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Credit: Reuters/Laszlo Balogh By Michael Roddy FELCSUT, Hungary | Sun Jan 15, 2012 10:52am EST FELCSUT, Hungary (Reuters) - Hungarian Prime Minister Viktor Orban has played soccer at a near-professional level and prides himself as a sportsman, but his respect for the rules of democracy increasingly is being called into question, at home and abroad. A player since childhood who advanced to the domestic league level, Orban, 48, founded a soccer academy in his home village west of Budapest, built a country house here, just beyond the goal line of one of its nine soccer pitches, and still comes out from the capital to work with his "personal trainer." "He played midfield or forward, but he was somebody who was a playmaker, somebody who organized the play, and always went forward -- mainly on the right side," said Gyorgy Szollosi, the spokesman for the Puskas Academy, named for the late soccer legend Ferenc Puskas, who led the national team that famously defeated England in 1953 and later played for Real Madrid. Orban is a fierce competitor, but some of his growing legions of critics, inside and outside Hungary, say that in politics, he's taken that competitive spirit too far. They say he and his centre-right Fidesz party, which won an overwhelming two-thirds majority in parliament in 2010, are undermining democratic institutions and checks and balances. "The way I see him, since 2002, 2003, is that he is the biggest adversary and enemy of democracy in Hungary," said author Jozsef Debreczeni, who has written two books about Orban, only the first of them with his cooperation. The dates he refers to are those of a crushing defeat for Orban, who was elected prime minister for the first time in 1998, the youngest in Hungary's history, only to be thrown out when his term was up in 2002. "It is not power that destroyed him, but losing power," said Debreczeni, who once was part of an Orban "braintrust" but now is vice president of a new party formed by Ferenc Gyurcsany. The former Socialist prime minister was shunned by Orban and Fidesz after remarks he made to a 2006 party gathering, saying he had lied to the people about the state of the economy, were made public. The Socialists were crushed in the 2010 vote. Debreczeni's criticisms could be -- and in some quarters are -- dismissed as partisan, but he is not the only one to issue Orban the political and economic equivalent of a yellow penalty card. Orban and his team are maneuvering to avoid getting the equivalent of a red one, which might force Orban to step aside, or trigger early elections. DOWNGRADE TO JUNK It's a close-run thing. Hungary's debt has been downgraded to junk status by three major credit-rating agencies and the European Commission is contemplating sanctions because of what some Western powers see as an anti-democratic bent to a new constitution that took effect this month. The IMF, as a precondition for giving Hungary a badly needed financial lifeline, is demanding changes to laws it says could undermine the independence of the central bank. U.S. Secretary of State Hillary Clinton, after talks with Orban last June, expressed concern about democratic freedoms in Hungary, and followed up with a letter in December. Tens of thousands of Hungarians rallied outside the National Opera House in Budapest in early January, calling for the removal of the man they called the "Viktator" while Orban attended a gala event inside to launch the new constitution. The state-run public television channel's coverage of the demonstration, in which its reporter was positioned at one of the few places near the opera house where no protesters could be seen, has become a parody hit on the Internet and sparked scathing comparisons to trickery that went on in the media under communist times mtvahirado.tumblr.com/. The editorial board of The Washington Post last week said "the government of Prime Minister Viktor Orban now more closely resembles the autocratic regimes of Russia and Belarus than fellow EU democracies." The description made the Orban government bristle, with Foreign Minister Janos Martonyi saying "such sweeping insults cannot be discussed seriously." It could make a lesser man than Orban -- not to mention the Fidesz party around him, which was able to rush through the new constitution and literally hundreds of new laws in record time over the past year because of its outsize majority in parliament -- crumble, or at least humble. Not so Orban, whose reputation on and off the soccer pitch is that of someone who always pushes forward and never goes back without a fight. "If I have to write memoirs at some point, and the question is why we had to undertake all these conflicts, the new constitution, then I will write that I waited, with millions like me, for 20 years so that we can complete what we started in Hungary in 1989," Orban said in a rare meeting with the Western media last week, speaking about the year the Iron Curtain collapsed and Hungary emerged from four decades of communism. Reporters attending the almost two-hour-long session, most of which was off the record, said Orban was unbowed and feisty -- as if ready for a second half, which is likely to be rough indeed. "This kind of huge pressure does not bother Viktor Orban at all," said Gabor Fodor, who established Fidesz with Orban in the late 1980s, giving Orban a platform for his famous call in 1989 for Soviet troops to leave Hungary. The two split in the early '90s, leaving Orban in charge of Fidesz and Fodor to join a liberal party. "The young Orban wouldn't be on speaking terms with the present one, but I'm a liberal," Fodor told Reuters. HARD TIMES These are hard times in Hungary, both in the rarefied world of high finance, and right down at street level. After the latest of the three downgrades of its sovereign government debt to junk status, in large part because of what the ratings agencies have criticized as unorthodox and unpredictable economic policies of the Orban government, Hungary's forint currency hit a record low of 324 to the euro. That makes imported commodities more expensive, including petrol, which last week soared to a record high of more than 420 forints to the liter -- meaning it would cost roughly $6.50 per U.S. gallon in a country where the average take-home pay is about 500 euros ($640) a month. Among the measures that Orban's government adopted after it took power in May of 2010 was to institute a so-called "flat tax" of 16 percent across the board, for all taxpayers, that the government says is intended to leave more money in people's pockets, in large part to boost the ranks of the middle class. That was the theory. The reality is that the flat tax reduced government tax intake by some 500 billion forints last year, contributing in part to the financial uncertainty that has hurt Hungary's financial standing, led to its debt being downgraded and knocked the stuffing out of the forint. "I got some tax breaks, yes, but the business environment got so much worse that the tax break is no relief at all," said Balazs Szanto, a lawyer ducking under a balcony near the Hungarian parliament to escape a sudden outburst of hail. The Orban government, claiming that by one subterfuge or another, hundreds of thousands of Hungarians get state benefits without working, while only some 3 million of the country's 10 million population are gainfully employed, has forced many people to do mostly menial jobs for dole money, which predictably has not gone down well either. "I don't mind if I have to work for my money but I want to make ends meet on what I get," said Bela Nagy, 49, an unemployed man in a rundown area of Budapest who is from Hungary's large Roma community, which is subject to widespread discrimination. "It's not fair that they make me work and then stick me with a measly 30,000 to 40,000 forints in my hand. What am I going to do with that?" "We all have to work in the black market," he added. "How else do you think I could eat?" PLUNGING POPULARITY Opinion polls show that Szanto and Nagy are not alone in their disillusionment with a government that waltzed into parliament with the biggest majority ever seen in post-communist Hungary. It was sufficiently large to let Fidesz rewrite laws and pass a new constitution without the help, or even sometimes the participation, of parties of the fractured and mostly then-demoralized opposition. Having lost nearly half its supporters since the 2010 election, public support for Orban's Fidesz party dropped by another two percentage points to 16 percent in January from December, an Ipsos poll published last week found. Of those polled, 57 percent said they had no party preference and a staggering 84 percent said the country was on the wrong track. Orban expressed the desire, in a speech before the 2009 elections, to end the fierce, ruinous partisanship that has beset Hungarian politics almost since the collapse of communism and that "a large ruling party would emerge in a lasting way, a central political sphere, which will be able to define national issues," but the polls show that goal slipping away. Opposition parties and movements, recovering or being formed from scratch after Fidesz's lopsided victory, think the time is ripe to lay the groundwork for a massive fightback in elections due in 2014 -- or sooner should the government collapse. Following its near total wipeout in 2010, the former ruling Socialist Party, successor to the communists, has a new party president who is projecting a younger, less hidebound image than his predecessors. The four-year-old "green" LMP (Politics Can Be Different) party blends Obama-style, Internet fund-raising with street-savvy, Western-media-friendly publicity tactics, like members chaining themselves to the gates of parliament, as they did in December, and organizing the big Opera House rally. Asked about the chanting of "Viktator!" at that rally, party leader and member of parliament Benedek Javor said he did not know who coined it but added, "I guess it's so logical they use it everywhere" -- even though he does not totally agree with it. "Hungary is not a dictatorship but it has left the democratic community -- it's somewhere midway between democracy and dictatorship," he told Reuters in an interview at his parliamentary office. "Still there are independent newspapers or online sites and news portals, there are opposition parties, there are demonstrations which are not banned. "On the other hand, they (Fidesz) really just destroyed most of the checks and balances in the democratic system, while arguing that they are doing the same thing as in other European states. The difference is they have selected the worst practices from different European states and made a system of it." The trouble for the Socialists, as well as for LMP, is that no matter how unpopular Fidesz may be, it remains the most popular party. Support for the Socialists in the Ipsos poll was a tepid 11 percent, for LMP a barely measurable four percent. STILL CONFIDENT Perhaps this is why, in the face of the strong and chilly headwind blowing into Hungary from Western European capitals, Brussels and Washington, Orban and his close advisers are confident he will remain in power, indeed that Fidesz will win the next election, though the party is unlikely to retain its two-thirds majority. "He's still very committed and very confident, and we want to be successful, we still want to make Hungary one of the most successful European or Central European countries," Orban's spokesman Peter Szijjarto said. "There's not a knockout feeling, you know." Still, to stick with Szijjarto's shifting of the sports imagery, there are more rounds to go in the bout between Orban and his critics, some of whom, like the IMF and the European Commission, hold the pursestrings to the massive amount of standby loans Hungary needs to keep its borrowing costs from going so high that the country could be faced with bankruptcy. Already Hungarian bonds have been pegged at yields above a ruinous nine percent. That is why Hungary dispatched a delegation to Washington to assuage the potentates of the IMF in advance of a meeting in Brussels this week where the European Commission will discuss possible sanctions on Hungary. The greater the probability of sanctions, the less likely Hungary is to get the money it needs, so the government is now saying it would do its best to modify legislation if needed, and reassure markets. To some extent, the game plan is working. "We're essentially saying that at the moment we think that the IMF-EU programme will be finalized by the end of the quarter because the government will have to concede on additional measures for the budget and will probably have to amend whatever the EU demands are on the central bank laws and the other financial stability laws," said Raffaella Tenconi, an economist for BofA Merrill Lynch Global. Tenconi is not alone, though, in thinking that an agreement will not be the end of the story. "Where we are particularly skeptical is on the implementation of the programme," she said in a telephone interview. "So our main concern is actually that, once the programme starts, it doesn't run smoothly and it can be halted again because the implementation is incomplete." (Additional reporting by Krisztina Than, Marton Dunai and Krisztina Fenyo) (Writing by Michael Roddy, Editing by Janet McBride) World Special Reports Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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