Hungary is almost broke. That is the country's great tragedy. It needs financial help from the other members of the European Union (EU), who are already helping EU states in financial difficulties, and from the IMF. But both the EU and the IMF refuse to come to Hungary's aid because they dislike the new Hungarian Constitution and a series of new laws that came into effect on January 1st.

Last week, the European Commission initiated legal proceedings against Hungary over its new constitution and legislation. It gave Hungary one month to enact changes with regard to the independence of the central bank, the judiciary and the national data protection authority, or else face the prospect of being fined by the European Court of Justice (ECJ), the EU's supreme court. American Secretary of State Hillary Clinton has also voiced concern over democratic freedom in Hungary.

In April last year, the conservative Fidesz party won a landslide victory in the Hungarian Parliament. Fidesz, led by current Prime Minister Viktor Orbán, won over 52% of the votes and more than two thirds of the seats. The Conservatives owed their victory to the deep dissatisfaction of the Hungarians with the Social-Democrat MSZP which led the country since 2002 and has bankrupted its economy.

The MSZP is the successor of the former Communist Party which ruled Hungary until the end of the communist dictatorship in 1989. For the sake of national conciliation, the former Communists were left largely undisturbed when democracy was reintroduced in Hungary. Many members of the old Communist Party were allowed to keep their top positions in the civil service, the judiciary, the universities, the media and the army. Former communists who had enriched themselves by liquidating state assets were also left alone.

As in many other East European countries, the Communists rebranded themselves as Social Democrats. Like the former communist parties in several other East European countries, the MSZP was welcomed into the international networks of the West European social democrat parties. The MSZP even got to hold several high-ranking functions at the European Parliament and in the European Commission.

The Communists' rebranding tactics seemed to have worked. From 1994 to 1998 and from 2002 to 2010, the Hungarians voted the former Communists back into power. In September 2006, however, their reputation received a major blow when a tape was leaked of a private conversation in which the Hungarian Prime Minister Ferenc Gyurcsány could be heard admitting to party officials that he had lied to the nation. Gyurcsány said that the MSZP had won the elections by deliberately concealing how dramatic the economic situation in the country was. The leaking of the tape led to protest demonstrations by thousands of Hungarians who felt cheated by a party that had simply camouflaged its dictatorial core with democratic theatrics. The demonstrators were savagely beaten up by the police, but the Hungarians took revenge in last April's elections. The MSZP was trashed and fell to 19.3% of the popular vote from 49.2% four years earlier.

After the elections, Fidesz set out to do what it had promised the Hungarian electorate it would do: break the power of the old Communist elite. To this end, the Hungarian parliament adopted a new constitution. Its preamble is an ode to traditional values, patriotism, the family and freedom. It even mentions God, which undoubtedly annoys the EU elites in Brussels who refused any reference to God in their own constitution.

Although there is a strong case to be made for a woman's pregnancy not being in the purview of governments but a private matter between her physician and her, the Hungarian constitution protects human life from the moment of conception and, even though same-sex couples may legally register their partnership, defines marriage as a union between a man and a woman. The country's name is also changed from "Hungarian Republic" to "Hungary," and although Hungary remains a republic, the preamble contains references to the Holy Crown of King Stephen, the first king of Hungary.

The Constitution also refers to "the inhuman crimes committed against the Hungarian nation and its citizens during the National Socialist and Communist dictatorships." It explicitly mentions that the self-determination of Hungary was lost between March 19, 1944 (the date of the German invasion) and May 2, 1990 (the date of the first free elections in the post-Communist era), and asserts the invalidity of all legislation dating back to that period: "We do not recognize the Communist constitution of 1949 because it has served as a foundation of tyrannical rule. For this reason that legislation is hereby invalid."

Referring to the damage done by four decades of Communist rule, the constitution says that Hungary has "an eminent need of spiritual renewal since last century's developments have undermined moral values."

With its emphasis on traditional values, historic continuity, Christianity and the need for spiritual renewal, Hungary's constitution is an affront to the ruling liberal elites in the European Union and the world, who are hostile to Europe's Christian heritage and national traditions.

The New York based NGO Human Rights Watch criticized the Hungarian constitution, saying that it "could lead to efforts to overturn Hungary's abortion law and result in restrictions on abortion that would put a number of fundamental rights for women at stake." It also complained that, by defining marriage as a bond between a man and a woman, the constitution "denies LGBT people access to state protection for their families and relationships, and is inconsistent with Hungary's obligations under the European Convention on Human Rights and the European Union Charter on Fundamental Rights."

Hungary has also angered the liberal elites in the West by curbing judicial activism. To this end the retirement age for judges has been lowered from 70 to 62 and the president of the Supreme Court is required to have at least five years' Hungarian judicial experience. This eliminates the incumbent who served for 17 years in the activist European Court of Human Rights.

With regard to the economy, the new Hungary has introduced a flat tax of 19% and has capped the budget deficit to a maximum of 3% of GDP. It is also merging the Hungarian central bank (MNB) with the institution that supervises commercial banks, thereby restricting the power of András Simor, the MNB governor. Simor, an economist who worked for the MNB during the Communist era, is an appointee of the previous MSZP government. While Prime Minister Viktor Orbán is not dismissing Simor, the new constitution wants the MNB governor to take on oath of fidelity to Hungary and its interests. The case is being used by the EU and the IMF to deny Hungary credit guarantees and to justify other sanctions.

Both institutions argue that Hungary has violated the central bank's independence. The European Commission also objects to the oath because the MNB governor is a member of the council of the European Central Bank – a neutral pan-EU body. José Manuel Barroso, the President of the European Commission (and a former Maoist), said last week, as the Commission was initiating legal procedures against Budapest, that the Hungarian authorities had failed "to guarantee respect of EU law" and that the Commission is determined "to make sure that EU laws, both in letter and in spirit are fully respected [in Hungary]. We do not want the shadow of doubt on respect for democratic principles and values to remain over the country any longer."

"The independence of Hungary's central bank will be a precondition for a European Union and International Monetary Fund precautionary financial support program for the country," said Olli Rehn, the European Commissioner For Economic and Monetary Affairs.

In the European Parliament, Orbán was attacked for violating the fundamental values of democracy and freedom. Liberals, Greens and Socialist said that the new Hungarian constitution is an undemocratic document. Liberal group leader Guy Verhofstadt, and Green group leader Daniel Cohn Bendit both called on the EU to suspend Hungary's voting rights in the EU Council because its constitution is a "serious and persistent breach" of EU principles. Cohn Bendit, a former Communist, said that Orbán behaved the same way as Venezuelan dictator Hugo Chávez and Cuban dictator Fidel Castro. Socialist group leader Hannes Swoboda said that Orbán is destroying the very freedoms that the Hungarian people fought for.

The threat that Hungary will not receive the loan of €20bn ($25bn), which it urgently needs to avoid bankruptcy after years of Socialist economic mismanagement, is forcing Orbán to appease his critics. He has promised to amend the measures to restrict the powers of the MNB and the early retirement of judges.

Last Saturday, however, the Hungarians made it clear that they are still standing behind Prime Minister Orbán. Over 100,000 people gathered in Budapest in support of the government. During the last century, the Hungarians played a prominent role in opposing Soviet tyranny. Today, they are taking the lead in opposing the European Union. "May God bless the Hungarians!" says the opening phrase of the new Hungarian constitution. May He, indeed.

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