The old yellow tram that trundles along the Danube towards the city centre is full to bursting. It is eleven at night and musicians with their instrument cases and their audiences are all cramming in. They are on their way back from the Palace of the Arts, a glistening building in the south of Budapest, where they have just celebrated Hungary's greatest living composer – in his absence, because the 85 year-old György Kurtag rarely leaves his village in France. His fellow composer Peter Eötvös conducted Kurtag's "Messages" for soprano and ensemble, a well-established classic, and Andras Keller, the first violinist of the famous Keller Quartet, was conducting 100 instrumentalists on this evening to erect the "Stele" from 1994, one of the most acclaimed contemporary orchestral works, which has never been played in Hungary before. It is doubtful whether it will be heard again any time soon.

Currently Kurtag's funeral music "Stele" is in danger of becoming the swansong to one of the richest cultural scenes in Europe. The Concerto Budapest, which is performing it, has lost its principle sponsor and is pinning its hopes on help from the state. But this is completely unpredictable at a time when all number of musicians in Hungary are being hit by drastic cost cutting, as well as theatre and film people. This is related to the cost cutting by the European Union whose presidency has been Hungary's since January. But the cuts are inextricably bound up with the politics of a conservative verging on nationalist government, with the crackdown on the critical filmmaker Bela Tarr, with the flagrantly political motives behind the persecution of liberal philosophers as "money wasters" and the hatred which one of the world's most acclaimed Hungarian musicians encounters in his homeland.

Andras Schiff who lives in Italy is one of the world's top pianists. He was already being taught by Kurtag at the age of 14 in Budapest, and moved to Italy while the country was still under communist rule. It was from there that in 2101 he wrote a letter to the Washington Post criticising the restrictions on freedom of the press under the new government and the anti-Semitism and nationalism in his homeland. "Many people are scared," he explained. In the Hungarian paper Magyar Hirlap one of Viktor Orban's comrades, Zsolt Bayer, then responded with an invective against the critics of Hungarian politics, listing a string of Jewish names. He described the Guardian's Nick Cohen as "stinking excrement" and the names Cohn-Bendit and Schiff followed, along with the sentence: "Regrettably we did not manage to bury all of them up to their necks in the woods of Orgovany."

Although every Hungarian knows that in 1919 in this forest at least 300 leftists and Jews were tortured and killed by officers of the last "Admiral" Miklos Horthy. "Bayer's comment means because we failed to kill enough Jews then, we have their successors at our throats now," says the Hungarian conductor Adam Fischer. Imagine if a friend of Angela Merkel's had published words to similar effect in a German paper – if you could find a paper that would publish such a thing, that is. Guttenberg's doctoral games (more here) would pale beside the storm of outrage and horror that would ensue. Not a word was said about it in Hungary though. And anti-Semite Bayer was even awarded a major literary prize for former publications. The pianist Andras Schiff, whose family lost many members in Auschwitz, is still waiting for an apology. Instead, a Hungarian court recently ruled that the Nazi film "Jud Süß" is "un-ideological." The ruling answered the question of whether it should be allowed to screen the propaganda film in public outside of an academic context.

Schiff doesn't want to perform in Hungary for the time being. "A performance there could be very unpleasant for me and I don't want to have to go around with bodyguards," he said. What is happening in Hungary under the Orban government is particularly conspicuous among musicians because, not requiring translators, they have a strong and quite numerous presence abroad – thanks to a particularly high density of geniuses for a country with a population of just ten million. And because musicians don't keep their mouths shut once success gives them independence. Together with Andras Schiff and other artists and intellectuals such as philosopher Agnes Heller and filmmaker Bela Tarr, the conductor Adam Fischer reacted to the incendiary article by launching a petition (here in German) to all the artists in the EU and beyond to "guarantee moral fundamental rights in Europe". That the anti-Semitic commentator Bayer is still a member of the governing party is, Fischer says – also in Hungarian papers – a scandal.

Fischer has been known in Germany for many years as the chief musical director in Mannheim and for his celebrated conducting of the "Ring" in Bayreuth 2001. Until last September Fischer was the head conductor in the Budapest opera. The new government did not fire him but has replaced his luckless intendant with a man loyal to Orban, as has been the case with so many other heads of state institutions: the media, museums, theatres, research institutes... Fischer, whose innovative course was not popular anyway in the house, saw no other option but to resign voluntarily. The contract of the artistic director and film director Balazs Kovalik had already not been renewed on the behest of the government.

Here too the sort of theatre that Kovalik dared to practise had little to do with classical directing. His "Mefistofele" by Arrigo Boito features a circus-like set with contemporary props, dry ice envelops the table dancers, elevated podiums are in permanent use, and the characters are like woodcuts: the devil hides in a European flag as the audience howls with laughter. "Modern but much too costly," says the new director Adam Horvath, formerly a singer in the in-house ensemble. Directors like Marco Arturo Marelli are more his thing: "Contemporary but still very aesthetic." And he is looking forward to Achim Freyer's magical imagery who is about to put on the "Ring". Does the ministry, which appointed Horvath as director, also have a say in the artistic direction? "Not at all, we are independent! But we have to stick to the budget. Which is why directors should stay 60 percent within the borders of what most opera goers expect." This he refers to as "traditional in a good way."

The official cultural industry has always been conservative. There was a "black hole" yawning around Gyorgy Ligety, one of the 20th century greats, in his day, says composer Peter Eötvös, whose own music is played everywhere except in his homeland. The government invented neither traditionalism, nationalism nor anti-Semitism, nor did it come up with the practice of filling important posts with its own people. "It is a paternalistic society and the socialists probably didn’t make things any better. But they were more frightened," according to conductor Adam Fischer. "The problem with Orban's bullheadedness is that the people think it's normal." Normal that a law with elastic articles paralyses the journalists; normal that civil servants can be fired without giving a reason?

"The country is now in danger of sinking into a nationalistic dictatorship," conductor Ivan Fischer recently told the Frankfurter Allgemeine Zeitung. Like his brother Adam, he is also active in the West but unlike him he has an orchestra in Hungary with which he also travels. The Budapest Festival Orchestra is the symphonic ambassador of the country and plays everywhere from Los Angeles to Tokyo. After Fischer gave his interview, 17.5% of the state subsidies, until that point four million euro, were axed. A political punishment? The conductor cannot "believe such a thing could be possible." The fact that now the Hungarian National Philharmonic, which rarely plays internationally, is now getting double the amount that Fischer lost, makes him happy to some extent because "every penny that is spent on music is desperately needed in Hungary." But he is also distraught. All his inquiries with the authorities have been ignored.

But he is still refusing to keep quiet. "Either you have freedom of opinion in Hungary or you don't. There is no such thing as a grey area here. If there is no freedom of expression, we must leave the country immediately." He already has a foot in Berlin, and will be head of the Konzerthausorchester as of the autumn. In Budapest, in the meantime, he is acting as if he is in a European democracy. Although he does point out that this is a very different sort of democracy. Many people still feel the "national wounds" from Hungary having lost so much territory after WWI. After WWII came a communist dictatorship; the Holocaust, in which Hungarians were also involved as perpetrators, was regarded as a "purely German affair" (Imre Kertesz). And in the democracy that followed 1989 many people saw a "post-communist nomenclature" in power, which set about plundering the land just as much as the hoodlums from the West. And now, in a Europe of open borders says Ivan Fischer, "it is difficult to keep up." Fertile ground for paranoia that has a long tradition. "The world is against us."

With 53 percent of the votes the conservative Fidesz party won two thirds of the seats in parliament, the right-wing extremists from the "Jobbik" gained 17 percent and the population is polarised. On one side are people like Fischer who "want to see Hungary connected with the western world," on the other, those who voted for "the system of national unity". But anyone who is expecting the leaden atmosphere of a nascent dictatorship on the Danube will be surprised to find a Budapest that makes Berlin almost seem a little depressing. Alleys at night where there is nothing to fear, funky bars where English is spoken as a matter of course. The opera and concerts are attended by thoroughly mixed, thoroughly intelligent audiences who enthusiastically celebrate Ivan Fischer's brilliant, inquisitive interpretation of Schubert's great symphony in C major.

"Budapest is shimmering with culture, it is a European gem, something of an East European Paris. And in the midst of it are the authorities who just don't get it. It was always like that," says Fischer. "And on top of all that you have the enormous pressure from Europe to save money. This culture needs a Marshall Plan if it is to be saved. No joke." But help, especially help from outside, Peter Eötvös points out, has a particular aftertaste in a nation which for centuries defined itself against powerful rulers, against Tartars, Turks, Habsburgs, Russians.

It would be nice to find out from State Secretary Geza Szöcs, who is responsible for culture, what he thinks about the concerns Ádam Fischer, Andras Schiff and the other signatories of the petition – who were followed by celebrities like Elfriede Jelinek, Jürgen Habermas, Daniel Barenboim. And whether, after the film business has been centralised, the music business will follow. And what his aims are for culture.  Each of his three email addresses seem to lead to dead mailboxes, although he does have time for confronting one film director. Bela Tarr, who was awarded the Jury Grand Prix at the Berlinale for his film "The Turin Horse", told the Tagesspiegel candidly: "It's the government that has to go, not me," that censorship is happening and that the state funding pledges are "nothing but toilet paper." After a phone call with Szöcs, Tarr explained in Hungary that he was distancing himself from the interview, that it was spoiling the success of his film. "I neither fight like this nor talk like this." The Budapest premiere of his film, planned for this Thursday, has since been cancelled.

Perhaps, then, people are better off "talking under the tablecloth."  As Peter Eötvös says: "We were doing this in the 50s, it happens automatically, we are old hands at it, it’s a fine art in this country." He laughs about it as if it were some family eccentricity. Although Eötvös' music is not played in Hungary, he returned to Budapest from the Netherlands, yearning for the language, the theatre. There are 200 theatres here. Some of them are on the brink of closure; the others are gradually getting bosses who toe the party line. The intendant of the National Theatre, Robert Alföldi, is under the most pressure. The far-right is accusing him in parliament of homosexuality (more here), protesting against him in front of the theatre. "He is wonderful," says Eötvös, "he makes world theatre. And he has increased audience numbers which is protecting him." And the media? "They are acting cautiously..."

Lots of people are acting cautiously and no one has noticed this more acutely than pianist Andras Schiff. After the attack on him "not a single musician has said out loud: wait a minute, that's going too far. They are silent because they are scared. But you don't have to be that scared; it's not 1933. Silence is consent, no?" Of course none of Budapest's musicians remain silent if you ask them about the inflammatory article directly. "You shouldn't be allowed to print such a thing in a newspaper," says one, but he doesn't see why the pianist should fear for his safety in Budapest. "Do you sense anti-Semitism here? It's not something you feel in everyday life." "Terrible," another one says, but he did add that Schiff's criticism was "unfortunate."
And everyone here wants to authorise their statements before this article goes to print which in Germany is only normal with direct Q&A interviews.

"It can have wide reaching consequences for me," one person I talked to said, explaining his caution. Being able to make provocative statements without having to fear professional consequences – is starting to feel like a privilege and not a European norm.

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This article was originally published in Die Zeit on 14 March, 2011.

Volker Hagedorn is a freelance journalist and musician who lives in Berlin.

Translation: lp