The Ministry of Foreign Affairs would save 2 billion HUF annually by closing down some of its consulates and embassies, but it loses more than this amount in real estate businesses in New York and Moscow - this is how the reduction operations of Bem embankment can be summarized. The flag was, or is, going to be hauled down at four embassies (Luxemburg, Venezuela, Chile, Malaysia) and eight consulates (Düsseldorf, Lyon, Krakow, Chicago, Toronto, São Paulo, Hong Kong, Sydney). The issue caused a storm of indignation when President László Sólyom said in front of Hungarians living in Sydney: according to his knowledge Viktor Orbán, if he became Prime Minister, he would re-open our foreign representation in the Australian city. The President of Fidesz confirmed it and the foreign affairs background people of the opposition party added: if they won the elections, besides re-opening the closed down consulates of significant Hungarian diaspora centres (Chicago, Toronto), they would also re-open the representation in Krakow that is important for historical and economic reasons.

Relations with Moscow

Critics of the reduction say: on the stagnating markets all over the world it is possible to get rid of the real estate of the consulates only with a huge depreciation. It is true though that even in the circles of Fidesz, people agree that the network of the foreign representations must be re-organized - even Viktor Orbán, president of the party, agreed. The Goodman Brinker British took care of this work recently: they have created a system called integrated diplomacy (in which all employees mainly report to the ambassador and not to the government body that delegated the given employee), and they have turned towards Asia more than before.

The intention to open towards the east can be seen also in Hungarian foreign policy. We closed down our consulate in Hong Kong but at the time of the publishing of this edition of our paper Hszi Csin-ping, the Chinese Vice President is in Hungary, and at the time of his visit it is announced that a similar representation will be opened in Csungking in Mainland China. In South-America we did not succeed in filling the bridgeheads of Hungarian diplomacy with content: therefore the office of the regional ambassador will be closed in Venezuela, just like the embassy in Chile and the consulate in São Paulo. Closing down the latter is condemned not only for national politics (a lot of Hungarians live in the Brazilian metropolis and in its surroundings), but also for economic reasons. São Paulo is one of the most important business centres of South-America, moreover, the country will host the football world championship in 2014 and the Olympic Games in 2016.

From the re-organization, the Ministry of Foreign Affairs left out North-Africa, although we have embassies in Morocco, Algeria, Tunisia, Libya and Egypt. Our trade with Tunisia is not very significant and the representation of interests of the ten thousand Hungarian tourists who go there on holiday every year could be carried out during the main holiday season by a delegated consul sent from Algiers or Tripoli. (A similar system works well for example in the case of Croatia, although it is a system within the country, where a diplomat sent from Zagreb is on duty in Split.) One of our sources explains that the Hungarians posts in the Arabic world escaped the "lawnmower" with the help of the strong lobby power of the diplomats. The majority of them graduated from the Moscow State Institute of International Relations, where the diplomat aristocracy of the Soviet Union and its client states used to study. According to another conversation partner of ours from the Bem embankment, the Union diplomats form a similarly potent lobby group. In the fight to keep the positions the interests of the diaspora-Hungarians are less important.  It is no accident that the closing downs mostly effect them (see our article in the box).

Facing the Balkans

Therefore the foreign affairs experts of Fidesz talk about re-opening the foreign representations that are important for national political reasons. If there is a new Orbán-government besides strengthening the diplomatic positions in NATO-, and EU-member states, greater activity can be expected in such countries from where we purchase energy. It is an admitted objective for example to build gas pipes from the north to the south together with the Slovaks and the Polish in order to decrease dependence on the Russians. Moreover, the Hungarian presence would become stronger in the Balkans, which is considered to be a geopolitical rear backyard. At the moment, the quantity and quality of information received from there is not considered appropriate. Therefore many remember a golden age when Kálmán Kocsis, the first man of Hungarian civil intelligence work in the Antall-government, was the ambassador to Sarajevo between 1997 and 2003. Not only the Hungarian governments, but also the international authorities supervising Bosnia, were satisfied with his work.  A sign of it is that based on a request, Kocsis created the unified secret service of the Balkan states consisting of three nationalities between 2003 and 2005. On the other hand, many raise the issue that reduction might be necessary during the new government as well: it can be hardly justified that each embassy is an independent economic unit with the necessary staff.

Real estate losses worth billions

The economy measures are dwarfed by the losses though: the foreign affairs portfolio is threatened with a loss worth more than ten billion HUF as a result of two real estate issues. As it came to light from the article of the Origo internet portal, in 2005 Árpád Székely, ambassador at the time, signed a contract about selling the Hungarian commercial local office's 17 thousand square metres in Moscow, though the related government resolution was ready only in 2006, meaning that the diplomat did not have the appropriate authorization. During the repeated procedure in 2008 the same company won as in 2005. A small flaw: the latter winner transferred the 3,5 billion HUF purchase price to the Hungarian state treasury months before the tender was announced - the reference point was the (unlawful) contract signed in 2005.

At the meeting of the Committee of Foreign Affairs of the Hungarian Parliament on 22 September, Sándor Horváth, Vice President of the State Audit Office of Hungary said to the dumb-founded members of Parliament: during his two-decade long career in the state audit field he never came across such a case. Besides the briskness, what is even more surprising is the amount: the 210 thousand HUF per square metre is the price of an apartment in a block of flats in Óbuda and not the price of a centre that is located in a busy area of Moscow that is one of the most expensive cities in the world. According to our sources the market rate would have been triple this price, consequently this is what the Hungarian state lost on this business (besides the Ministry of Foreign Affairs, the Ministry of Finance is investigating as well).

And who got possession of the block of houses in March 2009? It is not known, because the buyer is a mysterious company called Air Diamond that is registered in Luxembourg. A number of sources from the Ministry of Foreign Affairs mentioned the name of Viktor Vekszelberg to Heti Válasz. If it is true then this was not the first Hungarian business deal of the Russian multibillionaire. The Renova Consortium that can be linked to Vekszelberg bought the claim of the Hungarian state against Kazakhstan worth a hundred billion for only six billion HUF in 2006. But he did not manage to collect the debt either, so the Russian financier lost six billion on this deal - some cannot dismiss the thoughts that the Moscow business could have been the compensation of the Hungarian state.

In New York we face not the selling of a valuable real estate at a loss, but paying almost eight billion HUF. As it was published in Index, the Ministry of Foreign Affairs entrusted the representation of Hungary to an American lawyer in March in return for a 50% success fee. The 120 million USD rent claimed by New York for the office building - that also provided space for the UN Mission and the Hungarian consulate - was irrational according to jurists. The Americans wanted to receive money for such parts of the real estate that are exempt from taxation as they were used for diplomatic purposes. The city - as experts say - cannot sue for more than 40 million.

In any case, the lawyer entrusted by the Hungarian state came off well: he "got 80 million off" the price of the irrecoverable sum of 120 million only a few days earlier than the American Ministry of Foreign Affairs remitted the entire debt for Hungary. The Hungarian portfolio terminated the contract with the lawyer, but he claims that a house-painter must be paid even if after the work is completed the house is pulled down. Therefore he has good chances when claiming his 44 million USD (i.e. almost eight billion HUF) success fee and he has already sued the Ministry. Heti Válasz understands that the opposition members of the competent commission of the Parliament are only waiting for the end of the internal investigation of the Ministry, so they can start talking about the responsible people in secret sessions.

Péter G. Fehér 

The Hungarian communities living abroad heavily protested against the closing down of the Hungarian consulates in Sydney and in Toronto. The authorities simply overlooked the proposal of the Hungarians living in Toronto that would help save expenses. 

When Béla Kardos, president of the Hungarian Council of New South Wales, wrote a letter on behalf of the Hungarian community consisting of seventy thousand people to Péter Balázs, Minister of Foreign Affairs, in relation to closing down the Hungarian Consulate in Sydney, he did not even receive a reply. The majority of the Hungarian community in Australia lives in Sydney. The Hungarians living in the metropolis managed to collect six hundred signatures in favour of keeping foreign representation, but this was not enough. The closing down was criticized even by the Parliament of New South Wales and the European Australian Business Council. Béla Kardos tells our newspaper: justifying the closing down of the consulate in Sydney that has been operating for 42 years because of economic reasons is a deception. Withdrawal in fact costs a lot of money as the rented properties of the foreign representation - after being reconstructed according to EU-standards - must be restored to their original state. According to their calculations, closing down costs more than retaining the consulate, therefore with its narrow-minded decision the Ministry of Foreign Affairs does not save any money. The consulate that operates at the Hungarian Embassy in Canberra will only serve the needs of the smallest community of Hungarians living in Australia. For those living in Sydney it means travelling 300 kms, surmounting a day's traffic difficulties. As many people will not undertake this burden, maintaining institutional contact with Hungary will become impossible.

The Hungarian community in Canada was astonished to hear that the Hungarian consulate in Toronto will be closed down - says Rózsa Dancs to Heti válasz, the press director of the Hungarian Cultural Centre operating in the metropolis. The majority of the Hungarian community, consisting of almost 270 thousand people, lives in Ontario State, whose centre is Toronto. Most businessmen coming from Hungary also live in the city and its surroundings. This community needs the consulate in Toronto in order to maintain its relation with the old country. Rózsa Dancs states with regret: although the Hungarian Cultural Centre offered to the Hungarian government to provide office space for them in the building of the Hungarian House, the Hungarian authorities did not even send them a reply.