual number of plenary sessions has declined considerably. The government s justification for the change was that since the legislature has little or no legislative staff, it would be more efficient to hold sessions every three weeks. However, it should be noted in this regard that Parliament s operational costs have continued to increase, despite the introduction of the three-week system. Thus, citing budgetary constraints on legislative staff could be seen as disingenuous. Another argument that is more often made in support of the three-week system is that representatives might attend to the concerns of their respective electoral districts in the intervening weeks. In fact, only 176 out of 386 representatives are elected in individual districts. Thus, one might argue that the other 210 representatives have little to attend to in the in the interim period. To be sure, certain evidence suggests that despite the three-week system the productivity of the legislature has shown no dramatic decrease. The number of interpellations has remained largely unchanged, with 804 in the period between 1994 and 1998 and 696 in the period between 1998 and In addition, in the period between 1999 and 2001, Parliament passed 211 new bills and 268 resolutions. Of the 211 new bills, the ratification of international treaties, requiring no extended discussion, amounted to 134 in the period. In a comparable period with the 1-week system, between 1995 and 1997, Parliament passed 229 new bills and 374 resolutions. Of the 229 new bills, the ratification of international treaties amounted to 91. Thus, the legislature passed 138 new domestic bills between 1995 and 1997, and 77 new domestic bills between 1999 and Although these figures might suggest a slight reduction in the legislature s productivity, it must be noted that the first few years of the transition period represented an extraordinary demand for new legislation in all areas of life. The slight reduction in the level of new legislation proposed may then represent the decreasing pressure to produce new bills in general. However, other evidence suggests that the legislature s oversight capacity has been diminished as a result of the three-week system. For much of the past decade, the number of plenary sessions in non-election years ranged from 91 to 98. After the introduction of the three-week policy, the numbers fell to 66 in 1999 and to 69 in In the first part of 2001, there were only 35 sessions. The number of weeks during which plenary sessions take place declined from an average of 40 in the early 1990s to a mere 16 in 1999 and 17 in This essentially means that the legislature was deprived of the right to pose questions to representatives of the executive branch during 36 and 35 weeks, respectively, of the year. As a result, the number of so-called immediate questions dropped from a total of 1,276 between 1994 and 1998 to a mere 508 between 1998 and This aspect of the legislature s work is meant to impose external constraints on the executive by creating a scene of continuously discussing the activities of the executive. The rights granted to the opposition such as posing questions regularly or staging parliamentary investigations is crucial for the proper functioning of the legislature and the fulfillment of its role as a check on executive power. A similar tendency may be observed in the executive s attitude toward special investigatory committees. In the past, committees like these were a major force in publicizing and uncovering unlawful government actions. Even though investigations did not always result in criminal proceedings, the lengthy and extensively covered hearings of these bodies played an important role in drawing public attention to illicit activities. The well-publicized meetings of one such committee in 1996 and 1997 were widely seen as having been instrumental in the fall of the previous coalition. The parliamentary minority s right to such investigations is safeguarded by the provision that special committees must be established at the written proposal of at least 78 representatives. By contrast, since the 1998 legislative elections, opposition parties have made nearly 20 requests for investigations of a variety of cases, with none resulting in the creation of a special committee. Rather, representatives of the coalition parties have either voted against the creation of such investigative bodies or tried to alter the proposed agenda of the committees. However, current regulations do not permit these actions. Most recently, the parliamentary majority rejected two separate calls by opposition parties to establish probes into alleged corruption cases that could have had direct links to the prime minister s family. Jozsef

9 204 HUNGARY Szajer, the floor group leader for FIDESZ-HCP, dismissed the efforts as an election show and scandal politics. As an overall consequence, though, Hungary s legislative body has been deprived of an important means to make the executive s activity more transparent. Other developments have further shifted the balance between the executive and the legislative branches of power. One development concerns a government initiative in 2000 to change the order for parliamentary debate on the annual budget. Hitherto, the minister of finance has submitted budget plans for the coming year to Parliament for consideration between October and December. On September 15, 2000, though, the government submitted budget proposals for both 2001 and 2002 and declared its intention to perpetuate a two-year budget cycle. Under this system, members of the legislative body would be deprived of the opportunity to review the executive s plans for expenditure and revenues on an annual basis. In addition, the prime minister is on record for having suggested a three-year budget cycle. In this respect, it is particularly worrying that an increasing portion of public spending is conducted not through the budget but by agencies like government-owned investment banks that fall outside of legislative supervision. Last, high-ranking government officials, including the prime minister, are publicly considering a suspension of plenary sessions prior to the April 2002 legislative elections. If implemented, this policy would deny opposition parties their single most important forum for having their views heard. Since parties generally lack sufficient financial and organizational resources to conduct efficient electoral campaigns, media coverage of regular political events remains the most important vehicle for reaching their constituencies. As such, a suspension of plenary sessions could easily have a considerable impact on the outcome of the 2002 elections. As of November 29, 2001, the legislature was scheduled to meet for two days in February. In such instances, Prime Minister Viktor Orban and Speaker of Parliament Janos Ader are usually successful in persuading parliamentary deputies within the ruling coalition to agree to their plans. Although the MIEP has generally supported the executive s intentions, the MSZP and the SZDSZ have protested against such aspirations in various forms over the last three years. However, they have failed to command significant popular support and have proved incapable of keeping these issues on the national political agenda. Ultimately, the growing imbalance between executive and legislative powers, combined with an apparent absence of popular protest against it, constitutes the most serious challenge to Hungary s new democratic regime and suggests that democracy might be weaker than it is usually thought to be. One can see the overall consequences of these developments by taking a closer look at the events of As mentioned above, the parliamentary faction of the FKGP lost nearly half its membership. The allegiance of its remaining members to the ruling coalition remained uncertain. As a result, since the early months of 2001, the ruling coalition s majority in Parliament has been fluid or, in the eyes of some, nonexistent. For example, in September when several members of the FKGP became independents, the number of deputies representing the governing coalition dropped to 192 seemingly two votes short of an absolute majority. However, the ruling coalition pointed to agreements with four independent deputies, whose support gave the coalition a total of 196 votes in Parliament. In contrast, the MSZP argued that the government had in fact lost its majority, and it called for a clarification of the rules of minority government. Either way, the government s majority was tenuous enough that it had to rely on opposition support (that of 11 representatives of the MIEP and 3 members of the MSZP) to approve its audit of the 2000 budget. Likewise, it goes without saying that a new government cannot take office in 2002 without obtaining a sufficient majority of seats in the legislature. The Hungarian constitutional system recognizes two levels of subnational government, each having a varying amount of authority. Every Hungarian settlement has a directly elected mayor and, with the exception of small villages, an elected representative body that enjoys substantial decentralized power. These bodies are responsible for maintaining health care institutions and primary and secondary public schools and for levying taxes on real estate and industrial activities. Furthermore, they possess statutory rights within a limited range of fields. County assemblies, which hold minor regulatory functions, constitute the second, though relatively insignificant, level of subnational government. Since the establishment of this system of local governments in 1990, the only major change has been the introduction in 1994 of direct mayoral elections. Previously, local representative bodies selected mayors. All three nationwide municipal elections (in 1990, 1994, and 1998) were free and fair. Municipal governments receive most of their revenues from the central state budget on a normative basis, with predetermined standards of distribution in accordance with the sorts of institutions they maintain. The proportion of revenues that municipal governments may allocate without predetermined standards has been diminishing ever since the introduction of the new system of local governments. In 1992, local governments controlled spending resolutions over as much as 50 percent of personal income taxes. This proportion was reduced to 30 percent in 1995, to 15 percent in 1999, and, finally, to 5 percent in In 1998, local governments raised no more than 33 percent of their total revenues. Various associations of municipal governments have expressed concern repeatedly about their growing dependence on the central state budget. Although local governments overall resources have not been diminishing, they have less control over how to spend them. Another development that has affected the independence of municipal governments is the national government s increasing inclination to distribute central