Hungary's Orban bets on growing anti-immigrant tide in latest EU standoff

By Krisztina Than BUDAPEST (Reuters) - The European Parliament's vote to punish Hungary for flouting democratic standards works in Prime Minister Viktor Orban's favor by letting him pose as a champion of national sovereignty against a remote Brussels elite as EU elections loom next year. His typically feisty performance before EU lawmakers has boosted Orban's standing among nationalists at home and also among anti-immigrant parties that are expected to increase their presence in the next European Parliament (EP). And with Hungary's regional allies Poland and the Czech Republic offering to shield it against any EU sanctions, Orban's gamble is likely to pay off - although his Fidesz party may end up having to quit the conservative European People's Party (EPP), currently the largest grouping in the Parliament. In an unprecedented move on Wednesday, more than two thirds of EP lawmakers voted to sanction Hungary due to concerns over Orban's pressuring of courts, the media and non-government groups and his refusal to take in migrants. Addressing the EP on Tuesday, Orban made clear he would not abandon his hardline stance on the mostly Muslim migrants who have come to Europe since 2015. He has previously said they pose an existential threat to Christian civilization. Cheered on by far-right parties, Orban said he rejected "the blackmail, the slander and fraudulent accusations leveled against Hungary and the Hungarian people by the European Parliament's pro-immigration and pro-migrant forces". Echoing that line on Thursday, the pro-government daily Magyar Idok said: "Pro-immigration forces took revenge with a fraud." Orban, whose right-wing Fidesz party has governed Hungary since 2010 and was re-elected in April for a third consecutive term on a strongly anti-immigrant platform, is playing a long-term political game in Europe. "We hope anti-immigration forces could even gain a majority in the European Parliament to be elected in 2019... but at least there will be a strong shift, with the anti-immigration forces gaining ground," Orban's chief of staff Gergely Gulyas told a news conference on Thursday. Fidesz looks likely to perform well. The latest opinion poll, published by pro-government think-tank Szazadveg, put its support at 36 percent in early September, with nationalist opposition party Jobbik second at 8 percent. As in some other EU countries, the center-left has been largely marginalized. "REPUTATIONAL DAMAGE" Theoretically, the EP vote could end with Hungary losing its EU voting rights - but both Poland and the Czech Republic vowed on Thursday to veto such a move, saying it would increase voters' dissatisfaction with Europe. Some analysts cautioned, however, that the EP move against Hungary could erode its attractiveness over time as a target for investment. "Although we don't see any short-term direct economic consequences from the move, the reputational damage to Hungary and Prime Minister Viktor Orban could affect investment and rating decisions," ING analyst Peter Virovacz said in a note. Orban has often been in conflict with Brussels over his policies but has sometimes tweaked controversial legislation in the past in order to reach a compromise. His refusal to budge this time cost him support in the EPP conservative grouping, which includes German Chancellor Angela Merkel's Christian Democrats, who have criticized some of Orban's policies. Following Wednesday's vote the EPP may consider whether to eject Fidesz, though that would be a difficult procedure. Orban said in June he would prefer Fidesz to stay within the grouping and try to reform the EPP from within. "In relation to the 2019 elections to the European Parliament, it would be easy to, say, establish a new formation from like-minded Central European parties – or, indeed, a pan-European anti-immigration formation," he said. "Instead of desertion, we should take on the more difficult task of renewing the European People's Party, and helping it to find its way back to its Christian Democratic roots." EPP leaders, including Merkel, are due to meet for a dinner in the Austrian city of Salzburg on Sept. 18, the eve of an EU summit, but at this stage no discussion about removing Fidesz is on their agenda, one EPP official said. Agoston Mraz, director of Hungary's pro-government think-tank Nezopont, said Orban still did not want to leave the EPP. "The strategy is that he tries to do something within the EPP. If push comes to shove and they try to squeeze him out, or suspend Fidesz' membership, that would create a new situation," Mraz said. "We will see what the coming months bring." (Additional reporting by Robin Emmott in Brussels; Editing by Gareth Jones)