To Viktor, no spoils: Hungary’s new start

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1:45The Economist.

1:52Hello and welcome to The Intelligence from The Economist. I'm Jason Palmer.

1:56Rosie Blau:And I'm Rosie Blore. Every weekday we provide a fresh perspective on the events shaping your world.

2:06Britain's dairy farmers are suffering from too much of a good thing. Milk production is through the roof, even as demand is declining. We ask why, instead of turning it into cheese or yogurt or milk powder, many farmers are simply pouring it down the drain.

2:23Rosie Blau:And decades on, Cambodia is still strewn with landmines and unexploded bombs from the Vietnam War and Khmer Rouge era. Destroying them is dangerous and time-consuming. Now it's found a novel method.

2:44Rosie Blau:First up, though.

2:56Rosie Blau:Last night, jubilation on the streets of Budapest. Viktor Orbán, whose corrupt and increasingly autocratic Fidesz party has ruled Hungary for 16 years, lost yesterday's election.

3:17Rosie Blau:The result is painful for us, but clear, Orbán said in his concession speech. The opposition Tisha party under charismatic leader Petr Mazjar won a thumping majority. This is an election with consequences far beyond the country's borders, and Hungarians have overwhelmingly voted for change. This is an extraordinarily significant election, and people in Hungary who backed the opposition are elated. Matt Steinglass is The Economist's Europe editor. Viktor Orban has been running this country for 16 years, and there was no certainty as of yesterday as to whether he would actually lose the election.

4:07He did. They have a new government led by a young upstart, and people are extremely excited.

4:15Rosie Blau:Matt, you're in Budapest. Give us a rundown of the election results and how it feels to be there. Turnout in this election was 77%, which is the highest it's ever been since the end of communism. The city of Budapest feels like a weight has been lifted off of it after 16 years. Viktor Orban won four consecutive elections. The city has always leaned towards the opposition. It's a liberal city. Orban is famously illiberal and pronounces himself so. In the countryside, it wasn't certain until the last minute how the vote was going to go. What we've seen is that people in rural areas seem also to have been fed up after 16 years of Orban's rule, particularly with corruption, the shift towards Russia.

4:54I think what people all over Hungary can agree on is that this election means the possibility of change after 16 years of the same party and the same man running the show.

5:05Rosie Blau:Madja has won a thumping majority. Just explain the significance of that and what it means he can do, what he stands for. Hungary's electoral system is very complicated, and it's complicated in part because Viktor Orban made it that way in order to give his own party advantages. And that means that you can't tell necessarily what the size of the majority is just by looking at the percentage of the vote. Madjar is won by, it looks like, 54 % to 38%. In parliament, it looks like that will give them a two-thirds majority. And it's crucial to have a two-thirds majority because it means you can change the Constitution.

5:38That may sound worrying to people who don't like the idea of a country who can change the Constitution too easily. But Viktor Orban has been changing the Constitution for the last 16 years to give power to his own party. And in order to govern effectively, you need to be able to override some of those constitutional changes that he's made. One of the analysts I talked to said, the constitution is full of poison pills. There are officials who have the ability to veto your program. Fidesz has control over the courts. All of this kind of stuff needs to be rolled back in order to enact your agenda.

6:07And everybody was conscious of this in Hungary. When I was going around after the win last night in Budapest, one of the chants that people had was two-thirds, two-thirds. because that was the target they had set themselves to change the country.

6:26Rosie Blau:When we spoke last week, you talked about the fact that Hungary's economy was in trouble, and that was one of the things potentially shifting people's views. So was it the economy that ousted Orbán, or was it an actual rejection of his corruption and autocracy? At the beginning of this campaign, we thought that the big issues were going to be poor economic performance, and deterioration of social services. Those were the issues that Peter Magyar was concentrating on because he wanted to avoid seeming like a cosmopolitan foreign liberal who was all concerned about things that don't really matter so much to ordinary voters.

7:01But over the course of the campaign, things really started to shift. Corruption has been a major issue from the start. That's the reason why Peter Magyar is a huge personality. He went viral with videos denouncing the corruption of the regime. He used to be a member of Fidesz, and he turned against the party and told the inside story about how corruption works. What we found talking to people around the country over the last couple of weeks is that people were much more concerned than we had thought about the country's shift towards Russia. They were concerned about a turn away from the European Union.

7:29And that really resonated, but it resonated more than I expected. I was hearing from people who you wouldn't expect to hear it from that what they cared about was that the country was trying to be part of Europe and not turns towards Russia. Mr. Oban told before that who is not with us is our enemy. What we are talking about, enemy, in the same country, in a country that we're struggling and waiting for decades to have the opportunity to join the Western part of Europe. I think that it wasn't as much of a pocketbook election as anybody had expected. I think it really has a significance for the country's place in the world.

8:08Rosie Blau:And what is the significance of Hungary's place in the world? What will the ousting of Orbán actually mean beyond Hungary? Hungary has become a thwart inside of the EU. Orban has used his veto in the European Council to try to block European Union sanctions on Russia and stop aid to Ukraine. Things like that have become an enormous hassle. And if Orban had retained power, people in major EU countries were saying they were going to have to change the EU system to figure out how to get around him. So from that perspective, just at a pragmatic level, this is very important in international relations.

8:40But I think there's also a tremendous significance for the symbolism of Orban as the most important international figure in international, national conservative, populist, far-right, MAGA-esque types of movements that we've seen coming up over the last decade. Orban is a hero to them, and his loss is both a blow to that movement and, to some extent, a blueprint for how you can beat those kinds of politicians.

9:04Rosie Blau:So what will this mean for Hungary going forward? Can they overthrow all the changes that Orban has made? Everyone in TISA is going to spend the next few weeks absolutely obsessed with trying to answer that question. We have our first round of meetings with the TISA inner core today, and they're going to outline how they think they can unwind 16 years of basically autocratic governance. Pec Magyar has promised that he will unfreeze EU aid. The EU has blocked possibly up to 20 billion euros worth of aid over the last few years because Hungary keeps on violating the rule of law, and they're not sure that that money isn't being spent corruptly.

9:40A lot of it is being spent corruptly. So the first thing for the economy and for the country is to get that aid moving again. But that depends on the relationship between the new government and Brussels. And the new government has some people in it who have plenty of experience in Brussels. What they need to do is try to make commitments that Ursula von der Leyen accepts quickly so that the money can start moving again. That will be very big news for the Hungarian economy. Some of the people celebrating in Budapest were celebrating the end of corruption. There was a woman at TISA's election rally who was holding a zebra balloon with a picture of Viktor Orban on the front of it.

10:13And that's a reference to the fact that Viktor Orban's father now owns this enormous Habsburg castle. One of his neighbors has a collection of zebras and other exotic animals that have been photographed running around. Everybody was laughing when they saw the zebra balloon. Everybody knew what it meant. And I want to let this zebra go when we have the result,

10:36Rosie Blau:to say goodbye for these years and for the struggle we had.

10:47Young people celebrating in the streets formed these kind of spontaneous cordons where cars would pull up, slow down as they went through, roll their windows down, stick their hands out and slap everybody's hands. it was just this extraordinary seat of celebration. And I think the country is in an incredibly optimistic mood.

11:07Rosie Blau:Matt, thank you very much. Thank you, Rosie.

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12:32states.

12:43I'm Johnny Crickmore, dairy farmer and cheesemaker at Fen Farm Dairy in Bungie and Suffolk. third generation dairy farm of which we have around 300 milking cows all our Montbelliard breed of French breed most known for our cheese barren by God.

13:07We've had many good farming friends over the years who've got out of cows out of dairy in our part of the UK farming is not easy as farmers we work seven days a week we're affected by weather which is completely out of our control and you only need the commodity price of something to go up or your price of milk goes down and it's sometimes the final straw and people just get fed up with it. Dairy farming's always been challenging, it always probably will be challenging. My name's Kelly Seaton, I'm a dairy farmer from the Shropshire-Cheshire border. Technically new to the industry so I married my husband nearly 14 years ago and fell in love with dairy farming.

13:48Some of the biggest challenges are that we are always going to be price takers within the dairy sector. We get an email every month that's the same whoever you supply your milk to telling you what you're going to be paid for your milk for the next month. So yeah we are selling milk at a loss at the moment at about 30.5 pence per litre. Back in September we're at 40.5 pence per litre. The challenge is always going to be that these difficult times seem to last longer than the good times. Britain is producing too much milk, about 13 billion litres in the year to the end of March, and that's about 5 % more than in 2024-25.

14:28Harry Taunton writes about Britain for The Economist. The problem with that surplus is that average prices for farmers have dropped by about 17 % since September, and that really hurts dairy farmers. Some are pouring the milk away because there's simply nowhere to take it and some are having to quit the business altogether. So why is there just so much milk around in Britain? It's a supply and a demand issue. So last summer prices for farmers were healthy but there was a drought last summer and when that drought forced farmers to replace the grass that they normally feed cows with with the nutrient rich feed that they usually reserve for winter, their better fed cows produced more milk.

15:07Cows are also much more efficient nowadays, believe it or not, than they used to be. So a cow today in Britain produces about twice as much milk as a cow from the 1970s. And there's a few reasons for that, mostly technological. So robotic milkers are much more common nowadays, and they're much more efficient than doing it by hand. So that means that the cows can visit the shed more often. It also means that between milking, they can relax more and more blood flows to the udders. And that means that, again, they can produce more milk. AI and wearable tech comes into it as well. So farmers increasingly using these AI systems that allow them to track the herd and to work out which cows are ready for breeding, which are the most efficient milkers.

15:44It also comes into kind of genetics and breeding the best cows possible. And what's the demand side of the equation? Dairy consumption is dipping in Britain as more Britons choose plant-based alternatives. Things like sugary cereals at breakfast, those have long been a vehicle for milk. Those have become less common too. So even in a nation of tea and coffee drinkers, where milk is the mixer of choice, there is a dip in our dairy consumption that affects the surplus. Because if there's no one to drink it, that milk's not going to go anywhere. And there really is nowhere else for it to go, no other way for it to be used?

16:17Well, of course, milk can be turned into butter and cheese and all sorts of dairy products. But with a surplus, you need the spare capacity to do that. And Britain lacks that spare capacity. Its cheese and butter makers are working at capacity. And unfortunately, that lack of demand and that surplus forces dairy farmers to kill Daisy. Beef prices are high and farmers need to make money. So there are ways, I guess, for the supply and demand to balance themselves out. But while that's being worked out on a farmer by farmer basis, where do you see the price going? Speaking to dairy farms, they're not optimistic going into the spring as cows head back outside and they're back on nutrient rich grass.

16:52They expect the price to fall further as more milk is produced. So that's bad news for dairy farmers. The dairy market is volatile by nature, and surpluses abroad don't help. So this isn't a problem unique to Britain. There is a surplus globally, and dairy farmers have a hard enough job already. Since 2019, the number of British dairy farmers has fallen by 20 % to about 7 ,000. Well, you can see why that might be the case. It doesn't make dairy farming sound like such a great gig. The good news for the industry is that British dairy does have fans abroad. So last year, Britain exported a record£2.2 billion, mostly to Europe.

17:27of dairy, 17 % more than the year before. And some farmers like Johnny, who we heard from before, have found clever ways of insulating themselves from market fluctuations. So I think it was going back now like nearly 18 years ago, I think I got so frustrated with the dairy industry and how it's sort of so tied to commodity prices. And I think from that point onwards, we've constantly been looking at ways of removing ourselves as best possible from the world of commodity. So electricity, we've been busy working at putting solar panels on our cow shed roofs over the years. So electricity, we've got down very low now.