Hungary’s Magyar: Taking inspiration from the Austro-Hungarian Empire to build a Central European bloc

Key Takeaways:

●      Magyar’s speeches and statements after being elected Hungary’s new Prime Minister, effectively ousting Viktor Orbán, reflect an eagerness to cooperate with Austria economically and politically.

●       Magyar’s accession reflects Central European nations’ goal to create an informal alliance to strengthen their presence in the European Union.

Restoring the Austro-Hungarian Empire?

Prime Minister-elect Péter Magyar’s victory in Hungary’s recent parliamentary elections relied on a promise to rejuvenate the country’s relationship with the European Union (EU). Recent statements from Magyar indicate he aims to achieve this through a renewed Central European bloc, focusing mainly on building strong economic links with Austria. In a statement remembering the Austro-Hungarian Empire, following Magyar’s victory over Viktor Orbán, Magyar said that he “would like to strengthen the relationship between Hungary and Austria for historical but also for cultural and economic reasons.” So far, Magyar has repeatedly referenced the potential for developing Austro-Hungarian relations, and more symbolically, he plans for his first trips as the new political leader to be to Vienna and Warsaw.

Analysts are optimistic about a possible Austro-Hungarian rapprochement. The two countries have a shared experience of transitioning back to a liberal democracy, and Austria’s conservative-led government could encourage stronger ties with Hungary as a centre-right government. Austria and Hungary also already see strong economic linkages, with Austria being the second biggest investor in Hungary after Germany. Both countries have additionally enjoyed strong economic relations since the fall of communism, marked by intensive investment and foreign trade, and Hungary is a prominent investment location for Austrian companies to invest in and implement their facilities, in the construction, paper, sugar and brick production, real estate development, and automotive industries. Business-adjacent services are also impacted by the increased activity from Austrian companies in Hungary, such as lawyers, HR consultants, tax advisors, advertising agencies, engineering and planning offices, and more. Conversely, from Hungary to Austria, transferring service providers are largely in the IT and transportation sectors.

Magyar could also be inspired by the leadership of Polish Prime Minister Donald Tusk and his work in restoring a liberal democracy after years of populism. One of his priorities may be securing EU funds after a lock was implemented over rule-of-law concerns. This includes the release of €18 billion in frozen EU funds, as well as securing €16 billion in European defence loans and putting an end to the €1 million per day fine over non-compliance with an EU migration law.

Magyar and Establishing a Central European Bloc

Establishing a Central European bloc today is not an implausible goal: Central Europe is made up of states of relatively similar size and overlapping interests and goals. Additionally, they share right-wing policies, similar cultural perspectives and economic interests. They have a cohesive outlook concerning migration and energy security issues. Effectively, a comprehensive, informal alliance could increase Central Europe’s influence, voting capacity, and sway in the EU. However, apart from Poland, these countries have a history of preferring business relations with Moscow compared with other European countries.

A similar attempt spearheaded by Austria had been made to form an unofficial Central European alliance, called the Strategic Partnership in Central Europe. In the early 2000s, ahead of the EU accession by ex-communist states, Poland and Slovenia largely blocked the attempt, fearing a renewal of Austrian hegemony following the collapse of the Austro-Hungarian empire. However, today, Poland is more secure in terms of its military and economic capacities, and experts suggest it would be more open to an alliance today.

Planning Ahead

Some of Magyar’s plans include merging the Visegrá Group, an unofficial alliance between the Czech Republic, Hungary, Poland, and Slovakia, with the Slavkov format, a cooperative structure between Austria, Slovakia, and the Czech Republic. The region’s transnational companies and interconnected nations are set to grow closer in the next few years, likely oriented towards increasing trade, security, and strengthening a pro-EU culture. Magyar additionally worked as a diplomat for the EU for almost a decade under Orbán, and has a strong understanding of EU mechanisms. His experience and knowledge of a united Central European front and integrated proposals and projects could lead to an inclusive alliance and a more cohesive distribution of funds from Brussels.

Today’s main obstacle for a Central European alliance is the topic of Ukraine. While Austria and Poland openly advocate for EU aid and reject Russian energy, the topic is highly divisive among Central European nations. The countries still differ in their opinion about Ukraine acceding to the bloc, but do agree on economic initiatives and large-scale infrastructure projects in the country. As for Magyar, he is not likely to block aid efforts as Orbán did, but may follow the Czech Republic and Slovakia in not participating in the EU’s €90 billion loan package for Kyiv. However, his eagerness to level with the EU suggests Hungary’s reluctance to renounce Russia may be a subject of conversation in the future.