Budapest’s streets saw a splash of colour this weekend, as the city’s Pride march went ahead without the usual barrage of government interference. For a nation increasingly defined by its prime minister’s illiberal crackdowns, this was a notable departure. The UK, eager to brandish its post-Brexit moral compass, issued a statement backing ‘civil liberties’ in Hungary. But let us not get carried away by symbolism. This is a single data point in a worrying trend of democratic backsliding.
Orbán’s government has spent the last decade consolidating power, muzzling the press, and rewriting the constitution to entrench Fidesz rule. The anti-LGBTQ+ legislation passed in 2021, which banned ‘promotion of homosexuality’ to minors, was the latest salvo. It turned Pride into a political battleground. That the march was permitted this year is less a sign of softening and more a tactical retreat. The regime knows that a full ban would trigger EU sanctions and alienate investors. Capital has a vote, and the forint has been feeling the heat.
The UK’s support, while welcome, rings hollow. London has its own battles with political correctness and cancel culture, but that is a separate column. What matters here is the signal. Britain is trying to position itself as a champion of liberal values, even as it negotiates trade deals with autocracies. The Treasury would do well to note that markets reward consistency. Hungary’s bond yields tell a story of risk. Investors are pricing in a premium for Orbán’s unpredictability. The 10-year yield sits above 6% compared to Germany’s 2.5%. That spread is a tax on Hungarian growth.
Pride is a barometer of societal tolerance. But the real test will come with the next election. Will Orbán allow a free vote? Will the opposition have airtime? The City of London watches with a mix of horror and opportunism. Capital flight from illiberal states has been a boon for asset managers, but it is a symptom of a deeper rot. Fiscal responsibility is not just about budgets; it is about the rule of law. Without it, the bottom line suffers.
For now, Budapest has its parade. The UK has its statement. But the gulf between rhetoric and reality remains wide. We should celebrate the small victories, but keep our eyes on the spread.
