What to watch at Hungary's elections

Hungary’s right-wing nationalist Prime Minister Viktor Orban seeks a third consecutive term in parliamentary elections on Sunday after scoring two landslide victories in 2010 and 2014.
Hungarian Prime Minister Viktor Orban leaves after his speech at the National University of Public Service in Budapest, Hungary, April 4, 2018. REUTERS/Bernadett Szabo
Most opinion polls show that the best Orban’s Fidesz party can achieve is winning a simple majority, which is also the likeliest outcome as Fidesz has a firm lead in opinion polls.
But there is an odd chance that the fractured opposition could push Fidesz into a minority and create an unprecedented hung parliament.
Orban is the European Union’s second-longest-serving government leader after Germany’s Angela Merkel.
He has led opposition in the bloc’s eastern wing against a quota system, backed by Merkel and Brussels, to distribute migrants across the EU. He is also a leading opponent of efforts to deepen the bloc’s integration.
His Fidesz party and its Christian Democrat ally KDNP won more than two thirds of parliament seats in the previous two elections.
Hungary's election graphics: tmsnrt.rs/2IS7mBl

HOW DOES THE ELECTION SYSTEM WORK?

Hungarian voters will elect 199 members into parliament in a single round. A total of 106 seats can be won in single-member constituencies in a first-past-the-post system. Party and ethnicity lists fill another 93 seats. Winning candidates have their surplus votes added to national party lists.

TURNOUT LEVELS AND OTHER FACTORS TO WATCH

* Some pollsters said voter turnout above 70 percent could signal efficient opposition mobilisation which may cause Fidesz to lose its parliamentary majority. The participation record, set in 2002, is 72 percent.
* High turnout may also push some smaller opposition parties below the five percent entry threshold. Green liberal Politics Can Be Different (LMP) and the social liberal Democratic Coalition hover around the threshold in polls.
* Opposition candidates need to win in 40-45 districts to deny Fidesz a majority, said Tibor Zavecz of pollster Zavecz Research.
* Janos Kovacs, chief analyst of pollster Iranytu, which is close to the largest opposition party Jobbik, put that critical threshold at 43-45 districts. “Much will also depend on (party) list votes,” he added. “Estimating mandates is tougher than any time since 1990.”
* According to opinion polls, Jobbik is likely to place second. Jobbik has ruled out coalitions with either Fidesz or establishment leftist parties.

HOW FIDESZ TWEAKED THE ELECTION LAW IN ITS FAVOUR

Election rules have been amended by Fidesz since 2010, boosting the ruling party’s election chances against a fragmented leftist opposition and the rightwing Jobbik party.
* The total number of seats was reduced from 386 to 199 in 2011. The ratio of constituency seats rose to 60 percent from less than 50. District boundaries have been redrawn, and critics say gerrymandering was significant.
* A second voting round was eliminated, denying parties the option of clinching deals between the rounds, which contributed to the splintering of the current opposition.
* The system of voter compensation was changed in favour of winning candidates. In local districts, any vote not used to win a first-past-the-post race is added to national lists, including for the winner.
* The Fidesz government gave ethnic Hungarians the right to citizenship. They can vote on party lists, by letter. According to National Election Office data, 378,000 such new citizens have been registered for the 2018 election. A vast majority of them support Fidesz.
* Mail ballots were outlawed for hundreds of thousands of ordinary Hungarians working abroad, who are not necessarily Fidesz supporters. They can only vote in person at Hungarian embassies or consulates, limiting their ability to participate.
* The National Election Office mandated parties must field candidates in at least 27 local districts to maintain a national list and receive state support for their campaign, limiting options for parties to cooperate.
Hungarian Prime Minister Viktor Orban is on course to secure another four-year stint in power on Sunday, paving the way for Europe's most prominent populist leader to continue building what he calls an "illiberal democracy."
Orban's right-wing Fidesz party comfortably leads most opinion polls ahead of the vote, though a surprisingly bruising election campaign has put the incumbent's parliamentary majority on shaky ground.
"There are two different worlds to this election. To the outside world, it's all about migration and conspiracy theories. But for many opponents of Orban in the country, social issues and corruption allegations are more important," Andras Biro-Nagy, political analyst at Policy Solutions, a Hungarian think tank, told CNBC in a phone interview.

"Orban's far-right rhetoric is even more extreme than (President Donald) Trump when it comes to migration. The country has shifted to the far-right and, in doing so, has become a role model for such parties with similar ambitions in Austria, Germany and France," he added.

Why does this matter?

"Everyone is watching to see if the tide of populism has turned — it hasn't," Otilia Dhand, senior vice president of Teneo Holdings, told CNBC via phone interview.
"My guess is by 2022 the Hungarian opposition may have finally got their act together and so will stand a much better chance then," she added.
Panoramic view over the Castle Hill of Budapest with Buda Royal Palace and the Castle District.
Getty Images
Panoramic view over the Castle Hill of Budapest with Buda Royal Palace and the Castle District.
The presidential election is viewed by some external observers as a test to discover exactly how strong Europe's populist pulse is beating, following the success of anti-establishment parties in Italy last month.
"Orban is the strongest populist leader with the most powerful position in the EU. He's also recognized by several other far-right parties as the man to follow. So of course it is very, very important how successful that man becomes," Policy Solutions' Bíró-Nagy said.

Immigration issue

Hungary's long-time premier has consistently vowed to maintain a forceful defense of the country's borders and culture against an influx of people from the Middle East and Africa.
The issue is a key election topic in the country, which found itself at the heart of the continent's refugee crisis in 2015. That summer, almost 175,000 people submitted asylum applications to Hungarian authorities, with 425 being accepted, according to Eurostat.
Last year, the number of applicants seeking asylum in the country slowed dramatically to just 3,115 requests, with only around 33 percent receiving a positive response.
"Fidesz tries hard to be seen as the protector of external enemies and, in doing so, it creates a siege mentality," Dhand said.
Refugees try to live under hard conditions in a tent camp as Hungary closes its Serbia and Croatia borders with razor wire fence, near Csongrad, Hungary on June 9, 2016.
Mehmet Yilmaz/Anadolu Agency/Getty Images
In addressing a sizable crowd at a rally in the capital city of Budapest last week, Orban said his ruling party had been fighting against shadowy international forces looking to break Hungary.
"Europe is now under invasion … (Brussels) wants to dilute the population of Europe and to replace it, to cast aside our culture, our way of life and everything which separates and distinguishes us Europeans from the other peoples of the world," he said.
Orban's latest comments were reminiscent of a now infamous speech he made back in 2014, in which he had championed the idea of an "illiberal democracy."
Shortly after his second consecutive electoral victory four years ago, Orban said Hungary would reject a common set of values among EU countries broadly thought to be liberal and democratic and, instead, it would look to follow in the footsteps of countries such as China, Russia, Turkey and Singapore.
Hungary, which joined the EU in 2004, has frequently been at loggerheads with Brussels since its ascension to the bloc. The former communist state has often been criticized for looking to assert its influence over courts, the media and other independent institutions.

Soros 'scapegoat stories'

Orban has also often attempted to vilify Hungarian-born billionaire George Soros for the immigration "problem." And at the start of the year, he introduced draft legislation to "Stop Soros." This included a 25 percent levy on foreign donations that backed illegal migration in Hungary.
Soros, whose political views are in stark contrast to Budapest's ruling Fidesz party, had previously said he believed he was targeted by an administration "stoking anti-Muslim sentiment and employing anti-Semitic tropes reminiscent of the 1930s."
George Soros, founder and chairman of the Open Society Foundations, arrives for a meeting in Brussels, on April 27, 2017.
OLIVIER HOSLET | AFP | Getty Images
George Soros, founder and chairman of the Open Society Foundations, arrives for a meeting in Brussels, on April 27, 2017.
Orban's view that European culture is under an existential threat from migration and multiculturalism is squarely at odds with both Soros and the EU.
"The majority of people here do not believe in the migration issue or the Soros scapegoat stories but the minority of Orban supporters that do are fragmented and easy to mobilize so they are difficult to fight," Robert Laszlo, elections expert at Budapest-based think tank Political Capital, told CNBC in a phone interview.

Who can challenge Fidesz?

In an election system that tends to favor the winner, Orban has a fragmented — but stable — political base of around 2 million voters. That's about 25 percent of the total population.
"(However) a growing appetite among dissatisfied voters is likely to encourage higher turnout and therefore a higher chance of success for Orban's rivals. And as each district is set up as winner takes all, people could back the most likely candidate rather than the one they would choose," Policy Solutions' Bíró-Nagy said.
Fidesz is the clear favorite to secure enough votes to retain its majority, followed by far-right party Jobbik and the Hungarian Socialist Party.
Viktor Orban, Hungary's prime minister, pauses as he delivers a speech during a public ceremony in Budapest, Hungary, on Thursday, March 15, 2018.
Akos Stiller | Bloomberg via Getty Images
Viktor Orban, Hungary's prime minister, pauses as he delivers a speech during a public ceremony in Budapest, Hungary, on Thursday, March 15, 2018.
Opposition party leaders have pinned their hopes on a recent shock by-election defeat for Orban's Fidesz party. The battle for political control in Hodmezovasarhely culminated in victory for independent candidate Peter Marki-Zay in February. Despite being a political novice, Marki-Zay won 57.5 percent of the vote as he enjoyed the support of the full spectrum of the opposition.
Voter turnout and tactical voting are both thought to be crucial on Sunday, though most analysts still anticipate Orban to secure another parliamentary majority.