Populist Godfather Faces Test for Europe

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Hungary's election on Sunday is gearing up to be a bellwether for populism in Europe.

While Prime Minister Viktor Orban's Fidesz party has a wide lead in opinion polls, the surveys may be misjudging sentiment given what happened in the 2016 U.S. elections and the U.K.'s Brexit vote.

Unlike other kindred spirits that stormed to dominance recently like Austria's Freedom Party or the League and the Five Star Movement in Italy, Orban has been in power since 2010. In that time, he's created an “illiberal state” modeled on Russia by eliminating checks and balances.

Pairing that with a campaign blaming billionaire George Soros for immigration has made him a populist icon from Poland to France. But his efforts to overhaul courts, take control of state media and let oligarchs dominate the economy may have damaged his political brand. A poll this week showed a plurality of Hungarians want him out, and a united opposition in February defeated his mayoral candidate in a city Fidesz has dominated for two decades.

Unfortunately for the opposition, they haven't brought that unity to the national level — that means Orban may be gifted another four years to shine as the poster boy for Europe's populists.

Global Headlines

Trade maneuvering | The world's two largest economies look increasingly like they're hurtling toward a full-blown trade war after U.S. President Donald Trump ordered his administration to consider tariffs on an additional $100 billion in Chinese imports. The directive, which sent U.S. stock futures tumbling, comes as representatives from Mexico, Canada and the U.S. are set to meet today in Washington amid growing signs of optimism about a Nafta breakthrough. 

Fresh trail for Mueller? | Special Counsel Robert Mueller gave lawyers for former Trump campaign chairman Paul Manafort a sign yesterday that his probe into Russian election meddling may be headed in a new direction, David Voreacos exclusively reports. Mueller revealed that he'd obtained a search warrant for information about five telephone numbers, stoking questions about whether Manafort could face still more charges.

Catalan setback | A German court dealt a blow to Spanish efforts to move on from separatist drama yesterday when it threw out a request to extradite the exiled Catalan leader for rebellion. While Carles Puigdemont could still be sent back to Madrid to face lesser charges, images of him leaving custody will embarrass Prime Minister Mariano Rajoy and encourage the pro-Catalan parties that have paralyzed both the national and regional parliaments since October's clampdown.

Another head to roll? | The energy lobbyist whose wife leased a bedroom to U.S. Environmental Protection Agency Administrator Scott Pruitt last year had a roster of clients with business before the EPA, handing ammunition to critics who are demanding that Pruitt be fired. Trump publicly defended Pruitt yesterday, saying he'd been “very courageous” in the face of mounting ethics questions.

Italy on first base | Italian President Sergio Mattarella drew a blank with his first attempt to break the political deadlock produced by last month's election. No party leader was able to show they could command a majority during talks in Rome yesterday, even though the two populist groups, Five Star and the anti-immigrant League, are inching closer to an agreement. A second round of consultations will be held next week.

What to watch:

• The Trump administration as soon as this morning could announce plans to impose sanctions on Russian tycoons under provisions of a law calling for retaliation against Moscow for election meddling.
• Palestinians and Israelis are bracing for fresh violence along the Gaza border today.
• Brazil's former President Luiz Inacio Lula da Silva has been handed an arrest warrant on a corruption conviction and must turn himself in by 5 p.m. local time.
• Malaysian Prime Minister Najib Razak's dissolution of parliament will take effect tomorrow. That starts the clock ticking on an election that will determine whether his ruling coalition can continue its six-decade run in power.

And finally... It's been a rough stretch for South Korea's former presidents. A Seoul court today sentenced Park Geun-hye — the Asian nation's first female leader — to 24 years in prison on corruption charges that prompted her impeachment and ouster last year. The verdict comes two weeks after her predecessor, Lee Myung-bak — a conservative from the same party — was arrested in a separate corruption case. 

To contact the author of this story: Michael Winfrey in Prague at mwinfrey@bloomberg.net.

To contact the editor responsible for this story: Karl Maier at kmaier2@bloomberg.net, Caroline Alexander

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