Orbán has begun taking steps to preserve his power
By Fábián Tamás –
With a year
left until what looks to be a tight election, the government is reallocating
considerable amounts of public assets away from the state and into, e.g.,
foundations. The goal could be to sustain Orbán’s “System of National
Cooperation” in the event that he should lose the 2022 election. However it may
turn out, does this mean that future governments will no longer have a say in
higher education? And what about the hundreds of valuable state properties that
were recently transferred? Are they destined to forever remain in the
possession of Fidesz loyalists? Opposition leaders don’t see the situation as
being completely hopeless. Translated by Dominic Spadacene.
the National Assembly is expected to pass a bill that would place 70 percent of
Hungary’s higher education under the auspices of foundations. At the same time,
the state would be effectively handing over billions of forints in public
assets to organizations led by Fidesz delegates, free of charge.
Even in the
bill’s wording, the legislator made no attempt to conceal the objective to
ensure the foundations’ independence from whatever government may be in power.
And with the 2022 elections coming up next year, it is difficult to interpret
this in any way other than Viktor Orbán ensuring that Fidesz can maintain
important positions in preparation for a possible defeat.
As a first
step following the law’s adoption, 32 public-interest asset management
foundations that will be carrying out public functions will be able to begin
operations. A detailed list can be found starting on page 19 of the bill, which
has been uploaded to the National Assembly’s website (pdf). As of April 20th, it included all
foundations that shall carry this classification from now on; however, the
situation is changing dynamically. In the meantime, for example, it was determined
that the foundation operating the House of Terror would also be entrusted with
the growing portfolio of foundations, it doesn’t seem so far-fetched that these
nearly three dozen foundations are just the beginning and that we may say quite
a few more such model changes during the time leading up to the elections.
to institutions of higher education, foundations will gain possession of
mansions, resorts, harbors, parks, estates, a theater, clinics, and shares in
various companies. For the time being, an exact listing is hard to come by
since it is not yet clear what assets each foundation will be receiving from
the state. One thing is for sure: hundreds of valuable properties are being
discussed, and, considering the shares of companies like MOL and Gideon
Richter, the combined stake is on the order of trillions of forints. (It’s a
bizarre situation, given that the state bought back the shares in MOL from the
Russians for hundreds of billions of forints in 2011, and yet now it can simply
give these shares away to a foundation for nothing. And by doing so, the
government gives up all formal control over the oil company.)
comes to functions, the foundation-based structure opted for by the government
outsources away from the state activities related to education, culture,
healthcare, agriculture, and memory politics.
point of this foundation-based structure – beyond the fact that each one will
be able to start operations with 600 million forints worth of public assets –
is that the state assets that are to be handed over to these foundations will
no longer be considered public capital in the classical sense. From here on
out, it will be the trustees appointed by the current government who will
administer the recently acquired state assets and also receive founder rights.
Further, the law prohibits the revoking of this provision, and most of the
regulations governing the operation of the foundations can only be amended by a
there is another bill before the National Assembly that, while independent of
the foundation-based structure, is still in line with the trend of slimming
down the state. Proposal T/15709, discussed in detail by András Schiffer on
24.hu, regards the establishment of the „Supervisory Authority for Regulated
Activities.” This new authority would oversee the tobacco trade, the gambling
market, judicial enforcement, the register of liquidators, as well as
concession-related tasks. The implication of this last item is that the
Concession Council would also operate under the new authority.
list itself, it’s clear that the regulation of industries that see the movement
of vast sums of money would come under the supervision of the new authority.
Furthermore, for the past few decades, the supervision of these activities have
fallen under the government’s judicial, financial, and economic jurisdiction.
And just like the Media Council and the Energy Authority, the president of this
institution would be appointed by the prime minister for a period of nine
A lot of money is needed to keep NER afloat,
particularly from the opposition
may be several reasons for establishing the foundations and the new authority,
they all point roughly in the same direction: reducing the scope of activity
for the next government – should the opposition happen to take it – and
maintaining Fidesz’s clientele.
past few weeks, there have been multiple speculations regarding Viktor Orbán’s
possible motivation. According to the commentaries, the precursor to the
current salvaging of wealth and power dates back to the end of Socialism in
Hungary in 1989, when the technocratic elite of the late Kádár period managed
to salvage their influence and continue to hold onto important positions for
decades. This is allegedly what led László Kövér [current Fidesz Speaker of the
National Assembly] to the conclusion that „we were in the government, but we
weren’t in power” following the first Fidesz administration (1998-2002).
to this logic, Orbán’s goal may be to make things more difficult for the next
government, should it end up in the hands of the opposition (just as the
Socialist-related elite did with him during his first term as prime minister).
It may also be to successfully maintain the network that has been loyal to him
and his party, even at a time when the streams of funds keeping NER alive would
be largely blocked off.
leaders on the boards of trustees of the public foundations – who currently
hold important positions in the administration as ministers and state
secretaries – are given tasks
all, monthly salaries in the millions (forints). As a result, it may be in
their interest to build out the System of National Cooperation even as
opposition, or at least to try to keep it afloat.
also have a need for Orbán’s emerging parallel state since a change in
government would lead to a mass of party loyalists leaving their posts in the
state administration, as was the case, for example, after the 2019 municipal
elections. If the government changes hands, that exodus would be significantly
larger, and keeping outgoing officials close to NER could be a serious
challenge for those currently in power.
unsettling for party loyalists
money to keep people on board, and NER’s operations are costing a pretty penny.
Take, for example, the media holding company made up of hundreds of
publications so loyal to Orbán, which, despite the seemingly endless stream of
state advertisements, managed to generate billions in losses in 2019. Operation
of the substantially streamlined version of the system (i.e., the retainment of
at least a portion of its personnel) requires significant and continuous
external funding, as most of the media outlets tied to Fidesz are not viable
from a market standpoint.
financial motivation is conspicuous also because while state universities were
subject to the public procurement obligation, the universities that are
switching to the new management model are exempt from it. As there are offhand
hundreds of properties, which in many cases are in need of renovation, these
sorts of projects will be possible to carry out in the future with minimum
transparency. First off, this poses a serious risk of corruption. Secondly, if
a construction company under NER falls from favor following a potential change
of government, even then it wouldn’t be entirely without work.
power move being made in preparation for possible foul weather also has a
psychological side to it that gives rise to some uncertainty. While it may seem
reassuring to its devotees and clientele that the Orbán administration is „so
wisely” planning ahead,
safeguarding of assets sends the very message that in 2022 not only is a Fidesz
administration with a two-thirds majority not in the cards but also that Orbán
will lose the election.
preparation for possible defeat can itself significantly undermine the appeal
of what earlier seemed to be an unquestionably strong leader. It can also
prompt the less devoted party loyalists in NER to start thinking about a plan B
or C. If you’re interested in why current forecasts indicate just as many
arguments both for and against Orbán winning the next election, we’ve discussed the topic before in
The opposition doesn’t see the situation as
to multiple perspectives from the government-independent public sphere, a
potential new government wouldn’t really know how to deal with the current
transfer of assets. Several politicians from the opposition responded to our
inquiries on the matter, saying that there are possible ways to resolve the
situation at hand.
As for the
universities, Deputy Speaker of the National Assembly Koloman Brenner said that
foundation-based structure is not intrinsically evil; however, if we look
beyond our borders, we see that large universities offering comprehensive
education programs are all supported by the state because this is the only way
they can maintain their extensive research and education portfolios. Jobbik’s
representative on educational matters stated that since the university senates
themselves decided to switch to the foundation model, it’s realistically
possible that following a change of government, in a year or two, the very same
senates (seeing the issues cropping up) may request to go back to being
state-supported, in the same way that they had initially voted for the
a conflict may arise at this stage, considering that the boards of trustees of
the foundations are primarily filled with Fidesz members. These boards are
essentially free to modify the scope of activity of the senates and, according
to certain interpretations, they can even revoke the right to elect a rector.
question is, if the board of trustees blocks the will of the very senate
representing the autonomy of the universities, or violates the rights of the
universities’ leadership, what sort of political consequences could there be?
politicians believe that with the way things currently stand, there are two
areas of concern with the privatization of higher education. One is that the
board of trustees, which is appointed by the current minister, can choose to
prolong itself practically for life. The other is that the switch back to state
support doesn’t happen automatically even if the university senate elects for
that option: the request requires a two-thirds approval by parliament.
the boards of trustees have a fairly extensive range of authority over the
institutions, the Higher Education Act can be modified with a 50% majority.
With this, it is relatively easy to ensure the enforcement of student and
teacher rights by such legal safeguards, stated Member of the National Assembly
to the Democratic Coalition politician, even now the government could intervene
in a dictatorial exercise of power by a board of trustees – as seen in the case
of the University of Theatre and Film Arts in Budapest (SZFE) –, however, it
doesn’t currently show any desire to do so. He believes that if the government
changes hands, a variety of techniques would be available to restore university
autonomy, but he didn’t wish to elaborate further so as not to show their hand
to the current administration.
Not even a two-thirds majority is enough to
take away someone’s property
All of the
opposition politicians that we interviewed stated that, for one thing, their
lawyers are already examining the situation as it unfolds. Secondly, since
state property is at stake, they are confident that there would be the opportunity
to review the proceedings, should the government change hands. They also agreed
that the situation regarding assets is more complicated than that for higher
opposition politicians say that, if possible, they would have to win the election
with a two-thirds majority (which, given the electoral system, they don’t
consider unrealistic, since Fidesz also managed to end up with a two-thirds
majority despite winning by only a slight margin in the election). If they
manage to do so, they would have more room to maneuver. However, even with a
two-thirds majority, it’s not possible to take away someone’s property. The way
they see it, the key to the solution is that it’s not possible to essentially
outsource the state’s tasks to private institutions in such a way that the
state continues to finance them without there being any public oversight.
to Bertalan Tóth, Chairman of the Hungarian Socialist Party, it is possible to
resolve the extended scope of the Public Procurement Act with a law passed by a
simple majority. At the same time, the opposition is also very determined for
the state to regain control over the MOL and Richter shares that constitute
representative believes that there is still the question regarding the fate of
the 1.5 trillion forints provided by the EU – money that the government used to
„sweeten” the deal for universities to opt to change their models. This is
because – as a result of an amendment passed last year – the manner in which
this money is spent no longer falls under the scope of public procurement. As
such, it is not certain whether the EU will permit the spending of so much
money without any transparency. If this is the case, it’s even possible that
the universities that opted to change their models may wish to return to being
supported by the state in the not-so-distant future. May 04. 2021
(*) After months of pressure from an increasingly authoritarian prime minister and a takeover by a government insider, the staff of Hungary’s last
surviving independent newspaper, Index.hu, resigned en masse to
re-launch their own medium online, news portal “Telex”, with the 70
journalists, developers and back office employees – two thirds of
the Index.hu staff.