Transregional Center for Democratic Studies

COVID-19 and the Curtailment of Municipal Power in Hungary

by Kristóf Szombati, Research Fellow, Max Planck Institute for Social Anthropology, Halle 

The statue of the eponymous politician at Széll Kálmán Square, Budapest during the COVID-19 pandemic in Hungary, June 2020 Source: WikiCommons.

On March 30th, Hungary’s parliament passed a law giving the Orbán government the right to rule by decree indefinitely. While international commentators were quick to interpret the move as the final blow to Hungary’s moribund democracy, Hungarian pundits took it to be a clever political ploy aimed at discrediting the opposition. In their view, by setting impossible conditions, such as refusing to include an expiration date on the state of emergency, Orbán was compelling opposition representatives to vote against the measure so that he could claim that the opposition was undermining the national effort to fight the pandemic. From this viewpoint, Orbán’s latest move appears to be political theater and nothing more. 

However, a string of initiatives launched in April with the aim of circumventing, curtailing and discrediting municipal power reveal the limitations of both interpretations. The trouble with the first interpretation—that the emergency law makes Hungary a dictatorship—is that Orbán has de facto ruled by decree for 10 years now. The legislature functions as a rubber-stamp parliament, with ruling Fidesz party MPs passing motions without substantial debate, in the dead of night if necessary, and the president quickly signing them into law. Yet this does not mean that political competition has ended. In fact, it has moved to new terrain, as I demonstrate below. The problem with the second interpretation—that the emergency law is simply political theater—is that it focuses excessively on the symbolic dimension of politics, pushing other dimensions and terrains out of view. Although Hungary is no longer a liberal democracy, political competition, however unbalanced the playing field is in favor of the ruling Fidesz party, still exists. 

In this article, I will seek to explore one of these terrains, by highlighting how the government is using the current crisis to further undermine the remaining bastions of municipal power. I begin with a very brief overview of the decline of municipalism in the past decade, then outline three ways in which municipal power is being challenged at the moment,* and end by offering some preliminary interpretations and by highlighting potential lines for future inquiry. 

The historical context: the decline of municipal power 

The modern Hungarian state has historically been characterized by the highly centralized bureaucracy and the limited autonomy of the self-governing counties and municipalities. In the early 1990s, political liberals spearheaded an effort to upend this legacy by granting democratically elected county councils a key role in administering schools, hospitals, and cultural institutions, and by endowing local municipalities with significant powers and revenues to intervene in communal affairs.** However, governments presiding over a chronically underfunded central state apparatus almost immediately withdrew powers and revenues delegated to municipalities. This re-concentration of administrative power and fiscal resources from the local to the national level was not matched by a parallel concentration of competencies. 

Municipalities were left with a wide range of obligations but less money, which forced them to compensate chronic shortages through a combination of austerity, tax hikes and increased borrowing. The conflict between the local and central state escalated during the Great Recession as several dozen municipalities found themselves on the brink of insolvency. The tension between the two levels of government also had an explicitly political dimension. First, national governments were increasingly irritated by local elites’ efforts to resist their strategic initiatives. Second, the increasingly bitter polarization of party politics led to the instrumentalization of municipal resources for partisan purposes, compelling ruling elites to look for ways to restrict municipal power.*** After a remarkable comeback and knock-out victory in 2010, the new Fidesz government moved quickly on both the financial and the political fronts to prevent municipalities from accumulating further debts and to prevent the opposition from replicating Fidesz’s successful instrumentalization of municipalities in their electoral campaign. 

The second Orbán government (2010-2014) transferred the management of schools and hospitals from county councils to the central government and severely curtailed local municipalities’ financial autonomy. This was done by stripping them of revenues and making municipal borrowing conditional on governmental agreement. This systematic effort to hollow out municipalism without destroying its foundations severely impaired municipalities’ administrative capacity and restricted their ability to regulate and intervene in local public affairs.**** However, by leaving the foundations of municipalism in place, Fidesz also left the door open to contestation from below. 

Ad hoc measures to unblock stalled strategic projects 

Opposition victories in key urban municipalities in the local elections of 2019 reignited political tensions between the two levels of government. Some of the newly elected mayors sought to flex their political muscles to thwart the implementation of unpopular governmental or government-backed projects. But the central government intervened to circumvent municipal efforts. For example, the newly elected Budapest mayor decided to stop the construction of several large museums in the highly symbolic location of City Park, which are a part of the government’s flagship cultural “new museum quarter” project. In response, the center recategorized the Museum project as an “investment in the public interest,” allowing construction to proceed. In another case from the small town of Göd, the newly elected mayor impeded a project for a Samsung factory, one of the largest foreign direct investments in the region, demanding compliance from the company to make data on the factory’s environmental impact public. To counter this, the government used the newly acquired emergency powers to convert Göd into a special economic zone administered by the Fidesz-dominated county council.

The enforcement of austerity 

On April 4th, Orbán’s chief of cabinet disclosed the government’s strategy for managing the ‘corona-crisis.’ Hungary’s plan diverged from the European mainstream with respect to its limited financial commitment and its inegalitarian thrust. While the Hungarian national bank and the government joined other European countries to announce cheap credit and tax holidays for companies, little was done to protect citizens from unemployment and support municipalities. Although 4,000 Hungarians are losing their jobs daily the government has done nothing to help them besides freezing the payment of private mortgages. It has refused to increase the duration of unemployment insurance beyond 90 days, or raise the universal family allowance, which has remained frozen at around 40 euros per child since 2008. 

More crucially, instead of offering support to local municipalities flooded with requests for social assistance, the government stripped them of further revenues. Furthermore, the state deflected the responsibility for looking after elderly citizens to municipalities. 

With the imposition of the lockdown, the municipalities, already under severe fiscal strain since before the current crisis, incurred additional costs as they were assigned more tasks by the central government. To make things worse, there was also a precipitous fall in their tax revenues. The government’s decision to further deplete municipal coffers and create new obligations pushed the poorer municipalities into a severe fiscal crisis. These less affluent municipalities cannot help but watch the crisis ravage poor communities in the coming months. 

The ‘blame your opponent’ game 

The austerity measures will not only prevent municipalities from interfering with the government’s crisis mitigation strategy, they will also allow the ruling party to significantly hamper the opposition’s attempts to create alternative models of municipal governance. More importantly, they will dampen the opposition’s efforts to use municipal resources in building an effective counter-hegemonic project for the parliamentary elections of 2022. 

If all this weren’t enough, the ruling party has gone a step further to discredit its opponents. For example, in April Orbán used his weekly public radio interview to blame the newly elected left-wing mayor for COVID-related deaths in an elederly care home administered by the Budapest municipality. The care home in question became the focus of the daily press briefings by the governmental unit tasked with responding to the pandemic. This effort to discredit the new mayor is consistent with the government’s broader strategy of deflecting public attention from the failures of a chronically underfinanced public health system to the opposition’s alleged lack of support for the national effort to tackle the crisis. It is also in line with Fidesz’s strategic effort to degrade party politics to a mud-slinging contest eroding room for inconvenient discussions about the pros and cons of the government’s crisis management strategy. 

Preliminary interpretations 

While it is too early to draw conclusions, we can formulate some preliminary interpretations and highlight possibly fruitful lines for future inquiry. 

First, the pandemic has created fertile ground for political opportunism. The interesting question is what do the opportunistic interventions of the government tell us about its strategic objectives. Here, the Fidesz government’s effort to circumvent municipal vetoes on a major industrial project and an equally important cultural project are revealing. The first indicates the government’s efforts for capital accumulation. The second highlights Orbán’s ambition to symbolically elevate his political regime, distinguishing it from its ‘postcommunist’ predecessors. 

Second, the ruling party perceives municipalism as a potential threat to its hegemony. This is unsurprising in light of Orbán’s own experience. Fidesz’s historic victory in 2010 was in part the result of years of painstaking work in building a grassroots presence in the provinces, with provincial cities captured in the municipal elections of 2006 serving as springboards for the consolidation of rightwing civic networks in the countryside. This explains Fidezs’s recent efforts to prevent the opposition from offering substantial protections to local communities and using urban strongholds to promote an alternative social vision and political program. It will thus be interesting to follow this material and symbolic struggle between Fidesz and the opposition with a focused examination of popular representations and actions. 

Third, while the enforcement of austerity serves a definite political purpose, there may be other considerations at play. The motivation to prevent municipal spending on social protection might stem not only from Fidesz’s long-term goal of reducing state debt but also from its desire to safeguard the so-called “work-based society” model, which Orbán claims is an alternative to the West European welfare state model. Orbán’s glorification of hard work and his effort to re-industrialize Hungary is reminiscent of neoconservative producerist ideology. It will be interesting to see whether Orbán will soften the government’s rather ruthless social Darwinist crisis mitigation strategy, and how the opposition will navigate the fiscal restraints imposed on municipalities.


NOTES

* The attack on municipalism actually started the day following the emergency bill’s adoption when the government introduced a proposal to curtail the extra powers which mayors are granted under a state of emergency, first and foremost the power to take on the decision-making abilities of local councils (see footnote 2). The bill tabled by the government proposed to submit mayors’ decisions to administrative review, with the latter being carried out by an emergency body (the ‘local protection committee’) led by an official appointed by the central government. Mayors affiliated with the opposition argued that the proposal was not only unworkable but contradicted the principle of popular sovereignty by placing municipalities under governmental tutelage. Budapest’s left-of-center mayor, Gergely Karácsony, also warned that if passed, the bill risked worsening the coronavirus’ impact by slowing down decision-making. This criticism was echoed in the foreign press, forcing the government to quickly backtrack and withdraw the bill.
** Local municipalities (‘self-governments’) administer public affairs and exercise public power at the local level. As of today, their main competencies include maintaining kindergartens, providing child welfare and protection services, administering workfare programs and offering social services, offering cultural services, maintaining public parks and other public areas, and running basic public services (road maintenance, street lighting, refuse collections, etc). The local council, which has the power to manage community affairs through the adoption of local decrees, is the supreme authority of local government. Its mandate is generated through elections organized (on the basis of universal suffrage) every five years. The head of the council is the mayor, responsible for implementation and administration tasks, but also involved in decision-making by casting a vote as a member of the council.
*** In my own work I emphasized how local elites were able to resist the left-of-center Gyurcsány government’s effort to emancipate and empower stigmatized members of the Roma minority. The key to the success of this resistance was municipal control over public schools and local municipalities’ key role in the distribution of welfare payments. See my The Revolt of the Provinces: Anti-Gypsyism and Right-Wing Politics in Hungary (New York & Oxford: Berghahn), 2018.
**** While the Fundamental Law adopted by Fidesz in 2011 recognizes the principle of local government, it restricted the competences of local government by declaring that municipal powers must be exercised within theframework of the laws enacted by the national parliament. Furthermore, the new Law on Local Governments (CLXXXIX), also adopted in 2011, reinforced the powers of mayors by granting them a veto against the decisions of the local council as well as the right to make decisions between two sessions of the local council.


Kristóf Szombati has a background in both politics and academia. In 2007 he co-founded the green LMP party, which he left four years later to do a PhD on the rise of anti-Gypsyism and the far-right Jobbik party in rural Hungary at CEU (Budapest). He is currently a research fellow at the Max Planck Institute for Social Anthropology in Halle, where he is conducting research on illiberal statecraft in Hungary. 

This piece was a contribution to the Democracy & the Pandemic Mini-Conference of the Democracy Seminar held on May 20-21, 2020.

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