The Washington Diplomat June 2015

Defending Hungary

Hungary’s New Envoy Tries to Set Record Straight About Her Boss

by Larry Luxner

For several years, Hungary’s relationship with the United States has been in a free fall — spurred on by mini-crises like the State Department’s denial of visas to six Hungarian officials accused of corruption, Prime Minister Viktor Orbán’s 2014 vow to build an “illiberal state” à la China and Turkey, his angry opposition to European sanctions against Russia and a subsequent outburst by Sen. John McCain (R-Ariz.), who called Orbán a “neofascist dictator.”

Photo: Lawrence Ruggeri of ruggeriphoto.com

Ambassador Réka Szemerkényi

And conservative Orbán seems downright tame compared to Hungary’s extreme-right Jobbik party, which recently called for the country’s 120,000 Jews to be registered because they “pose a national security risk.” In mid-April, Jobbik won its first local by-election, narrowly defeating Orbán’s center-right Fidesz in the western district of Tapolca — and further cementing Jobbik’s position as the third-largest party in the Hungarian parliament.

In the midst of all this bad blood, two women hope to reverse the bilateral decline and put U.S.- Hungarian relations back on track: Réka Szemerkényi, Hungary’s new envoy in Washington, and her counterpart in Budapest, U.S. Ambassador Colleen Bell.

“There’s a nice symbolism in this,” Szemerkényi said during a lengthy interview at her Washington residence. “She’s a serious woman with a business background and has four children. I have a background in security policy, and I also have four children. And we have lots of common friends in Washington.”

But their backgrounds aren’t that similar: Bell, an Obama campaign bundler, was a producer for the soap opera “The Bold and the Beautiful.” Szemerkényi is a European defense and energy expert who has worked as national security advisor to the prime minister in addition to stints at the World Bank, think tanks, NGOs and Hungary’s main oil and gas company. She speaks impeccable English and is the first woman ever to represent Hungary as ambassador here.

Upon presenting her credentials in February to President Obama, she became the newest of 28 female ambassadors in town. She’s also one of a new crop of Hungarian women representing their landlocked, Indiana-size nation overseas, in diplomatic outposts such as Athens, Geneva, Lisbon, Madrid, New York and Stockholm. “This is an important period for our two countries,” said Szemerkényi, a veteran Fidesz supporter and longtime advisor to the prime minister’s office on foreign and security policy. “I’ve been working on this relationship for many years.”

Yet not everyone is thrilled with her appointment.

“No ambassador can improve relations between the U.S. and Hungary as long as Viktor Orbán is the prime minister. Not even a mother of four,” wrote political pundit Eva Balogh, whose Hungarian Spectrum blog is deeply critical of Orbán. “Szemerkényi, although she might be well- qualified for the job, is known to blindly follow the party line. I’m sure that the idea of having the clone of Viktor Orbán in the Hungarian Embassy in Washington doesn’t warm the cockles of anyone’s heart in the U.S. capital.”

The selection of Szemerkényi’s counterpart, Colleen Bell, as U.S. envoy to Hungary also ruffled more than a few feathers.

Bell, a TV producer and philanthropist who raised at least $500,000 for President Obama’s re- election campaign, was branded as “totally unqualified” by McCain to represent Washington’s interests in Budapest.

“I am not against political appointees,” the Republican from Arizona told fellow lawmakers prior to Bell’s confirmation vote. “I understand how the game is played, but here we are, a nation on

the verge of ceding its sovereignty to a neofascist dictator getting in bed with Vladimir Putin, and we’re going to send the producer of ‘The Bold and the Beautiful’ as the ambassador. I urge my colleagues to put a stop to this foolishness.”

His colleagues didn’t listen, and the Senate confirmed Bell by a vote of 52-42.

The two newly minted ambassadors had a four-week overlap in Budapest before Szemerkényi began her posting here in February.

“We met at the very beginning of her mission in Hungary, and we immediately became very good friends. We have a professional understanding and a personal touch,” said Szemerkényi, who during our interview was joined by her 6-year-old daughter, also named Réka (the ambassador’s other children are ages 11, 12 and 14). “We’re working in the same direction, to improve the Hungarian-American relationship. That’s one of the most important characteristics of this new chapter in bilateral relations.

“As a result of these negative spirals, many of the decisions were either not understood or interpreted in a negative light,” she insisted. “This ‘Hungary bashing’ in the international media has created an image that the U.S. does not understand what’s going on. Critical tones are based on these impressions. But if you go around the countryside, the trust in democracy is very strong, and we’re very proud of that. People don’t want to go back to pre-1990 days.”

Orbán himself knows those dark days well. In 1989, he gave a rousing speech in Budapest’s Heroes’ Square demanding free elections and the withdrawal of Soviet troops, catapulting him to national stardom. Just three years later, he became the leader of Fidesz, eventually transforming it into a political powerhouse.

Riding a wave of popularity, Orbán secured a two-thirds majority for his party in parliament in 2010 and is now on his third term as prime minister. He’s also presided over modest economic growth in recent years and major structural reforms in an effort to overcome decades of economic mismanagement.

But the prime minister grew disillusioned with Western economic prescriptions following the 2008 global recession, which hit Hungary hard, and said his country would forge its own economic path.

The result has been a mixed bag of what Orbán describes as much-needed reforms, but what critics in the European Union and United States call worrying signs of regression.

The prime minister used his party’s supermajority in parliament to rewrite the constitution and push through laws that circumvent the courts and remove checks and balances. Orbán defended the move, saying that Hungary’s hybrid electoral system was one of the most complicated in Europe, an unwieldy relic of communism that politicians of all stripes had wanted to overhaul.

He’s been called a power-hungry strongman who muzzles the media, stifles dissent, cracks down on NGOs and uses government purse strings to weaken opposition parties. Yet the type of media censorship and restrictions on protesters seen in Russia are largely absent from Hungary. He’s embraced Putin as a key ally, in part out of necessity given Hungary’s complete reliance on Russia for natural gas. Orbán has also railed against EU bureaucrats but accepted their money to boost Hungary’s competitiveness.

Szemerkényi says she is determined to present a more nuanced picture of her boss than the black-and-white portrayal he often receives in U.S. media, explaining the roots of complicated policies that have alarmed Brussels and Washington.

Szemerkényi, whose home is decorated with vintage black-and-white photos of the 1956 Soviet invasion that crushed Hungary’s democratic dreams, grew up under communist rule. Yet by the 1980s, she said, the authorities — wary of provoking another violent revolt — had instituted a softer, Hungarian-style “goulash communism” that gave people a modest measure of freedom and basically ignored those who weren’t politically active.

“We listened to Radio Free Europe all the time. Only three or four people in our class at school cared about politics. The other 30 were indifferent,” she recalled. “The party had a subtle, unspoken deal that if you didn’t go to demonstrations or give out pamphlets, they wouldn’t bother you. I think that for a large and significant segment of society, that was a comfortable life since they never confronted the regime.”

In fact, Hungarians enjoyed the highest living standards of any Soviet satellite in Eastern Europe. When the Berlin Wall fell in 1989 and the U.S.S.R. began self-destructing the following year, those living standards began falling rapidly, which perhaps accounts for why some Hungarians may not be as enamored of the transition to EU-style democracy as their counterparts in Poland and elsewhere were.

In this post-communist haze, Hungary’s traditional, male-dominated political hierarchy survived.

“When I went to the Ministry of Defense in 1990 after the first free elections, I was one of 10 civilians ever to set foot there. I was also the only woman in this group, and the youngest,” recalled Szemerkényi, who later became involved in the NATO enlargement while at London’s International Institute for Strategic Studies.

Within a few years of communism’s collapse, newly elected democratic governments quickly instituted political and economic reforms in the Czech Republic, Slovakia and Poland — but not in Hungary.

“For a fundamental change to take place, most of the major fields of reform were linked to a two-thirds majority in parliament,” said the ambassador. “That was seen as practically unachievable for over three elections after 1990.”

That rule, she said, was a clever legacy of Hungary’s communists, who knew they couldn’t avoid free elections but still hoped to remain in parliament by requiring at least two-thirds of Hungarian lawmakers to change the constitution.

“That was behind the idea of linking changing the constitution to a two-thirds majority,” she said, noting that this didn’t happen in the elections of 1990 — nor in the subsequent elections of 1994, 1998, 2002 or 2006. Once Fidesz finally won in 2010, she said, “practically all of our attention went into [reforming the economy], and no serious energy was left in the country to explain what was happening to our allies and friends.”

Photo: Serge Bystro from Moscow, Russia / Licensed under CC BY 2.0 via Wikimedia Commons

The Hungarian Parliament is one of Europe's oldest legislative buildings.

The ambassador said that in 2010, after eight years of leftist governance, the Hungarian economy was in shambles.

“By then, after these two socialist terms, Hungary’s level of national indebtedness was higher than in 1990, after 40 years of communism,” Szemerkényi told The Diplomat. “Because of the irresponsible policies of the previous government, Hungary was hit harder than any other central European country. Analysts in London and New York were predicting that Hungary could very easily follow Greece [into bankruptcy].”

One root cause of Hungary’s fiscal decay was the proliferation of loopholes that allowed rampant tax evasion. By 2010, only 1.8 million of Hungary’s 10 million citizens were paying their taxes, depleting an already unsustainable pension system. Orbán also introduced targeted taxes on the energy, banking and telecommunications sectors while cutting gas and electricity costs, earning the wrath of the foreign nationals that invest in those sectors but pleasing many voters.

Corruption remains an endemic problem in Hungary, yet thanks to structural reforms begun by Fidesz in 2010, last year the Hungarian economy expanded by 3.6 percent, the highest in the 28- member European Union. Debt levels are at 77 percent of GDP, down from 89 percent, the country has reduced its deficit to EU-mandated levels, and foreign investment has grown by 14 percent, reaching its highest level in 17 years.

Equally important, Szemerkényi said, 4.1 million Hungarians now pay taxes, and the unemployment rate has fallen to 7.7 percent from the 10.2 percent recorded in 2010. Some 170,000 people found jobs in the private sector last year. “As a result of these figures, Standard & Poor’s upgraded Hungary to a BB+ rating,” Szemerkényi said. “S&P also stated that Hungary has become much better prepared to withstand external shocks.”

Yet Orbán gets far more attention for reflexively opposing the West than for having steered Hungary through financial turmoil. While the opposition remains fractured, Orbán’s party has slipped in popularity, losing ground to Jobbik and forcing it to adopt more rightwing positions. As a result, some of the bad headlines Orbán has brought on himself.

Following the recent fatal stabbing of a young woman in the Hungarian town of Kaposvár, Orbán called for the reinstitution of the death penalty. His appeal raised eyebrows across the EU, which specifically bans membership to any country that allows capital punishment.

“Hungarian political analysts say Viktor Orbán knows that it is impossible to reintroduce the death penalty, but by keeping this on the agenda, he can gain some support,” Euronews correspondent Attila Magyar reported May 9. “The latest opinion polls show that almost half the population agrees with the reintroduction of the death penalty. So the Hungarian PM can act like the protector of Hungarian sovereignty again.”

Szemerkényi didn’t directly address the controversy, saying only that such issues must be discussed within the framework of the Council of Europe — and denying that the death penalty declaration was only a ploy to draw right-wing voters away from Jobbik.

“Many analysts say Jobbik has the potential to become the big challenger of Fidesz in the next elections. Other analysts say that because its message is so extreme, it has a limited scope in attracting people,” she explained. “We must develop good answers to very understandable concerns in society and offer them better solutions. Then they don’t have to vote for a party that doesn’t offer proper solutions.”

The ambassador also denied that her ruling Fidesz party is anti-Roma or anti-Semitic. Hungary is home to about 700,000 Roma, or gypsies, who are frequently the target of discrimination and scorn (some polls say up to 80 percent of Hungarians have a negative view of the Roma).

Photo: Derzsi Elekes Andor / Licensed under CC BY-SA 3.0 via Wikimedia Commons

In recent years, Prime Minister Viktor Orbán's center-right party has drawn criticism from the European Union for stifling dissent, although he retains a strong base of domestic support, as seen in March 2012 demonstrations in Budapest, at left, supporting Orbán's controversial decision to amend the constitution.

“Our policies for Roma inclusion are founded on two concepts: one is social funding and support for families living under the poverty line, which can only be given to families that allow their children to go to school. It’s a value decision that they have to learn how to read, write and do math. Another pillar of our policy is that it’s important for kids to see that their father gets up in the morning and goes to work.”

The ambassador added that her government has “zero tolerance” toward anti-Semitism. Despite widespread criticism of Orbán’s policies by Jewish organizations, Szemerkényi said she recently met with Annette Lantos, widow of the late Sen. Tom Lantos, a Hungarian-born Holocaust survivor, whose group had often criticized Hungary.

“But now they believe the situation is really not that bad. We have a very good relationship,” she insisted.

Still, Jobbik’s popularity and Orbán’s unabashed nationalism have prompted concern in Western capitals that Hungary has reached an inflection point, as it backslides on democracy and cozies up to Putin at a time when Russia is rattling its saber in Ukraine.

The Diplomat interviewed Szemerkényi on the 11th anniversary of Hungary’s membership in the EU, which it joined in 2004. Since 1999, it has also been a member of NATO. In fact, post- communist Hungary emerged as one of Russia’s loudest critics — until, that it, Orbán’s became Putin’s sympathetic ear in Europe. The ambassador, however, wasn’t shy about criticizing Moscow. She said that in the years after the Soviet collapse, the United States and its allies should have pushed even harder to enlarge NATO beyond the 28 current members of the Brussels-based military alliance.

“We had a window of opportunity after 1990, and now this window may be closing,” she lamented. “If we had been more conscious of how to profit from the gift of history, when we could build democracies, we’d have been in a different situation today.”

As a result, she said, Russia represents a “very significant strategic threat” to Eastern Europe today, evidenced by Putin’s annexation of Crimea last year and continued fighting between Ukrainian troops and Russian-backed rebels that has left more than 6,000 people dead and displaced a million more.

Meanwhile, Szemerkényi said, with the economy improving, the Orbán government intends to increase its defense budget to 2 percent of GDP, as Hungary committed to do at a NATO summit last year in Wales.

“The big question is, how can the sovereignty of Ukraine be regained? Obviously, the challenge is very subtle, in many ways bringing up issues we thought were resolved,” she said. “Nobody thought there would be such a development in Europe after 1990.”

Yet Szemerkényi must tread carefully because, as she concedes, Hungary’s delicate relationship with the Russian giant to the east is fundamentally defined by its “clear energy dependence” on the Kremlin.

“Our situation is probably the most sensitive one in Europe,” she said, “and the most vulnerable. Practically 95 percent of our natural gas imports come from Russia, and natural gas is a large part of our economy. Unfortunately, our domestic upstream production has been seriously declining, so Hungary’s situation is more sensitive. We are totally landlocked, so we don’t have access to the sea, unlike Poland or the Baltics. Secondly, we don’t have any major transit pipelines. We’re at the end of the pipeline.”

Hungary uses nearly 9 billion cubic meters of gas per year, said Szemerkényi, who before coming to Washington was deeply involved in efforts to diversify Hungarian gas imports while developing alternatives.

“We have two nuclear power plants in Hungary built by the Russians in the ’70s and about to be phased out,” she said. “We are now contracting for two new nuclear plants from Russia. This is a policy-neutral thing and increases our energy sovereignty.”

Meanwhile, Szemerkényi is focusing her efforts on improving Hungary’s image and reassuring officials at the Pentagon, in the White House and on Capitol Hill— an uphill battle, considering the two countries’ recent rocky relations. “Life is so dynamic in Washington, but this is a life I’d been part of for the last 25 years,” she said. “I don’t really have classic introductory meetings, since I know many of the think tank people. That’s why our discussions are so much more concrete and to the point.”

She added: “We may disagree, but we have to be very careful not to destroy a strategic connection between the two countries, which is needed now and will be needed even more five years from now.”

Larry Luxner is news editor of The Washington Diplomat.

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