Author: Zoltán Kész

FC TAXPAYER: HOW ORBÁN TURNED FOOTBALL INTO HIS PLAYGROUND

The Hungarian Prime Minister has made football one of his flagship projects since the very start of his reign, pumping billions of taxpayers’ money (and indirectly EU funds) into Hungarian clubs and stadiums. It may come as a surprise to many, but in Hungary, the majority of the electorate really believes that his involvement in football is so direct and important that his personal intervention was the deciding factor in any club’s future. But what does this really mean? Is Orbán’s football policy about developing Hungarian sports or consolidating power and winning over fans? Is the quality of Hungarian club football good for consumers, or is it not even about satisfying them?

The funding scheme

Orbán’s government has implemented an extensive financial support system for football clubs through multiple channels. One is corporate tax breaks, through which companies can redirect a portion of their corporate tax to sports clubs. This has resulted in billions of forints flowing into club infrastructure, youth academies, and salaries. The primary beneficiaries are clubs owned by the government’s oligarchs and friends. It is not surprising at all that the most money has flowed to the team of the Prime Minister’s home village, Felcsút, with a population of only 1800, boasting a nice stadium with literally no fans, but at the moment, the team is on its way to its first championship in the history of Hungarian football. The government has heavily subsidized this stadium, although the attendance figures do not justify such investment. Many similar stadiums struggle to fill their seats, leading to criticism that they serve as vanity projects rather than practical sporting infrastructure.

It must also be noted that key Hungarian clubs are now run by “businessmen” with close ties to Orbán. Lőrinc Mészáros, Orbán’s childhood friend and one of Hungary’s wealthiest men, owns Puskás Akadémia FC. István Garancsi, another government-linked oligarch, controls MOL Fehérvár FC. At present, all 12 Division One teams are owned by such oligarchs. This ensures that football clubs remain politically aligned and that funding flows where it is most beneficial for Orbán’s political network rather than where it is needed for true sporting success.

Another flagship project related to football was the creation of football academies. Although billions have poured into these youth academies, Hungary has failed to produce world-class players. The Puskás Akadémia, established as Orbán’s football project, receives massive state funding but has contributed little to the national team or top European leagues. Meanwhile, Hungary continues to rely on foreign-born or naturalized players and those who never benefited from the academy system and deliberately avoided it. This raises serious questions about the efficiency and purpose of these academies: they are less about developing players than funneling money into politically connected hands. 

Where are the results?

On the surface, Hungarian football has gone through massive investments. After decades of disappointment, the Hungarian national team has shown moments of promise, qualifying for the last two European Championships. Clubs like Ferencváros have made regular appearances in European competitions. However, there are some serious concerns about these successes. Despite the billions spent, Hungarian club teams are still uncompetitive in top European leagues. Unlike in countries where private investment and strong domestic leagues drive success, Hungary’s reliance on state money has not produced top-tier teams. Another major issue, as seen above with the team “saved by Orban,” is that many clubs would struggle without continued government backing. 

If state funds were withdrawn, clubs heavily reliant on political connections could collapse under financial mismanagement. This was, in fact, the case with the team mentioned above, as it enjoyed the goodwill of the political class as long as the owner (who was the son-in-law of the prominent oligarch) was still part of the family. After the divorce, his company received no state contracts, and his team started to feel hardships.

As we see, Orban’s focus on football serves a dual purpose—while it undoubtedly generates minor sporting results, it also fosters loyalty among voters. Many Hungarians, especially in smaller cities, believe Orbán saved their beloved teams from financial ruin.

The goal? Not goals in the opponent’s net necessarily

Is the objective of making Hungary a serious footballing nation, or is it about Orbán using the sport as a populist tool? The numbers show that Hungary’s football infrastructure has improved, but its clubs and national team still struggle to compete with Europe’s best. If the ultimate goal was football excellence, then the strategy has not fully been delivered. If the goal was to garner political influence, it has worked exactly as intended.

Originally published here

When price caps become political weapons

The Minister for Economy “has been given a mandate to introduce official price caps for certain products, and if this is not enough, we are even ready to limit profits.” I had to read it three times and even fact-checked it to make sure that this quote does not come from Stalin or Maduro, and even make sure this politician is not the leader of a banana republic or a communist country. Then it struck me that this self-proclaimed conservative politician comes from the European Union and continuously talks about lowering taxes and economic miracles in the country, which the EU unjustly punishes.

Let’s focus on the reality now. I have written many times about why price controls are bad for the consumer and are used purely for political reasons. Consumers will face shortages, black markets can flourish, and the livelihoods of many citizens will be put at stake for short-term political gains. The prime minister of this country portrays himself as if he had a magic wand to make inflation disappear, to pursue his fight against evil multinational companies and grocery stores that only care about higher prices. He also said in a recent interview: “We cannot let grocery stores rob the population.”

You might have guessed already that the country depicted here has the highest inflation rate in the European Union, at 17% in 2023. And the politician in play is the longest-serving PM in the EU. Viktor Orban’s Hungary is, however, facing quite a lot of economic challenges. In the land of low taxes, the population faces the highest VAT rate in the world, at 27%. However, this 27 is 31.5% as stores are levied an extra 4.5% “retail special tax.” This paradox of high consumption taxes in a supposedly low-tax economy significantly burdens consumers. As wages struggle to keep pace with soaring prices, the cost of living crisis deepens, eroding purchasing power and economic stability.

I have argued that Orban has nothing to do with conservative economic policies. Unfortunately, elections will be held in Hungary in a year’s time. We finally have a viable alternative in a new party and a charismatic leader, Péter Magyar, who actually comes from Orbán’s Fidesz party. Now that Orbán has run out of other people’s money, namely, the European Union’s (which froze most of the funds to Hungary in 2022), he has to find ways to appease the electorate.

Moreover, he has to find enemies again to blame for the lousy performance of the Hungarian economy. His main narrative is that Hungary is doing poorly due to the war in Ukraine, the evil politicians in Brussels who unjustly punish his country, and the EU sanctions on Russia. However, these are enemies the average voter cannot feel directly.  Creating enemies at home is his strategy for the campaign, as he knows very well that his electorate resonates with short-term goals, and price caps worked well in the last campaign, too.

Socialist nostalgia

Orbán also talked about limiting profits. You may wonder what that means, but it is easy to imagine it in a country where the majority of the population still has a nostalgia for the socialist regime before 1990. He knows perfectly well that the rhetoric of being anti-capitalist and punishing those who dare make profits is a message that can work.

Why? Don’t people feel the effects of the high taxes, high inflation, and shortages in their everyday lives? Aren’t campaigns not about the economy? Well, when the government has someone else to blame for your mistakes and spends billions of government propaganda to make people believe that the conspiracy of grocery stores, Brussels, and Zelensky are driving the price of their bread and milk, the way is cleared for a bumpy but seemingly successful campaign. By positioning multinational companies and grocery stores as villains, the government crafts a populist narrative that resonates with voters who feel economically marginalized. This strategic scapegoating deflects blame from policy failures and reinforces Orbán’s image as a defender of ‘ordinary people’ against foreign interests and economic elites.

Nevertheless, in the end, Hungarians will have to realize that the illusion of economic control may buy political time, but the price will inevitably be paid by the consumers. As price caps and profit limits distort market dynamics, the economy moves closer to a breaking point. And when that happens, even the best propaganda machinery won’t justify the government’s actions. 

Originally published here

Az EU-s pénzek csak tönkreteszik a versenyt és a vállalkozói szellemet Magyarországon

Egy karácsony előtti nyüzsgő szombat este a belvárosi éttermekben élénk csevegést és poharak csörömpölését várnánk. És mégis: egy ideális helyen levő létesítmény kísértetiesen üres volt. Amikor megosztottam ezt a furcsaságot egy barátommal, aki maga is étterem-tulajdonos, éles megjegyzést tett: “Ha én is ennyit kaptam volna az uniós támogatásokból, engem is zavarnának a vendégek”.

Ez az egyszerű meglátás sokat elmond a magyarországi üzleti élet helyzetéről. A növekedés és fejlődés elősegítésére szánt uniós források egy olyan rendszert hoztak létre, amely az innováció helyett a kapcsolatokat, a a szolgáltatás helyett az állami támogatásokat, a vevői elégedettség helyett pedig a támogatási kérelmeket jutalmazza.

A magyar gazdaság olyannyira eltorzult, hogy az ügyfelekért folytatott verseny másodlagos az uniós pénzekért folytatott versenyhez képest, amelyek mostanra szintén szűkössé váltak.

Ez a torzulás messze túlmutat egyetlen üres étteremnél. Egy olyan rendszer jelképe, amely megfojtja a vállalkozói kedvet, aláássa a tisztességes versenyt, és elűzi Magyarország legtehetségesebb újítóit az országból.

Az uniós támogatások magyarországi elosztása minden, csak nem átlátható. Az innováció és a gazdasági fejlődés előmozdítása helyett a kormány ezeket a pénzeket egy új gazdasági elit kiépítésére használta fel – a politikai kapcsolatokkal rendelkező üzletemberek kasztját, amelyet gyakran “NER-elitnek” neveznek. A valóságban ennek a kormánypárti, cinkos elitnek a tagjai azok, akik az uniós pénzek haszonélvezői, mivel az Orbán-kormány a pénzeket oligarchái és politikai ügyfelei között osztotta szét.

Ezek a vállalkozások, amelyek gyakran a kormánypárt közeli szövetségesei tulajdonában vagy ellenőrzése alatt állnak, nem piaci potenciáljuk vagy innovatív ötleteik, hanem a rendszerhez való hűségük miatt kapnak támogatást. Sikerüket nem az alapján mérik, hogy hány ügyfelet vonzanak, vagy hogy mennyi értéket teremtenek, hanem azon, hogy képesek-e állami támogatásokat szerezni.

Az eredmény egy olyan üzleti környezet, ahol a kapcsolatok felülírják a szakértelmet, és a klientúra kiszorítja a valódi vállalkozói szellemet. Ezek a politikailag támogatott vállalkozások a piaci erőkre való tekintet nélkül működnek, és olyan torzulásokat okoznak, amelyek az egész gazdaságban éreztetik hatásukat.

How EU money is destroying competition and entrepreneurship in Hungary

Hungary’s economy is at a crossroads. The current system of crony capitalism stifles innovation, discourages entrepreneurship, and drives away the very people who could build a brighter future.

On a bustling Saturday evening right before Christmas, one might expect restaurants in the city center to be filled with lively chatter and the clinking of glasses. Yet, there it was: an ideally located establishment, eerily empty. When I shared this oddity with a friend who owns a restaurant himself, his remark was cutting: “If I had received so much from EU grants, I would also be disturbed by customers.”

This simple observation speaks volumes about the state of business in Hungary. EU funds, intended to foster growth and development, have instead created a system that rewards connections over innovation, subsidies over service, and grant applications over customer satisfaction. Hungary’s economy has become distorted to the point where the competition for customers is secondary to the competition for EU money, which is also becoming scarce now.

This distortion goes far beyond a single empty restaurant. It’s emblematic of a system that stifles entrepreneurship, undermines fair competition, and drives Hungary’s most talented innovators out of the country.

A system designed for the politically connected

The distribution of EU grants in Hungary is anything but transparent. Instead of fostering innovation and economic development, the government has used these funds to build a new economic elite—a caste of politically connected businessmen, often called the “NER elite” after Fidesz’s National Cooperation System (Nemzeti Együttműködés Rendszere). In reality, the members of this pro-government, crony elite are the ones benefiting from the EU funds since the Orban government has used the funds to redistribute it to its oligarchs and political clients.

These businesses, often owned or controlled by close allies of the ruling party, receive grants not because of their market potential or innovative ideas but because of their loyalty to the regime. Their success is measured not by how many customers they attract or how much value they create but by their ability to secure subsidies.

The result is a business environment where connections trump competence, and cronyism displaces genuine entrepreneurship. These politically backed businesses operate with little regard for market forces, creating distortions that ripple across the economy.

The death of real competition

The empty restaurant is a perfect metaphor for the broader economic reality in Hungary. When distributed based on political favoritism, EU grants destroy the natural dynamic of competition. Businesses flush with grant money can afford prime locations, lavish marketing campaigns, and inflated salaries without needing to attract customers or deliver quality.

Meanwhile, genuine entrepreneurs—those who build businesses on creativity, hard work, and customer satisfaction—cannot compete. Their rivals have an unfair advantage, with subsidies insulating them from the very market forces that should drive innovation and excellence.

Instead of fostering a vibrant entrepreneurial ecosystem, Hungary’s economy has become a battlefield where businesses don’t compete for customers but for EU grants. Success hinges on having the best grant writers or the strongest political connections, not the best products or services.

Why perfect your menu or train your staff when your financial success is already guaranteed by a grant? This mindset has seeped into every corner of the economy, hollowing out the entrepreneurial spirit that should be the backbone of the country’s growth.

The exodus of entrepreneurs

For many Hungarian entrepreneurs, the system is not just unfair—it’s hopeless. Faced with a rigged game, they are voting with their feet, leaving Hungary in search of fairer opportunities abroad. Over 800,000 Hungarians have emigrated in the past decade, among them some of the country’s most talented businesspeople and innovators.

These individuals are not simply seeking higher wages or better living conditions. They are looking for an environment where their success is determined by their ideas, efforts, and market demand—not by their ability to navigate a corrupt and politically controlled system.

The loss of these entrepreneurs is a devastating blow to Hungary’s economy. Innovation dries up, businesses close, and the country increasingly relies on external funding rather than internal dynamism.

A distorted labor market

The distortions caused by EU grants extend to the labor market. Subsidized businesses can afford to pay inflated salaries or hire more workers than they need, drawing talent away from genuine entrepreneurs who cannot match these artificial wages.

This creates a labor market where the most lucrative jobs are not in the most innovative or productive businesses but in politically connected enterprises. Employees are often hired not for their skills or experience but for their loyalty to the system that keeps these businesses afloat. This status quo stifles meritocracy and discourages workers from pursuing careers in genuinely innovative fields.

The way forward

Hungary’s economy is at a crossroads. The current system of crony capitalism, fueled by EU funds, is unsustainable. It stifles innovation, discourages entrepreneurship, and drives away the very people who could build a brighter future.

To reverse this trend, several key changes are necessary. Key elements include transparency and accountability. It means that EU funds must be distributed based on clear, fair criteria that reward innovation and public benefit, not political loyalty. The same goes for access. Small businesses and startups must have access to funding and resources without needing political connections. However, it cannot be done once the government controls all the existing channels. It must be decentralized to reduce the government’s control over grant distribution, which can help eliminate cronyism and favoritism.

For Hungary to thrive, its economy must be built on people’s creativity, hard work, and resilience—not on grants and political favors. The fable of the empty restaurant serves as a stark warning: when businesses stop competing for consumers and start competing for subsidies, the entire system collapses.

Hungary’s real potential lies not in its subsidies but in its people. The question is whether the country will seize this potential—or continue down the path of stagnation and decline.

Originally published here

BANNING AIRBNB IN ONE BUDAPEST DISTRICT SETS A DANGEROUS NATIONAL PRECEDENT FOR HUNGARY

While those favoring the ban argue that it will reduce housing shortages and rent inflation, this approach overlooks the more significant systemic problems driving the housing crisis. The rising cost of living and limited housing projects are far more influential than short-term rentals in shaping the housing market. Even without Airbnb, housing affordability would remain a critical issue due to the scarcity of new housing and broader economic pressures.

Furthermore, the local ban raises concerns about a possible national-level restriction on short-term rentals, as a leading Fidesz politician hinted during the weekend. If this decision sets a precedent, a blanket ban on platforms like Airbnb could have unintended consequences. It may hinder tourism, which many local businesses and workers depend on, and it could affect the livelihood of those who supplement their income by renting out properties. Bans may also shift the housing market without solving the key issue: the supply of affordable homes.

International examples, such as in Barcelona, Paris, and New York City, demonstrate that Airbnb bans or severe restrictions have not resolved housing crises. In Barcelona, while strict regulations have reduced the number of available short-term rentals, they have also increased illegal listings, making enforcement challenging. Paris has seen a similar rise in non-compliant rentals, while in New York City, stringent rules have displaced Airbnb to the black market, complicating oversight and leaving both hosts and guests in legal grey areas. Moreover, consumers are now facing surging hotel room prices, as the supply of accommodation in cities banning short-term rents is still low, but the demand side is still relatively high. As for rent prices, they have still increased by 3.4%, even with rent control and the ban on short-term rentals

Rather than treating Airbnb as a scapegoat, policymakers need to focus on meaningful reforms such as increasing the construction of extra housing, which makes for actual affordability, and providing rent subsidies. Addressing these core problems would have a far more lasting impact than banning short-term rentals, which serves as little more than a temporary patch on a much larger problem.

Considering these concerns, the decision in Terézváros appears more symbolic than substantive. It fails to engage the broader population in addressing the real challenges of the housing crisis while opening the door to overregulation at a national level that could harm the wider economy and Hungarian consumers. 

Originally published here

Wagner STILL waging secret war as mercenaries earn £8m-a-month to torture & massacre civilians for brutal Mali warlords

RUSSIA’S Wagner mercenaries are still waging a secret war earning £8million a month to reign terror for brutal warlords in Mali. 

It’s a standard play for the mercenary army that terrorises, maims and murders on behalf of the Russian state in exchange for blood gold to feed Putin’s war machine, experts told The Sun.

The Wagner Group, which for years was ruled by oligarch and warlord Yevgeny Prigozhin until he met his fiery end in August, has spent decades secretly digging their claws into Africa.

Their haunting black insignia has been seen stomping all over democracy and stirring proxy wars across Central and West Africa.

Mostly recently, the poverty-stricken and failed state of Mali has become a zombie host for the Russian state’s spiky tentacles.

And dirty business is booming.

In late 2021, the military junta who took power in a coup invited Wagner to bring in its weapons and hardened fighters to crush the Islamic State terror group.

In reality, they booted out the last of the UN peacekeeping force and France’s troops and propped up Mali’s corrupt military regime – leaving a succession of atrocities in their dusty wake.

US intelligence claims this so-called “security” costs Mali £8million per month.

The de-facto army offers a “broad portfolio” of “violence, atrocities and human rights violations,” according to Professor Salvador Sánchez Tapi, a conflict analysis expert at the University of Navarra.

Read the full text here

POSSIBLE CHANGE MEANS RELIEF IN THE ESSENTIAL OIL BUSINESS

Central European Affairs has recently dealt extensively with the EU overregulating essential oils. We had a podcast here at CEA Talks with the expert on this proposal, Dr. Emil Panzaru, who works at the Consumer Choice Center as Research Manager and also ran an op-ed with our magazine in which he explained the problems of the proposed legislation. Now, we are going after the story, and we want to see what happens on the EU level when there is a push from experts, stakeholders, and civil society to cancel the proposal or change it if possible. It is fascinating looking at how the “Brussels bureaucracy” operates when we experience every day that the Hungarian government would never give in to anything coming from other actors but its politicians.

CEA: Dr. Panzaru, when we last talked, you enthusiastically outlined why the proposal by the European Union Chemical Agency is terrible for the industry of essential oils and, in the long run, bad for the consumer. Can you update us on whether there are any developments regarding this issue?

Emil Panzaru: First, I would like to reiterate what I told you last time. Placing essential oils with other harmful substances is a big mistake. When we see such an example of overregulation, we have to raise our voices, especially when we know those who will be hurt the most are mainly SMEs, small farmers, and, last but not least, consumers.

CEA: Would anyone benefit from the changes to chemical regulations outlined initially by the European Chemicals Agency?

EP: Regulations change the balance of costs and benefits firms must make. As such, there are always benefactors and losers of every regulation; in this case, those who need not comply, for example, outside competitors like the Chinese, would overtake their European competitors and take over the market with their essential oils products.

CEA: Do you see any positive change in the run-up to the decision-making?

EP: Definitely. Just over a week ago, a new amendment was put forward, which suggests that water or stem-based extracts like essential oils are safe as they are organic botanic products. The proposal also recommends a new category for these substances apart from existing legislation on biocides and natural pesticide. 

CEA: Can the industry and consumers now be relieved that these products will continue to be produced as before?

EP: Not yet. This amendment still needs to be voted on and accepted. But I must say that this amendment is going in the right direction. Probably, some decision-makers finally realized that removing these products from the shelves just because one in a hundred substances might prove dangerous under laboratory conditions was not feasible and would have been downright economically harmful to European businesses and consumers. Based on the initial logic, anything can be labeled harmful. 

CEA: Speaking of which, would the original proposal bring about extra costs for producers?

EP: It surely would. This is a solid argument as well. When you look at the extra procurement costs that it would entail in an economic environment of high inflation, which you, as a Hungary-based outlet, must understand much better than in some other parts of Europe, you will see that a lot of producers would have to close operations or increase prices, which would then be unable to compete with producers who are not affected by the original proposal and further drive the price momentum of inflation. Due to this unnecessary supply problem, consumers will have fewer items to choose from and be able to afford fewer of them in the first place.

CEA: Following this note, could you share more insights into how this proposal affected countries that are the leading producers and what this amendment means for their industries?

EP: Before the amendment, these regulations were causing significant concerns for countries heavily reliant on essential oil production. For instance, Bulgaria is the world’s leading rose oil producer, and the threat of their business being wiped out by irresponsible regulations was a real threat. Italy, France, and Estonia also faced the potential loss of substantial export revenue due to the overregulation. Amendment 32 provides much-needed relief for these countries, ensuring their essential oil industries can thrive without unnecessary hurdles and economic losses.

CEA: What are your expectations for the EU’s future of essential oil regulations?

EP: Recognizing essential oils as organic and safe in Amendment 32 is a step in the right direction, but there’s still work to be done in promoting sensible, risk-based assessments in regulatory processes. My expectation for the future is that policymakers and regulatory agencies will employ a risk-based (rather than hazard-based approach) and continue to listen to scientific evidence. That means prioritizing common sense in their decision-making and ensuring that essential oils and other natural substances are regulated in a fair and balanced manner to the benefit of both consumers and industries.

Viktor Orban’s Tucker Carlson interview shows why he doesn’t deserve GOP praise

Hungarian Prime Minister Viktor Orban gave an interview last week to Tucker Carlson , who is a returning guest in Hungary. (Carlson’s father is the director of a Washington lobbying firm Hungary has contracted to represent its interests.) Orban’s interview with Carlson aimed to prove to Republicans that he is a sound politician who offers excellent solutions to the conservative crowd. However, the interview proved he is an opportunist who takes every chance to bash the United States, even if that means repeating Russian propaganda.

While the Hungarian premier once again offered his unconditional support for former President Donald Trump, he also made statements that showed he is not the conservative leader some people claim him to be.

During his time with the former Fox News star, Orban claimed that the notion Ukraine could defeat Russia is a “lie” because the Russians are “far more numerous” and added that Ukraine would never be a NATO member. According to him, Russia will never give up its strategic aims in Ukraine, so the strategy of supporting Kyiv is a “bad one.” Sen. Lindsey Graham (R-SC) clearly did not get the memo: He said in Kyiv on Aug. 23 that it cost the U.S. 3% of its annual defense budget to “destroy half of the Russian army.”

The Hungarian leader also noted that he warned the U.S. at every NATO summit that sending a single NATO soldier to Ukraine would start World War III. Still, the pompous Americans never listen to him. This is a clear falsification: President Joe Biden was obviously not sending U.S. troops to Ukraine to take part in the conflict when it began on Feb. 24, 2022. 

These narratives spread by the Hungarian prime minister and the ruling Fidesz party harm not only the Democratic Party’s image in Hungary but that of the entirety of the U.S., which Fidesz uses to turn the Hungarian population against one of its key allies. Average Hungarians will not differentiate between Biden’s and Trump’s U.S. They will only see the U.S. negatively for allegedly being “responsible” for the war in Ukraine, which, as they are told, is what led to the economic hardship they are experiencing. And no sensible Republican can be happy about an allied head of government spreading disinformation taken straight out of Russian propagandaoutlets.

The Hungarian prime minister added that Trump’s presidency would quickly end the war if Trump closed the money flow to Ukraine. And while Trump and  some other Republicans have toyed with the idea, others, such as Senate Minority Leader Mitch McConnell (R-KY), a strong proponent for aid, were evidently not notified of this “easy” solution to bring peace. The Hungarian government has never mentioned the actual easiest path to peace: immediately withdrawing all Russian forces from Ukrainian territories. It is very curious that the Hungarian leadership, as the self-appointed voices of peace, would make such an omission. 

The prime minister claims that all the analysis of the Ukraine-Russia war is based on his excellent knowledge of Russia, which the Americans do not possess. This should also be scrutinized: In 2008, Orban, then in opposition, said that Russia’s attack in Georgia was “military aggression,” adding that a pro-Russia policy did not serve Hungarian interests. In the same year, current Hungarian Foreign Affairs Minister Peter Szijjarto lashed out against Russian actions in Georgia during a protest in front of the Russian Embassy, adding that the Russians “handled” the invasion of Georgia the same way they did Hungary in 1956. 

Since that day, Russian President Vladimir Putin has awarded Szijjarto the Order of Friendship, and the Hungarian Foreign Ministry could only offer a feeble response to a state-mandated Russian history book describing Hungary’s 1956 revolution as a “fascist” one. So, if the prime minister and the Hungarian foreign minister understood Russia’s methods in 2008 but now think the exact opposite, Orban and Fidesz’s knowledge of Russia can be questioned. 

It is not, in fact, this excellent understanding that directs Orban’s Russia policy but mere political opportunism. Hungary, as Szijjarto correctly pointed out in 2008, knows precisely what Russian occupation entails, and its leaders are ignoring Russia’s invasion of Ukraine regardless, out of simple political calculations.

Finally, the claims that the Biden administration supported the Hungarian opposition during the 2022 general election must be addressed. First, there is, to this day, no solid evidence that any American institution was funding the Hungarian opposition with “a huge sum” to defeat Fidesz.

However, the interview never mentioned that a Hungarian semistate foundation, the Center for Fundamental Rights, was granted about a million euros to organize an “international conference,” implying the CPAC held in Budapest in May 2022. These funds came from Hungarian taxpayers. It was also not mentioned that U.S. conservatives such as Rod Dreher are being paid by organizations the Hungarian government has invested billions in to build a conservative network, improving the image of Fidesz globally. The source of the “investments”? The Hungarian taxpayer, whose net median salary in February was HUF 295,600, or about $846.

Besides his leftist economic policies , Orban should not be seen as a role model for Republicans because of his fundamental misunderstanding or deliberate denial of Western interests, repetition of Russian propaganda narratives that affect how Hungarians view the U.S., and use of Hungarian taxpayers’ money to restore the image of his government globally rather than to improve the economy.

Originally published here

New EU rules on essential oils will hurt honest businesses and consumers

For many people, the European Union and its institutions have always meant overregulation and bureaucracy. Their beliefs are fed from time to time by specific rulings or proposals. This time it is the European Union’s Chemical Agency (ECHA) that has set sight on essential oils as substances needing strict control. You are most likely using essential oils without knowing it and with no harm done. Hundreds of such water or steam-distilled extracts make it into insect repellents,perfumes, cosmetics, and other toiletries like shampoos in small doses that havepassed skin and allergy testing. But the ECHA is not planning to consult their safety record and actual levels of exposure (what, in public policy speak, one would call ‘risk-based thinking’). Instead, it will amend CLP (Classification, Labelling, and Packaging ) and REACH rules to mark essential oils as hazardous complex chemicals of more than one constituent substance. Suppose one molecule in the mix could be characterized as a threat under isolated laboratory conditions or deduced via statistical reasoning. In that case, policymakers can label these natural oils dangerous or ban their usage altogether.

Legitimate producers and European consumers alike have no reason to welcome the news. Inflation, the rise of prices across the European economy, has not yet subsided – the EU’s average annual rate stood at6.4% in the EU (5.5% in the euro area), above the ECB’s price stability target of 2%. However, the average masks considerable variation in which poorer EU countries are affected more than their well-off counterparts. Luxembourg’s annual rate is amere 1%, whereas Hungary registers 19.9% (the highest in the EU), Poland at 11%, Romania at 9.3%, and Bulgaria at 7.5%. Because consumers in poorer countries tend to spend more of their income on essential goods and find saving money hard, they are likely to suffer disproportionately because of inflation.

Similarly, legal producers (who make it an objective to comply with the rules fully) in these countries will see a generalized rise in the cost of services, leaving their financial prospects uncertain. By demanding more onerous procedures, the ECHA’s ruling makes it harder for suppliers to bring their goods to the market. As fewer goods are available to buy, the measure is fuelling the momentum of rising prices, which leaves consumers even worse off than before.

The ECHA’s decision is particularly damaging when considering how the European essential oils market works. Notably, smaller companies drive the industry in the EU. No less than 95% of the world’s supply of bergamot comes from 4500 Italian families cultivating it in the Calabria region. The Essential Citrus team in Portugal extracts oil from over 350 citrus varieties in Alejento. Estonia’s Tedre-Farmuses a one-of-a-kind carbon monoxide method to distill oil from 2.5 hectares of raspberries. As such, these enterprises have much smaller profit margins, meaning they are less likely to be able to afford to operate in an environment with costlier restrictions and where their dedicated buyers are scared away by frightening warning labels. With their loss comes a loss of revenue, potentially endangering the 2.29 billion euro European clean beauty market and more economic woes for consumers.

Policymakers, producers, and consumers should encourage the ECHA to reverse course and avoid this outcome. Preliminary discussions began on the 30thof June when the EU’s Permanent Representative Committee requested that the EU Commission re-evaluate the classification for essential oils four years from now. But that should only be the start. Better still, regulation should focus on the genuine threat from fraudsters who overpromise and underdeliver on the medical effects of essential oils using concrete evidence (like safety tests grounded in plausible levels of exposure) rather than hypothetical reasoning.  Consumers can then stay safe without making the cost-of-living crisis more complicated than it already is.

Originally published here

Russian propagandists are constantly reinventing reality

Propagandists have proven to be highly adept in constantly reinventing reality in autocratic countries, particularly Russia, where the fact that reality has constantly debunked the Kremlin’s claims could not wholly shake Russian confidence in its war on Ukraine.

“Oceania had been at war with Eastasia and in alliance with Eurasia. But that was merely a piece of furtive knowledge which he happened to possess because his memory was not satisfactorily under control. Officially, the change of partners had never happened. Oceania was at war with Eurasia: therefore Oceania had always been at war with Eurasia”, wrote George Orwell in his novel 1984.

This was meant to symbolise a fictional world where those in power are highly successful in engineering their own reality, even when substantial changes occur that would normally be expected to shake the population’s trust in their own propagandists.

Unfortunately, real life has proved to be surprisingly similar to Orwell’s fictional world, as Russian propagandists have been trying to explain events on the battlefield in Ukraine.

On February 26, 2022, two days after Russia’s unprovoked invasion of Ukraine, a (now removed) text on the Russian state news agency Ria Novosti declared Russian victory, praising the Kremlin for restoring Russian unity and ending Ukraine’s existence as an “anti-Russia”.

However, total Russian victory soon became impossible, so there had to be a pivot to a new narrative. After all, based on Russian propaganda, the people at home should have been expecting their soldiers to come home soon.

So, an old narrative about NATO provoking war with Russia via its Ukrainian “subject” was refurbished. It was, in fact, NATO and its support for Kyiv that was leading to “military escalation”. In April 2022, RT head Margarita Simonyan, a key pillar of Russian propaganda, declared on Russian state TV that the country was “waging war against NATO”.

Managing expectations

The situation worsened for Russia when Ukraine launched a highly successful counter-offensive in the autumn of 2022, regaining significant lost ground. Propagandists were confused, blaming security services, Kremlin advisers, and the lack of general mobilisation. They, however, quickly returned to their previous claims about Russia being at war with NATO rather than Ukraine. “Brussels” was accused of prolonging suffering by supporting Ukraine and the West. Some claimed the war was lasting longer than expected because Russia “greatly cares about civilians”.

Elsewhere, actors who claim to support peace—such as Hungary’s government—claim that Ukraine has done “what it possibly could” on the battlefield; it could not advance. It stopped being sovereignbecause it could only function off Western money, so it should return to the negotiating table.

As such, expectations have been constantly redrawn by Russian or pro-Russian propagandists regarding the war. From a three-day battle, the expectations were changed because of an alleged fight with NATO or because Russia was “taking care of civilians”. Setbacks were explained by Russia not putting everything it had into the fight.

As of June 2023, the majority of Russians (73 per cent) support the actions of the Russian Armed Forces in Ukraine, according to a poll by Levada, and 54 per cent said the “special military operation” was progressing successfully.

However, only 40 per cent supported continuing military actions—down from 48 per cent in May. Even if we consider measuring public opinion in Russia extremely challenging, data suggest that the complete failure of the Russian armed forces in Ukraine still appears to be a success to most Russians, even though many want an end to the war.

Hearts and minds

It must be noted that the West is currently in an information war with the Kremlin for the hearts and minds of the people, especially Western populations; support for governments aiding Ukraine is not collapsing.

The Kremlin meanwhile is playing a long game, waiting for the exhaustion of the West and its abandonment of Ukraine. This war is deeply asymmetric. The West has barely any access to Russia’s information space, while Russia can (mostly) freely broadcast its messages in Europe and North America by circumventing sanctions or via intermediaries.

Additionally, populations of authoritarian regimes might be more resilient to war exhaustion due to their restrictive information environments.

Overall, the West needs to invest more into improving the resilience of its populations, not via repression but—instead—education, media literacy, and proper strategic communications by governments.

This is, of course, going to take longer than it took for the Kremlin to turn Russia into an autocracy. Investment in these strategic actions must start flowing right now.

Originally published here

Viktor Orban is not the conservative you are looking for

In one of his most recent Friday morning radio interviews, Hungarian Prime Minister Viktor Orban claimedthat “big food chains and multinational companies are behaving like price speculators; they are raising prices even in circumstances when there is no basis for doing so.” 

His government has set price caps on various food products, including chicken breasts, and while that policy is being phased out in exchange for a new regime of government-mandated discounts in grocery stores, one must wonder how Orban became a North Star to so many American conservatives. His price control policies and insinuations that the price of an egg is driven by corporate greed more than market conditions puts Orban closer to American leftists such as Robert Reich, Bernie Sanders, and Elizabeth Warren than the Republican Party where his fandom resides.

But not even the open socialists of the Democratic Party would follow Orban’s model — because Hungarian anti-inflation policies have been so ineffective that prices are rising more sharply in Hungary than in any other European Union member state.

Such anti-business policies are eerily similar to those advocated by Hungary’s communist-era overlords. In the early 1950s, Hungary’s National Price Office only revised mandated prices three times between 1952 and 1956. It was in 1957 that NPO head Bela Csikos-Nagy reacted to so-called covert price hikes by small businesses that had gained some room to maneuver after the revolution of 1956, warning in an interviewwith Nepakarat that “if we find during a future analysis that the company gets illegal profits from incorrectly setting prices, we will act not only to take away their profits but to cut prices as well.”

Hungary’s first communist leader, Matyas Rakosi, frequently used the word “speculation” in his economic speeches. In 1947, Rakosi told miners in the city of Pecs that the prices of industrial products were rising while wages and expenses were not. “What rose was speculation and illegal work,” he concluded. In the same year, he promised the Communist Party would engage in a “forceful fight” against “speculation and those driving prices up.”

Any casual observer of American politics would pick up on the link between this rhetoric from communist-era Hungary and America’s contemporary left wing. Prices are framed as conspiracies against the consumer, never a result of government mismanagement of the economy. If not for Orban’s right-wing social agenda, Reps. Ilhan Omar, Alexandria Ocasio-Cortez, and Jamaal Bowman would be proud.

Rather than acting as the “conservative icon” Orban is sometimes claimed to be, the prime minister is appealing to the remnants of communist Hungary by casting himself as the bulwark between everyday Hungarians and corrupt corporations. Orban and his officials speak regularly of so-called extra profits and levying windfall taxes on these apparently ill-gotten gains.

Of course, the Hungarian government does not articulate what it considers to be an acceptable level of profit, much like Sanders in the United States doesn’t have to define the “fair share” he so often demands of America’s wealthy. Orban can claim at any time that a firm is earning too much in profits and tax them away, including those of American companies operating in Hungary. What American investor or company would want to do business in Hungary under that cloud of vindictiveness and uncertainty?

Anti-capitalist narratives rippling across time from the days of the Soviet Union are not something that Republicans should accept. Hungarians shouldn’t either, as the country is ranked 77th out of 180 on Transparency International’s Corruption Perception Index. According to its Global Corruption Barometer, 40% of those surveyed said they believed corruption in Hungary had increased in the last 12 months. Corruption can take many forms, one of which is an arbitrary system such as Hungary’s, where businesses can only succeed when they hold the favor of the government.

The Tucker Carlsons of the world may be enamored with Orban’s ability to articulate a common good with a nationalist spin, but it’s hard to believe the reality of Hungary is what Carlson wants.

The myth of Orban as a conservative icon is just that: a myth. Orban is neither a conservative nor a limited-government advocate but merely another politician in a long sequence of Hungarian leaders who exploit resentment to keep themselves in power. And with power, Orban’s regime can continue to grant billions in state and EU funds to government-friendly oligarchs. It’s understandable that conservatives wish to find a model in the international community by which to explain Trumpism and fit it into the conservative ecosystem of ideas, but Orban is not it — or at least he shouldn’t be.

Originally published here

Online trolls will be targeting next year’s European elections

Online trolls are already actively disseminating pro-Kremlin disinformation narratives, and these inauthentic networks will likely try to influence the 2024 European parliamentary election. Pro-Ukraine forces must combat these efforts both rhetorically and legislatively.

An investigation by Correctiv recently revealed the existence of a pro-Russian fake account network in Germany working on spreading misleading narratives favourable to the Kremlin via Facebook ads and links to disinformation sites, fake government documents, and content by the politicians of the German far-right Alternative für Deutschland (AfD) party.

One such ad accused Ukrainians of burning churches based on a video taken in Russia over a decade ago. Even though the video did not depict what was claimed, it was allowed to spread freely on social media.

Troll networks were also revealed to be spreading pro-Russian disinformation narratives regarding the war in the V4 and Germany, Italy, or Romania by Political Capital based in Hungary. 

The methods exposed by the Hungarian institute were pretty basic: potentially fake and real accounts on Facebook started copy-pasting the same texts into a broad range of discussions on Facebook, including under posts made by mainstream media outlets, ensuring that even users who do not seek disinformation can see their misleading claims.

The Hungarian ruling party Fidesz has also used online trolls to disseminate its propaganda narratives. One of the first known instances of this network being engaged abroad is when they tried to discredit former MEP Judith Sargentini for her leadership in a report criticising Hungary’s rule of law record. 

This is proof that Fidesz itself could also be able to try influencing EU public opinion, including views concerning Russia and the war. The ruling party has often expressed their desire to unite the European right, particularly the far-right Identity and Democracy, and the soft Eurosceptic European Conservatives and Reformers party groups. 

While the success of such plans seems somewhat impossible – due to, among others, differences in Russia – it is possible that Fidesz will use its troll network to attempt to shore up support for these forces.

What the troll networks want

Despite Facebook regularly trying to stop these troll networks, they always come back, as the social media company had previously halted the one uncovered by Correctiv – but they only succeeded temporarily.

The troll networks on Facebook and other social media outlets will be active during the 2024 European Parliament elections. The far-right is currently having substantial success in the polls. Finland’s Finns party (PS) came second in the Finnish general election, allowing it to form a government with the centre-right National Coalition. 

The new government has just survived the racism scandal of PS leader and Minister of Finance Riikka Purra.

The Austrian far-right Freedom Party (FPÖ) has led the polls since November 2022, gaining an increasing advantage over the center-left SPÖ and the center-right ÖVP. In Germany, the AfD has overtaken the ruling SPD as the second-most-popular party in polls, and they are on the rise.

There is no doubt that, similarly to the situation in Germany, pro-Russian troll networks will be supporting these parties in the 2024 European elections, hoping that it will lead to a new parliament more moderate in its criticism of Russian actions in Ukraine, as the current crop of MEPs has called for EU countries to “reduce diplomatic relations with Russia and keep them to the absolute minimum necessary.” 

Even if the European Parliament has no power in managing the Union’s foreign policy, it would benefit the Kremlin if one of the EU’s critical legislative institutions reduced pressure on the European Commission and member states to act tough on Russia.

The widescale troll activity expected during the election campaign will try to ride Europe’s perceived wave of war fatigue. While Europeans are clearly in favour of most decisions the European Union has made regarding the war in Ukraine, there are some weak points in the bloc

The latest Eurobarometer survey revealed that only 36 per cent of Cypriots support the EU’s sanctions policy vis-á-vis Russia, while 56 per cent oppose them, and in Bulgaria, those in favour are only a slim majority. 

There are 15 member states out of the 27 where at least 20 per cent of respondents said they disagree with the sanctions, so there is clearly a broad electoral base open to pro-Kremlin manipulation.

Pro-Ukraine actors must be ready

It cannot be said that the European Union is not attempting to moderate the disinformation prevalent on social media sites. Its signature legislation on social media platforms, the Digital Services Act, obliges these platforms to assess and address systemic risks such as the “intentional manipulation of their service, including using inauthentic use or automated exploitation of the service.” 

However, this legislation is still in the early stages of implementation, and its actual effects will only be seen well after Europeans go to the polls in 2024.

Parallelly, the voluntary Strengthened Code of Practice on Disinformation signatories agreed to bolster policies to address mis- and disinformation and agree on understanding manipulative behaviors, such as coordinated inauthentic behaviour. 

This commitment will also become an obligation due to the DSA, but the steps taken by signatories so far indicate that the code will yield only a short time.

Overall, pro-EU, pro-Ukraine actors, and—in parallel—social media sites must be ready for a tough fight during the 2024 European election campaign, where malign actors will seek to lay the foundations of a more Russia-friendly European Parliament. 

This must be combatted both rhetorically by explaining to people what practical benefits supporting Ukraine brings and through legislation aimed at inauthentic networks. 

Originally published here

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