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  • Writer's pictureThe San Juan Daily Star

Dark Christmas signals tough times for a prosperous city in Hungary

Visitors at the Christmas market in Gyor, Hungary, Dec. 13, 2022. Dimmed festive lighting at an annual market in the city of Gyor underscores the economic pain being felt across Hungary as energy costs and inflation soar.

By Andrew Higgins

Its fortunes lifted by a huge German-owned auto plant, the largest city in northwestern Hungary has unusually high wages, virtually no unemployment and a deep pool of voters who, grateful for their relative prosperity and well-funded municipal services, support Viktor Orban, the country’s long-serving nationalist prime minister.

So it came as a shock at the start of Advent in late November — only seven months after national elections in which the city, Gyor, gave Orban’s governing Fidesz party a thumping majority — that the city’s annual Christmas market, usually dazzling with festive lights and laser shows, opened in near darkness.

And that is not all that has changed. In October, Gyor shuttered museums, libraries, art galleries and an aquatic center, saying that high energy prices made them too expensive to operate. Schools and kindergartens have been ordered to keep their thermostats turned down.

The city, despite its relative wealth, is running low on money, as are municipal authorities in many other parts of Hungary.

Since Russia invaded Ukraine in February, countries across Europe and beyond have been jolted by soaring energy costs. But the shock has been particularly acute in Hungary, whose right-wing government has often balked at supporting Ukraine, has cozied up to Moscow in pursuit of what it hoped would be cheap and reliable supplies of natural gas and has told its people that any problems they faced were the fault of the European Union, despite being a member of the bloc.

Now, with inflation soaring at 22%, the economy tipping toward recession and even relatively rich areas like Gyor running short of money, economic reality has hit Hungary hard. The governor of the country’s central bank, usually a stalwart Fidesz ally, warned this month that “we have to face the fact that the Hungarian economy is in a near-critical situation,” largely as a result, he said, of the government’s own inflationary policies, not just the war in Ukraine.

At his annual year-end news conference in Budapest on Wednesday, Orban conceded that his country faced problems, describing 2022 as “probably the most difficult year in Hungary since the fall of communism.”

But, echoing Russia’s refrain that it is a victim of “Russophobia,” Orban accused his critics of “Hungarophobia” and said “Brussels and international liberals” were ganging up against his government.

The dimming of Hungary’s once bright economic fortunes, symbolized for years by the giant and ever expanding Audi engine plant in Gyor, has left Orban desperate for cash from the EU, forcing him to curb his truculent attacks on the bloc, abandon efforts to derail European aid to Ukraine and scrap central parts of his economic policy, like price caps on gasoline.

Last week, European finance ministers meeting in Brussels decided to release a portion of billions of dollars in frozen funding for Hungary after Orban’s government agreed to stop trying to block European aid to Ukraine.

But it will not help cash-strapped cities like Gyor much in the short term. Most of the funds, about $6 billion in previously stalled pandemic relief grants and possibly billions more to follow, will go to Budapest to help fill a hole in the national budget and save the government from having to borrow.

Hungarian news outlets, most of which are controlled directly or indirectly by Fidesz, hailed the deal as a “big Hungarian victory.” But independent observers viewed it more as a long-overdue truce between Budapest and Brussels, the seat of the EU’s executive arm and its Parliament, which in September passed a resolution condemning Hungary as a “hybrid regime of electoral autocracy” that should not get any more money.

Reality has also dawned in Gyor.

Tibor Lorincz, a forklift operator at a subsidiary of the German plant and a former Fidesz voter, said he was appalled by the decision to cut the festive lighting. “We all need some light in our lives at Christmas,” he said. Using social media, he rallied hundreds of fellow residents behind a plan to string up their own lights in the center of the city.

Embarrassed, the city government, run by Fidesz, suddenly announced it had found extra money and began decorating — not much, but enough to lift the darkness. “We won a small battle,” Lorincz said, “but not the war.”

Gyor’s mayor, Csaba Andras Dezsi, declined to be interviewed but, in response to written questions, said that “the armed conflict taking place in our neighborhood and the related energy crisis” had put “a heavy burden on all of us” and forced “more modest decorations.”

Roland Kosa, who runs a film company in Gyor, said the city’s scrimping on festive lighting was a “tipping point.”

“The core of our identity is that we are a rich city, and this hit our core,” Kosa said. “Everyone was asking: ‘Can we really not even afford to have even Christmas lights anymore?’”

Skeptical that the reason for this was a Europe-wide energy crisis, he blamed Fidesz and the city’s mayor, Dezsi, an eccentric, parrot-loving cardiologist who took over after the previous mayor, Zsolt Borkai, also from Fidesz, became entangled in a sex scandal and resigned in 2019.

The scandal did little to dent the city’s overwhelming support for Fidesz, partly because it was largely ignored by Hungarian media outlets loyal to Orban. Bad economic news has been similarly obscured, presented as “fake news” ginned up by political opponents, or blamed on European sanctions on Russia.

To rally the public behind its narrative, not dissimilar from that of the Kremlin, Orban’s government is now holding what it calls a “national consultation” — a vote on a series of leading questions intended to show that “sanctions are destroying the economies of Europe.”

The EU Union has imposed no sanctions on Russian natural gas, and Russia’s energy giant, Gazprom, has itself driven up the price by cutting supplies to many customers. Hungary, which sent its foreign minister to Moscow this summer to beg Russia to keep gas flowing, has not been hit by these cuts, but still has to pay more because the price Gazprom charges is largely set by market rates.

Amid severe shortages of gasoline and diesel because of technical problems at Hungary’s biggest refinery and price caps that made it unprofitable to sell, a surge early this month in panic-buying at gas stations across the country forced Orban to abandon his signature policy of setting pump prices by administrative fiat.

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