(Bloomberg) -- Hungarian Prime Minister Viktor Orban scored a crushing election victory to clinch a fourth consecutive term, overcoming criticism about democratic backsliding, his lukewarm support for war-ravaged Ukraine and close ties with Russian President Vladimir Putin.
Orban's Fidesz party maintained its two-thirds parliament majority in Sunday's election, results showed with almost 99% of the votes counted. That defied polls that had predicted a close race after opposition parties united to oust him as the European Union's longest-serving leader.
A far-right party, Mi Hazank, which had campaigned against what it described as a “Covid dictatorship” following five waves of the coronavirus pandemic in Hungary, also unexpectedly cleared the parliamentary threshold, reflecting a broader shift to the right among Hungary's voters.
Since 2010, Orban has challenged the EU's democratic foundations by consolidating of power in what he's called an “illiberal democracy,” raising questions about his allegiance to western values. His clear victory exposed the difficulty the bloc has had in dealing with member states who defy its rule-of-law standards and veer from their peers on key geopolitical issues such as Ukraine.
“We scored such a huge victory that it was visible even from the Moon, but certainly from Brussels,” Orban told cheering supporters in Budapest after the vote. His pro-Russian ally in EU-aspirant Serbia, Aleksandar Vucic, won a second term in a presidential election held the same day.
The war in Hungary's eastern neighbor upended the election campaign, forcing Orban to walk a political tightrope. He tried to distance himself from Putin by condemning Russia's actions and backing EU sanctions against his regime. At the same time, Orban limited support for Ukraine, refusing to let weapons shipments cross Hungary and rejecting a ban of Russian oil and gas imports.
His message -- heavily supported by pro-Orban media outlets that he has transformed into the EU's biggest propaganda machine -- was that joining a rush by fellow EU and NATO members to aid Ukraine with weapons would drag Hungary into the war. That resonated with voters against an opposition campaign suggesting that Orban is Putin's pawn and the ballot a choice between East and West.
Political Chameleon
The campaign showed off political instincts that have helped Orban become the dominant politician of his generation. He morphed from a liberal anti-communist student leader in the 1980s to a center-right conservative before landing on the nationalist fringes of European politics. But his ability to defeat opponents also masked bigger problems.
Record pre-election spending coupled with the fallout from the war in Ukraine, which prompted the government to cut the economic growth outlook, will require Orban to almost immediately address budget concerns. Phasing out price caps on basic food items and especially fuel, imposed in the run-up to the vote, will test his enduring popularity. Household energy subsidies, in place since 2013 and a reliable vote-getter, may also have to go.
The political challenges could be equally daunting. While the cost of financing Hungarian debt has soared as the central bank hiked interest rates to the highest in the EU, Hungary's access to billions of euros of crucial EU funding has been delayed due to concerns over corruption in Hungary.
Since Orban returned to power in 2010, Hungary has fallen down Transparency International's annual Corruption Perception Index rankings to rank only above Bulgaria among the 27 EU states. Freedom House, meanwhile, has downgraded Hungary from a full-fledged democracy to a “hybrid regime.”
Referendum Flop
He will also need to navigate a new EU mechanism that links funding to adherence to rule of law. It was approved in 2020 after the Hungarian premier outmaneuvered the bloc's concerns about the rollback of democratic norms for the better part of the decade. Should it be activated this year, it threatens to deprive Hungary of as much as $40 billion.
Coinciding with the general election, Hungarians also voted on a national referendum Orban called as part of his fight with the EU over LGBTQ rights. The outcome was non-binding because less than half of the eligible electorate cast valid ballots.
Still, more than 90% of the votes backed the government's “no campaign” to four questions, including whether they agreed to the “marketing of gender change procedure to minors.” In the past, Orban's government has used invalid plebiscites as justifications for policy moves.
Unlike before, Orban may no longer may be able to count even on his closest EU allies. His most outspoken critics, in fact, have been Hungary's regional peers including Poland, whose president warned Orban that his policy toward Ukraine would end up being “very costly” for him.
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