Storms

Demonstration near to the National Museum in Budapest two days after the day of independence when - according to legend - the national poet of Hungary (Petőfi, born Petrovics) declamated the National song on the stairs of the Museum, Snowstorm on the roads (that's wha the demonstration was postponed), storms all over Europe and the U.S. around the fourth amendment (how classical this sounds) of the Basic Law of Hungary, The forint plunging in response to - not the nomination but the first measures of the new president of the Hungarian National Bank -. ANd the European Peoples Party invites Frigide Barjot (no typo) to perform before the press conference of Commission vice president Viviane Reding (who, by chance, belongs to the same grouping) ti express herself against the marriage of homosexuals which is just being admitted in France. These storms on the surface hide undercurrents which have more importance for the future. The European Parliament - including the majority of EPP MEP's votes against the compromise long term budget agreed between the member states (but fails to request an increase). Good news: a compulsory mid-term review with qualified majority voting which could mean that a minority of member states cannot stop the EU adjusting its budget to the - hopefully - favourable future economic conditions. Greater flexibility, real own resources are the two further demands and a fourth one, which is in fact an increase in the amount: settling the backlog between commitments (promises to pay) and payments, which grew every year as payment budgets were always lower that commitment budgets. In a time of continuous growth of the budget, this difference would cause no trouble as payments are also later than commitments and thus the increase automatically means that payments - coming partially from commitments in previous years - can be somewhat lower that commitments in any given year. But if the difference is bigger than covered by growth, or there is no growth, the situation aggravates. Meanwhile, a bail-out is agreed for Cyprus. 10bn EUR instead of 17bn, a further 6bn is to be covered by the depositors of Cypriot banks vie a tax on deposits which averages about 6,5%. The European Federalists Party and the blogger of Reuters are enraged. The Parliament did not have a say (well, the national Parliament of Cyprus will have, and Cypriots already staged a run on their banks), they complain. It must be admitted, it is an unorthodox move. But if we think about the methods other governments (whether bailed out by the EU or not) put their budgets right, it is a song. In Hungary, inflation is 6% per year - the same toll on the value of deposits, just to talk about us. Of course, this tax is just a one-off solution (or will it be annual? I doubt). But it soothes to some extent the "northern" citizens who are already very sour about "their money" bailing out "irresponsible" southern states. And, given the composition of Cyprus deposits, it may be well targeted to some who hid their fortunes there.

Youth guarantees

There are two European countries, Austria and Finland which guarantee, that if a young person is unemployed for four months, he/she should get a job, traineeship or re-training offer. This is basically different from the public work which is now the favourite job-creating tool of the Hungarian government. On proposal of László Andor , the commissioner for employment, social affairs and inclusion, the new Multiannual Financial Framework will contain a new youth employment initiative (this was the only addition to the proposal of the Commission on the European Council meeting which approved the Council position on the MFF the 8th February (see criticism about the deal and its enthusiastic reception in a Hungarian article ). And these 6 bn euros can also be used to establish this guarantee as the Council agreed the 28th February (see here . It will be used in the regions where youth unemployment is the highest. The youth guarantee initiative also has a Twitter stream. According to estimates by Andor, the programme would cost 20 billion Euros in Europe. This would mean proportionally 50 billion HUF in Hungary. Thus roughly the amount which has been just taken from the universities or less than half of the interest difference between market financing and an IMF loan (by the most conservative estimates). Further information about the Council negotiations on the MFF is available here while the European Parliaments position can be followed here . A third-party report about the presentation of Mr Van Rompuy and the responses to it shows the main controversies.

National sentiment and European Myth(s)

In a previous post I already talked about national sentiment. In the European Voice Tim King argues that the big disadvantage of Europe to the U.S. is the lack of common myths. His point is that even the rise of Europe from the second World War which he likens to the rise of the U.S. from the Civil War, is interpreted differently by different groups of European people. Nothing illustrates his point more than the debate (or I could rather call it non-debate) about the pre-war years in Hungary. In the Basic Law (replacing the Constitution) the ruling FIDESZ fixed that Hungary was not independent (using a term which suggests the exclusion of all responsibility) from the 19th March 1944 till the first democratic elections in 1990. The time before the German occupation is depicted as the ideal world. I.e. all responsibility for what happened to the Jews, the Roma, the political enemies, is declined. On the other hand, squares and streets are named after Horthy and statues are erected. In the abbey of Pannonhalma a bust of prime minister Teleki, the promoter of the first "Jews' law", the "numerus clausus" in universities, was erected. Horthy and the system is even credited with protecting the Jews and introducing the limitations, their expropriation as necessary to protect their lives. Some simply only talk about the period under the prime ministership of István Bethlen, who consolidated the country by taking a loan from the League of Nations (as the IMF is a specialised organ of the U.N., practically the legal predecessor of IMF), although the scandal of a large-scale French franc forgery also was in this period. The centre operating the schools now, a huge administrative organisation, is named after Kuno Klebelsberg, whose ambition was to overtake the neighbouring nations by educating the people better. He had a concept but this is somewhat antiquated in the 21st century. And these are the softer variations. However, these are the really dangerous ones as it is more difficult to counter their half-truths. In particular as these false myths are set up to feed national pride while it is much more difficult to present the complex reality in a way that it should also be emotionally appealing. A balanced narrative about what happened, how the treaties closing the first World War contributed to the second and how Europe was able to get over its divisions, would already be a big achievement. Maybe this could over time give rise also to a myth...

Salaries of officials

The fight around the EU budget and the salaries of eurocrats continues. It has yielded some very interesting side-branches. A huge proportion of the EU budget is going back to the member states, although not to those who pay them in (The Guardian tried to set up a flowchart showing where the money goes but of course the euros (and pounds and kronas) are not earmarked. However, there are net payers (the richer countries) ant net recipients (who actually spend a significant part of the money received in the richer states), as one aim of the EU is to equalise the level of development in its members - out of solidarity but also out of plain self-interest. No one of the states will openly tell another one "I do not want to pay for you" although citizens and some journalists - in particular in the context of the debt crisis - do say things like that.

So what remains is the administration. Without echoing the allegations of the staff unions who see an intention to weaken the European public service, and without denying that efficiencies can be gained (where can't they?), this endeavour is not well placed in the eyes of an impartial observer (which I am not). The 2004 reform brought huge savings and the Commission is now proposing a further cut of 5% in staff numbers (and to reallocate staff internally to fulfil new tasks coming from accession, the economic governance package and a number of other projects aiming at competitiveness for Europe, research, etc.) as part of a wider package to cut other benefits of the officials (which are fixed in a regulation voted by the Council and the European Parliament). Negotiations on this proposal stalled as the member states did not accept the proposals. The EU budget is about 1.3% of the total GDP of Europe and administration is less than 6% within this. So big savings cannot be expected.

Salaries of eurocrats seem to be a stumbling block. In 2004, a special levy (starting at 2.5% and increasing every year till 5.5%/ was introduced on top of the taxes and social security contributions paid by the officials. This was tied to a method of calculating the annual salary adjustments. This method tied the increase of the salaries to the increase of salaries of public servants in the richer member states (to avoid that the increases in the member states due to higher inflation and the catch-up effect, as salaries there were lower than in Western Europe, should result in a higher increase). Of course the data have first to be available and so the changes take effect a year later. So after the crisis, there was still one year where the salary increase fell out higher than the member states thought justified (surprisingly, not in 2008 but in 2009) and then the member states did not want to apply the algorithm, referring to an exception clause in the regulation, for the case of an unexpected and serious crisis. The Court of Justice later found that that year the crisis was not sudden and not severe enough in its consequences to justify the application of the exception clause. The year after the cut in national public salaries had its effect on the calculation and the 0.1% increase was approved by the member states. The year after, they refused to apply the method again, and similarly in 2012.

Meanwhile, the method of salary adjustment and the special levy expired (they were tied to each other). The Commission proposed to extend these two elements of the staff regulations for another year, independently from the status of the negotiations on the budget and the Staff Regulations. The Council refused that which meant that the special levy (which gradually increased to 5.5%) also expired and all officials of the European institutions got a salary increase of about 5.5%. This was pinpointed in a number of articles in the press. One of them got a surprising reaction from a European Official who stated that he/she is a secretary and earns 700 euros a month. As the salary table of the officials is public, it is easy to establish that this means at least a grade 8 official. Given that secretaries start at grade 1 and the average time to jump a grade is 3-5 years (in reality, it can be longer), this means that this person works in the EU since 20-30 years and is still a secretary. Draw your own conclusion. If you want to see the Staff Regulations, you can find it here

By the way when member states - and in particular David Cameron, outraged about EU salaries compared to his own - complain about 1-2% of salary increases and "perks" of EU officials, Commonwealth officials received a 3.8% salary increase and have much more sumptuous perks - but this is Britain's favourite child, as opposed to the EU.

The UK and the EU

I cannot let the week-end go without commenting on the speech of David Cameron on the EU. He wants to reform the EU or at least negotiate an "extrawurst" , special conditions, namely participating in the common market but have no other obligations, in particular repatriation of powers, mainly on areas where the U.K. has different traditions from the continental ones. A more flexible, more competitive and more democratic EU - who wouldn't agree? But there is a contradiction: if powers have to be repatriated because the EU is not democratic enough, is this necessary if the reforms succeed and it will be democratic? The powers the EU acquired were delegated by unanimous vote of the member states. It seems most states see the reason of today's problems in insufficient co-operation and not in too much power in the hands of the EU (which is not a bodiless monster in Brussels but the elected governments and also elected MEP-s), Cameron may have an uphill struggle. But he promised a referendum only after he will have agreed on a new type of membership of the UK. What can this new type of membership be: a two-speed Europe where Britain is in the slow lane (and then revenges by leaving the EU for being left in the slow lane? Oh no!). What is the new, more democratic EU going to be? Cameron mentions that the main role should go to national parliaments (not instead of the Council where he and his colleagues have the say, but instead of the European Parliament) as there is no united "European Demos" As there is a united UK demos (don't forget, it is not Britain as not only Scots and Welsh, but also Irish from Northern Ireland constitute its "nation". This model deserves some thought, maybe next week. What is the more flexible EU going to be: "cherry picking" was already refused and is also due to create a total chaos. My favourite scenario: A democratisation, cost cutting and competitivity actions - and maybe also some more flexibility can come out of the negotiations about economic governance and banking union, at least the conclusions of the December European Council point to a direction where serious limitations and tailor-made solutions will replace the "one size fits all" approach initially planned - are already in progress. The UK can keep its opt-outs and maybe generalise them or put them in a nicer light. And then he can say: I have succeeded in reforming Europe and our relation to it so we can stay. By the way: The UKIP wants a referendum now. What would be of the party if the UK would exit the EU? Not just Nigel Farage would lose his well-paying seat in the EP (where, as we have heard , he is also paid for a committee membership where he never works, but the party itself would use his whole basis of existence. Whom would they defend the independence of the UK from? There is a party in Luxembourg which remained a party after its program has gone by keeping to the ideological (populist) base, but I doubt the UKIP could find a similar agenda.

Tidbits about Hungary

Hungarian members of the European Parliament, accompanied by some Slovaks and Romanians (the list is not available, I wonder which group they belong to and whether they are all of Hungarian origin) and a Belgian submitted a request to present three Hungarian dog species on the "Solidarnosc" esplanade which is between two lines of buildings of the European Parliament, a pedestrian area, featuring huge screens and posters for the Parlamentarium , the EP's neew visitors' centre and other European events like the Sacharov prize and also demonstrations (last time against the Common Agricultural Policy by Belgian Dairy farmers). According to European Voice (see reference above) which reported about the request, there are strict standards for events on the Esplanade, so it is not sure, the show will take place. By the way: due to the revamping of the numbers of MP's for each member state due to the Lisbon Treaty (the number of MEP's has to be decreased), Hungary, with a little less than 10Mn inhabitants has 21 seats, while Sweden, with 9.5, has 19. So what about powerless new member states and colonies?

An "example" of press freedom

One of the important opposition on line portals has exhausted its resources and announced that it will suspend and eventually finish its activities. Galamus announced that they are only producing debt since two months and the support received since their first call mid-December was not enough. The portal was radically left-leaning liberal and some associated it with Ferenc Gyurcsány, the ex-prime minister who tried to stop indebtedness with austerity against the resistance from its own party and also the forceful actions of allegedly right-wing FIDESZ, who wanted to explain the people that no austerity is necessary and torpedoed healthcare reform and study fees for universities through a referendum. It is not subject of this post to evaluate his activities and views, but the portal Galamus was not associated with his person and did not operate as the "house media" of his tiny party (he parted the Socialists). An important piece of media freedom is breaking down. This is the second time the portal is in difficulties, readers saved it the first time, and they also introduced a sort of "subscription" although the portal remained open. Thus, apparently, the subscription system did not work. I also sent them a subscription like I am subscribed to another paper, Élet és Irodalom, or in short "ÉS" Life and Literature in English, a clearly liberal, intelligentsia-oriented, high level paper, which offers subscription to its electronic edition (saving paper and being also more affordable), but as there only some articles can be read without subscription, I do not forget to renew it. Back to Galamus: a reader opened the space for "12 angry men" by sending himself 1Mn HUF (about 3 600EUR) - 12 times this amount would cover one year of operation. But smaller amounts from more people can also help. So maybe we will succeed again. I sent some money again and I also call my readers if they can afford to do it: IBAN: HU25-1070-0419-6649-3934-5000-0005 Galamus csoport. There was another magazine, more for the young and cheeky free-thinkers: Magyar Narancs , Hungarian orange. For readers who do not understand Hungarian, as a consolation that they cannot read these papers I explain at least the title. It is clear that in Hungary it is not possible to grow oranges in the open air. The Communist system in the fifties tried this, of course without success. A film A Tanú (The Witness) - made in 1969 but screened onlyn a decade later - has as one of the adventures of the hero to lead the farm where they succeed in producing an orange. Just before presenting it to the big party boss, however, his children ate up this rare delicacy (I think I don't have to explain the political importance of this - Cuba produced oranges which were only good to squeeze out their juice but not to eat directly.) Nad thy put a lemon in its place. When the big boss tried the "orange", the hero could not otherwise but say: this is the Hungarian orange - "a little yellow, a little sour, but ours". Have a nice week-end!