Fidesz’s grip on Hungary will weaken in 2022

Significance

After years of being on the losing end of an electoral system crafted by ruling Fidesz to favour large, unitary blocs, the opposition is marching towards unity. Although Fidesz’s path to victory in 2022 is still wider than that of the opposition, whoever wins, the era of stability that began in 2010 will end next year.

Impacts

• A sharp fall in political stability and predictability will put strong downward pressure on the forint and raise borrowing costs from 2022.
• Orban’s weakening would spell the end of Central Europe’s Eurosceptic pole, and reduce opposition to Franco-German EU integration efforts.
• The United States and Western Europe will ramp up criticism of Orban and indirect support for the opposition.