Hungary’s Fidesz Party Suspended from EPP

Orbán’s anti-semitic rhetoric puts Hungary at risk of full EPP expulsion. Now, Orbán may voluntarily leave the EPP and form a right-wing party alliance with Poland’s PiS Party. What will the EPP decide?

By Szonja Benczik

Retrieved from the Website of the Hungarian Government, press section

The suspension of Hungary’s governing Fidesz Party from the center-right European People’s Party (EPP) has taken a new turn as Hungary’s Prime Minister Viktor Orbán announces the possibility of leaving. In most recent news, the EPP upheld the suspension of the Fidesz Party on 3 Feb, but still remains divided on how to move forward. Despite the EPP’s condemnation, Hungary’s full expulsion from the EPP is unlikely.

Orbán’s poster campaign

In March 2019 the EPP suspended Hungary’s right-wing party over the alleged erosion of democratic norms and values, rule of law concerns and non-compliance with EU policies. However, Orban’s slanderous rhetoric proved to be the final provocation last year that led to 13 EPP members suspending the Hungarian party. When Orbán launched his poster campaign showing insulting photos of European Commission President Jean-Claude Juncker and billionaire philanthropist George Soros, the European Commission retaliated with the party’s suspension.

“You too have a right to know what Brussels is preparing to do,” the posters read. Allegedly, Orbán used these posters to criticize the migration policies of the European Union, claiming EU leaders like Juncker, backed by Soros, want to bring mass migration into Europe. Orbán’s anti-semitic rhetoric is highlighted due to the fact that Soros, a Jewish survivor of the Holocaust in Hungary, is known for defending human rights and funding civil society groups who help migrants. “I can’t do anything about the fact that George Soros is a Hungarian of Jewish origin,” said Orbán.

With 190 EPP votes in favor of suspending the Party, the resulting consequences included Fidesz’s inability to attend meetings, vote or obtain leadership positions. This was especially detrimental for the party as EU elections were right around the corner.

Monitoring Fidesz’s compliance

Orbán claimed the resolution was “voluntary," and Fidesz simply paused its position within the EPP. Joseph Daul, the president of EPP at the time of Fidesz’s suspension, set up a committee consisting of the “Three Wise Men" who were tasked with evaluating the state of democracy in Hungary, monitoring Fidesz’s compliance with EU laws, and giving guidance to Donald Tusk (who became president of the EPP in December) on the expulsion of the party. During the political assembly in Brussels on 3 Feb, Tusk said he is “quite critical” when evaluating the decision to keep Orbán’s party inside. “[There will be] no redefinition of our fundamental values,” the official added.

Retrieved from the EPP press website

Will Fidesz join alliances with Poland’s PiS Party?

The case took a turning point in January when a senior member of Fidesz, Gábor G. Fodor, announced on Hungarian national television that he sees it “unlikely” that Fidesz will stay in the EPP, even though the party represented their will to remain a member. Additionally, Orbán met with Poland’s ruling Law and Justice Party (PiS) on 8 Jan after emerging speculations that Fidesz “planned to leave the EPP”. Both parties had been in conflict with European Commission President Jean-Claude Juncker over how to manage migration, and both have similar political views on issues like media freedom, judicial independence, and rule of law. The two leaders intended to discuss the joint activities of both parties in European politics, but no conclusion was reached as to whether the two parties would join forces.

Consequences of Fidesz’s expulsion

The expulsion of Fidesz would create tension between the parties of the EPP since two large members, the Christian Democratic Union of Germany (CDU) and the Christian Social Union CSU in Bavaria (CSU), expressed their concerns against the decision. Secondly, rather than breaking off and establishing their own party based on their own rules, Fidesz could be better controlled and monitored if they remained in the EPP. Thirdly, the weakening of EPP could lead to the split of the party or could result in the emergence of smaller European parties, which could ultimately develop into a segmented EU. Many center-right officials have expressed concerns about the situation in Hungary but prefer to keep Fidesz in the EPP rather than see the Hungarian party join a rival group.

Photo credit: Christian Wiediger (Unsplash)

“There are certain aspects of what the Hungarian government does that I don’t fully understand,” Latvian Prime Minister Krišjanis Karinš, a member of the EPP, said.

“Right now I’m personally in the view that it’s always best to try and understand the thinking we have in our own member states, to raise issues that are of concern, and to try to resolve them,” the prime minister said.

Based on Orbán’s good relationship with Poland’s ruling Law and Justice Party in the European Conservatives and Reformists (ECR) group, there is a possibility that Fidesz could join forces, making them the second most influential member. Although Fidesz is seen as problematic in one party, it is likely to be appreciated among leaders in another. It is possible that the right decision for Fidesz would be to leave EPP, since keeping the party in suspension could show that the EPP cannot come to a decision on Hungary’s fate within the transnational party.

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Szonja Benczik

Contributing Writer

Szonja from Budapest is an undergraduate student at Webster Vienna Private University where she majors in International Relations and minors in History and Management. Her main areas of interest include Central European studies and environmental issues. She came to Vienna to take advantage of the opportunities the city has to offer for IR students, but is also completely amazed by the architecture and culture of the Austrian capital. She is also involved in reporting on university events and writing about cultural topics for World Dip magazine.

Unaffordable Charity: Mutual Exclusion of Investments and Capital Taxes in Ukraine

By Anna Gorbatyuk

With the dawn of decolonization in Europe from 1950 to 1970, the concept of sovereignty gained a superior position. It has led to a division of states between the ‘rich’ and the ‘poor,’ and has furthered developmental disparities that occur from differences in economic policies due to the will of prospering states, which use less advanced countries as grounds for experimentation. While developing as a “social state” (Piketty, 2014, p. 491) ‘rich’ countries have imposed a higher level of national income consumed by taxes; hence, developing countries were in an inferior position and became an experimenting tool. They were forced to decrease their public sector and evade a developing tax system.

The idea of the social state proposes a vast variety of expenses in the form of taxes for education, medical treatment, and military purposes. With the constant progress of a state, the need to advance social aspects was paramount: increase spending on education, medical technologies, etc. To keep up with economic innovations, stable proportional tax [1] may be insufficient, so governments can impose a progressive income tax [2]. This is the main tool of governments to ensure the constant development of the social state, which justifies ongoing tax increases and facilitates further development and modernization. This article aims to examine constellations between taxes and investments in the Ukraine – a highly corrupt country – in the framework of this tax system (Kuzio, 1999, p. 50).

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[1]Proportional tax: the rate is the same for everyone (“flat tax”) [2]Progressive income tax: the rate is higher for some than for others (depending on income)

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In the provided example, one can assume that ‘poor’ countries are dependent on either a capital inflow from the ‘rich’ or on the investments from a private elite sector. Such interrelated dependency creates a vicious cycle of capital stagnation as the influx of incoming funds is highly dependent on the investments made, which in turn relies on benefit-incentives of the elite. To examine this issue, we will take a closer look on the social construction of developing countries, namely Ukraine with relation to investment incentives.

A Ukrainian businessman and philanthropist, who would like to remain anonymous, experienced Ukraine’s corrupt and insufficient tax system after donating €30,000 to a rural-area orphanage in central Ukraine. During our interview we discussed charity investments and their relation to political incentives. Namely, the donator provided the orphanage with direct capital as well as domestic and medical facilities. Though ultimately the donation was considered direct income and the orphanage was made to pay a 20 percent tax by the Ukrainian government. As the orphanage started using new appliances like irons and washing machines the rates of electricity expenses increased, causing a greater need for funds, which could not be attained by the orphanage.

"How could a country prosper and experience a constant inflow of investments if the conditions and consequences of those investments would ward off all of the incentives to contribute?” (Anonymous, 2020). This case illustrates not only the issues of taxation and investment outcomes on charity, but also the taxation pitfalls that act as incentive–killers, blocking further development.

The phenomenon of an incentive-killer tax occurs out of the corrupt and self-interested motivation of political elites, who want to benefit from each and every investment, even those for charity. This is not a social tax that supports the ongoing development of the country, but rather a profit-driven decision of policy-makers. The imposed tax is a proportional tax on capital (as there are no progressive taxes in the vast majority of developing countries), which stand on the principle of flat percentage of payment, despite the type of investment. Construction of the taxation system leads to a vicious cycle of discouragement, which is a threat to developing countries, as investment inflows are one of the more crucial principles of prosperous discourse of a country.

“Currently, the private sector does not have any incentives to contribute to the poor, the sick, orphans or the disabled. The day you open a capital – you are under pressure.”

The need to reestablish a tax system and further the conditions of its implementation in a vast majority of developing countries has been articulated by a Ukrainian dissident and political prisoner, Semen Hlusman. “Only when the economy will be grounded on legal principles, businessmen will be able to pursue their social policies, be involved in charity and simultaneously feel that they will benefit. The answer relies not in concise and moral dogmas; we need a new tax policy,” said Hlusman. “Currently, the private sector does not have any incentives to contribute to the poor, the sick, orphans or the disabled. The day you open a capital – you are under pressure” (Semen Hlusman, 2007). According to Thomas Piketty, the author of “Capital in the Twenty-First Century,” there is only one solution for the reconstruction of the corrupt tax system – “a progressive global tax on capital, coupled with a very high level of international financial transparency” (Piketty, 2014, p. 515).

Taxes are determinant tools of the successful duration of the overall economy in a country. A legitimate economy will ensure smooth inflow procedures of capital and create conducive conditions for investors to make donations. Conversely, a state tax policy, which is based on self-interested governmental intentions will obstruct the inflow of investments to the country. Thus, capital tax based on illegal policy-making procedure and inflows of investments would be mutually exclusive, whereas unambiguous tax institutions and transparent economy would facilitate a tributary of investments.

References:

1. Andrushenko, N. (2007, August 3): I am happy that I didn’t enter the major political field. ZN, UA. https://zn.ua/SOCIETY/semen_gluzman_ya_rad,_chto_ne_poshel_v_bolshuyu_politiku_eto_daet_mne_vozmozhnost_delat_malye_shagi.html

2. Anonymous, A. (2020, January). Personal conversation.

3. Piketty, T. (2014). Capital in the twenty-first century. Cambridge, MA: Harvard University Press.

Kuzio, T. (1999). Contemporary Ukraine: dynamics of post-Soviet transformation. Boulder, CO: NetLibrary, Inc.

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Anna Gorbatyuk

Contributing Writer

Anna is an undergraduate International Relations student at Webster University with minors in Economics and Philosophy. Originally from Ukraine, she came to Vienna to continue her academic studies and professional development in the public policy field. Anna has a wide array of interests ranging from humanitarian aid affairs to global economic disparities. Currently she is developing an online platform with a global perspective for Webster students to facilitate academic exchange.

The EU as a Segmented Political Order

Webster IR Professor, Dr. Jozef Bátora, and colleagues present new book: “Towards a Segmented European Political Order: The European Union’s Post-Crisis Conundrum.”

By Bridget Carter

Photo by Aika Maeda

Last week WVPU International Relations professor Dr. Jozef Bátora and co-editor John Erik Fossum presented their new book “Towards a Segmented European Political Order: The European Union’s Post-Crisis Conundrum” published by Routledge. Other chapter contributors included Bent Sofus Tranøy and Espen D.H. Olsen who also presented their research on segmentation and the EU’s post-crisis dilemma.

Photo by Aika Maeda

The EU has become increasingly differentiated with polarizing views on how to solve past, present, and emerging crises. As frequently discussed in both academic and political circles, the future development of the EU remains unclear. This book argues that post-crises EU is becoming more of a segmented political order with deeply rooted biases and constraints in policy making. The editors show in ideational and structural terms how EU member states constrain and condition EU action, and how this segmented political order manifests itself in the institutional and constitutional make-up of the EU.

Segments in the EU – similar to ‘iron triangles’ we know from political science literature on US policy making from authors such as Allison and Zelikow – represent established patterns of linking participants in policy-making ranging from EU institutions and governments in member states to parliamentary bodies, NGOs, and advocacy groups (see Christensen and Egeberg, 1979). They systematically “organize in”certain solutions to policy problems and “organize out”others. This increases efficacy in implementation of policies but, at the same time, often decreases democratic legitimacy of policy-making.

Segmentation has been growing in the EU as a reaction to crises. So, what exactly encapsulates the EU crisis? Crucial issues include the migration “crisis” beginning in 2015 when high numbers of migrants arrived in Europe. The influx of migration ultimately attracted strong resistance from some European countries (e.g. Hungary), while other countries developed pragmatic and more open approaches to managing the crisis (e.g. Germany, Austria and Sweden). Polarizing views on how to manage the issue made problem-solving a greater challenge.

Secondly, the European debt crisis (i.e. the Eurozone Crisis) that unfolded due to the U.S. financial crash in 2008 haltingly slowed economic growth and hit financial markets world-wide. Since then, EU countries like Greece, Ireland, Italy, Portugal, and Spain have faced pressures on their public finances and banking sectors, thus creating potentially devastating economic ripple effects throughout the region. Sir Mervyn King, head of the Bank of England, alarmingly said the quandary was “the most serious financial crisis at least since the 1930s, if not ever.”

There are various forms of differentiation in response to EU crises, take Brexit for example. There are also various forms of closure in EU policy making – so, as posed by Bátora, “How come some solutions are adopted and others are not, and how do we capture this?” Co-editor Dr. Fossum stepped in to answer this complex question: “We took an inductive approach and combined conceptual methods with analyses,” he said. “We needed a term to capture increasingly differentiated and diverse EU crises responses, so we came up with a ‘segmented political order’.”

Photo by Aika Maeda

Segmentation, as defined by Dr. Bátora, is a stable pattern of linking participants who share common conceptions of problems, solutions, and choice opportunities in which governments, NGOs, private enterprises and political activists are interconnected. Dr. Fossum then introduced two forms of segmental logic: internal market rationality and securitization. Neo-liberal (or ordo-liberal) austerity policy, in relation to internal market rationality, crowds out all other solutions (like those imposed on Greece). Whereas, securitization is the propensity to think of issues and concerns as a matter of security (like Prime Minister Orbán’s anti-migration rhetoric framing migration as a “battlefield”).

Photo by Aika Maeda

As problems develop, new structures and institutional spheres are tailor-made to tackle these dire dilemmas. “Structural mutations of the EU are forming as a reaction to the EU crisis,” noted Bátora. Hybrid interstitial organizations like the European Border and Coast Guard Agency (Frontex) and the European Union External Action Service are prime examples. But one may find it tricky to concisely define what exactly these hybrid organizations do, much less what they are. To clarify, Bátora defines these interstitial organizations as those emerging in interstices between various organizational fields; recombining physical, informational, financial, legal, and legitimacy resources stemming from organizations belonging to these different organizational fields.

Due to structural and political constraints, it can be challenging to adequately and effectively implement the goals of these hybrid organizations. As a response, hybrid structures like Frontex and the European Stability Mechanism (ESM) are formed to meet this challenge. Though these hybrid structures do not come without faults: unclear and overlapping responsibilities within these organizations make coordinated efforts also a challenge. At the same time, these interstitial organizations become carriers of segments – they provide a platform for coordinated action capability of EU member states but they also encapsulate particular ways of solving crises – "organizing in" certain solutions and "organizing out" others.

While presenting his research titled “What kind of crisis and how to deal with it? The segmented border logic of the European Migration Crisis,” Espen D.H. Olsen stated that we must look at this issue from two angles: structure and agency. “Whose crisis are we looking at?” Olsen rhetorically asked. “The state’s, citizen’s or migrant’s?” These are crucial questions to ask when considering the decision-making process.

As the evidence suggests, the EU as a multi-structured entity is a complex phenomenon that calls for various theoretical approaches for better understanding its problem-solving mechanisms. Bátora and Fossum’s book, “Towards a Segmented European Political Order: The European Union’s Post-Crisis Conundrum,” provides material for both academics and professionals to better grasp the inner workings of the EU as a segmented political order.

Photo by Aika Maeda

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Bridget Carter

Co-Founder & Editor in Chief

Co-founder of World Dip magazine, Bridget is an International Relations graduate student at Webster Vienna Private University where her areas of focus include gender dimensions of post-conflict development. She was born in Texas, grew up in California, lived in Bangkok, and now calls Vienna home. Her background in the field of forensic science and journalistic writing give her a unique perspective from which to approach various topics of international relations. Her written work has been featured in Austin Monthly magazine, The Chronicle, The Ten-Twenty, and Metropole magazine.

Aika Maeda

Photographer

Aika is a photographer for World Dip Magazine and an undergraduate student at Webster Vienna Private University. She is from Osaka, Japan and came to Vienna to study Psychology. She does portrait and street photography as her hobby but also enjoys taking photos of university events.