Europe cheers Orbán defeat – but Hungary’s future remains contested

The ousting of Hungary’s conservative nationalist leader Viktor Orbán is being hailed as a victory for liberal democracy and the European Union.

The leaders of Poland, France and Germany, and European Commission President Ursula von der Leyen, were among the major EU figures to congratulate Prime Minister-elect Péter Magyar on Monday, after he won a decisive victory in the country’s election on Sunday.

The ousted Prime Minister made regular use of Hungary’s veto power to block EU decisions, fiercely criticized the bloc and impeded assistance to Ukraine in support of his ally Vladimir Putin — notably obstructing billions of dollars worth of loans and funding to Kyiv.

EU critics also say the 62-year-old’s creation of Hungary’s “illiberal state” stepped on rule-of-law commitments the country made when it joined the bloc.

Von der Leyen said: “Hungary has chosen Europe. A country reclaims its European path. The union grows stronger.”

Financial markets also appeared to lend their approval, with the Hungarian forint hitting a four-year high and 10-year government bond yields plummeting up to 50 basis points on Monday morning.

Both the Kremlin and White House had valued Eurosceptic Orbán as a kindred spirit ideologically and a thorn in the side of the EU.

Orban’s Hungary had acted as a blocker to EU decision-making and policies on immigration, energy and funding for Ukraine.

His ousting and election loss to the 45-year-old Magyar — a former member of Orbán’s Fidesz party until he founded the center-right opposition Tisza party just two years ago — will be seen as a blow for both Moscow and Washington. The U.S. sent Vice President JD Vance to Hungary in a show of support for Orban immediately before the election.

Timothy Ash, senior emerging markets sovereign strategist at RBC BlueBay Asset Management, said the “winners” of the Hungarian election are “Hungary, Europe, Ukraine, the little guy.”

And the “losers”? “Trump, Putin, Vance, the big guy,” Ash told CNBC by email.

The White House is yet to comment publicly on the election result. A Kremlin spokesperson said Moscow respected the election result and would work for “pragmatic ties’ with the country’s new leadership.

A clear majority of Hungarian voters had rejected Orbán’s “illiberal democracy, his anti-EU antics and his pro-Putin leanings,” Holger Schmieding, chief economist at Berenberg Bank, commented Monday.

“No European policymaker had done more to weaken the internal cohesion and the external influence of the EU over the last five years than Orbán,” Schmieding said, citing the prime minister’s attempts to soften…