Opposition parties pin electoral hopes on referendum capping CEO pay

August 1, 2017

Photo: index.hu

At a press conference held on Monday in Budapest leaders of several opposition parties called for a nationwide referendum on limiting the salaries of heads of state-owned companies. Party leaders believe such a referendum would expose weakness in ruling party Fidesz ahead of the 2018 general election. But rules regarding the scheduling of referendums – and possible deficiencies in the aims of the referendum itself – could frustrate their plans.

Leaders of the Hungarian Socialist Party (MSZP), Politics Can Be Different (LMP), Together (Együtt), Dialogue for Hungary (PM) and the Hungarian Two-Tailed Dog Party (MKKP) gathered at the underpass at Blaha Lujza square to announce their respective party’s intention to cooperate on the collection of the requisite number of signatures. The parties and their supporters have 120 days to collect at least 200,000 signatures in support of holding a nationwide vote.

Civil and political activist and former LMP MP Gábor Vágó (center) initiated the process of holding such a referendum when he submitted the following question to the National Election Office (NVI) for approval:

“Do you agree that the yearly income of persons who have an employment relationship with a business organization in the public domain should not exceed the yearly sum of the President’s honorarium?”

The question was initially rejected by the NVI but deemed permissible in early July by the Curia, Hungary’s highest court.

Were the referendum to succeed, it would compel parliament to cap the monthly salaries of the heads of state-owned companies at HUF 1.5 million (USD 5,800).

The party leaders hope that a successful referendum will weaken the Fidesz regime ahead of the 2018 national election, and dispel the myth that, in the words of MSZP chairman Gyula Molnár, “Fidesz is irreplaceable and the country is irreparable.”

Vágó said at the press conference that the gathering of 200,000 signatures by November 21 will show that “the Orbán system will fail in a referendum.” Mayor of Budapest District XIV Gergely Karácsony (PM) added that a successful referendum “could be the path to the 2018 elections and the victory of the opposition.”

But as index.hu notes, certain rules on referendums may frustrate plans to hold the referendum before the election next spring.

Too little, too late 

According to Hungarian law, at least 200,000 signatures must be collected before November 21 to force a referendum. After that, the NVI has a maximum of 60 days to certify the signatures, at which point the NVI president must inform Speaker of the National Assembly László Kövér that a sufficient number of valid signatures were collected. Kövér, with the parliament, must then approve the nationwide referendum. Thereafter, President János Áder has up to 90 days to schedule the vote for a Sunday.

But a provision of the law on referendums stipulates that “a national referendum may not be held on the day of or within 41 days preceding or following a general election of national assembly representatives, members of European Parliament, as well as local municipal representatives and mayors.”

This means that a successful signature collection campaign could only bear fruit well after the election is held next April.

Index.hu also notes potential problems with the content of the referendum itself. While the salaries of CEOs of large state-owned companies such as railways company MÁV and the Hungarian Postal Service are quite high (often more than HUF 5 million monthly), they are modest compared to salaries for comparable positions in the private sector. Setting a ceiling of HUF 1.5 million per month for CEOs, Index argues, would dissuade experienced, competent CEOs from taking those jobs.

Come together

While joining forces in support of a referendum falls short of a genuine political coalition, the presence of five opposition parties on the same stage for any purpose is a rare sight in Hungarian politics, where infighting, suspicion and resentment dominate discussions on potential collaboration.

But with the election only eight months away, the opposition parties in question – each of which individually enjoy very limited popular support according to polls – are running out of time to develop an effective strategy for replacing the governing party. The only hope the Vágó referendum has of taking place before the election is if sufficient signatures are collected and submitted by the end of August – and even then, the referendum has to be won, which would represent, at worst, an embarrassment to Fidesz.

But Vágó has already promised that signature collection will go on until November, potentially dooming the referendum until after Fidesz has returned to power for another four years. Despite optimistic hopes expressed by party leaders supporting the referendum, it is still unclear what it could realistically achieve.