This article summarizes what hvg, Hungary’s most important news weekly, believed to be the most important events and developments of 2016, most of which were also covered by the Budapest Beacon. We have taken the liberty of adding August 16th, the date Fidesz publicist Zsolt Bayer was awarded the Knight’s Cross of the Order of Merit prompting 110 Hungarian notables to return their state awards.
Much ado about nothing?
Europe’s lingering migration crisis dominated Hungarian domestic politics in 2016. Even though there was no repeat of 2015 when some 400,000 migrants passed through Hungary on their way to Germany and Scandinavia, the government failed to cancel the “emergency situation caused by mass immigration” announced that year.
During the first six months of 2016 nearly 23,000 asylum seekers registered themselves in Hungary. After stricter rules were introduced in July, the number of asylum seekers entering Hungary was reduced to a mere trickle, making possible the closure of refugee camps in Debrecen, Bicske and Nagyfa. However, this did not dissuade the government from creating a new independent border defense force at a cost to Hungarian taxpayers of HUF 100 billion, having already spent a comparable amount building a fence along its southern border with Croatia and Serbia.
In 2016 the government spent some HUF 15 billion (USD 52 million) on an all-out media campaign, the ostensive purpose of which was to persuade 50 percent of the Hungarian electorate to vote “no” in a referendum held on October 2 on whether the EU should have the right to settle migrants in Hungary without the consent of parliament. The referendum was the government’s response to a burden-sharing decision on the part of the European Council providing for Hungary to temporarily settle 1,294 asylum seekers while processing their applications for asylum.
Opposition leaders and legal experts alike argued that the referendum was disingenuous and even unlawful in that the question it asked was both ambiguous and misleading. Nor was it clear what the legal consequence of a valid “no” or “yes” vote would be, as the referendum addressed a matter falling outside the purview of the Hungarian parliament. Furthermore, by law obligations arising from international treaties cannot be the subject of referendums. Nor, for that matter, can proposed amendments to the Fundamental Law, which explains the government’s failure to explain to voters what the legal consequences of a valid “no” vote would be as it intended intended all along to modify Hungary’s constitution, the Fundamental Law, so as to make it legally possible for Hungary to opt out of the burden sharing plan.
Claiming Brussels wanted to settle “a city’s worth of migrants” in Hungary, the government spared no expense and left no stone unturned getting out the “no” vote. State-owned and pro-government commercial media bombarded Hungarians with news of atrocities involving migrants in other European countries. Even coverage of the Olympic Games was peppered with 15 second news spots on the subject of terrorism and illegal migration, as well as public information commercials warning viewers of the singular threat to European civilization posed by the “city’s worth of migrants” and informing them that Hungary was engaged in a life and death struggle against Brussels.
Just weeks after announcing that the government would only act in the case of a valid referendum, on the day of the referendum, Orbán told members of the press his government intended to act regardless of whether or not the referendum was valid providing the number of “no” votes exceeded the number of “yes” votes. He did so in the full knowledge that a number of NGOs and left-wing opposition parties were calling on voters to either boycott the referendum or cast an invalid vote.
In the end only 43 percent of eligible voters cast a valid vote (some 222,000 invalid votes were cast by way of protest), of which an overwhelming majority, 3,233,000 or 98 percent, voted “no,” emboldening the prime minister to declare victory and proclaim the birth of a new unity supposedly transcending political divides (even though the vote took place largely along partisan lines, with opposition supporters mostly staying at home or casting invalid votes).
Unwilling to give in to Jobbik demands that the government cancel its controversial settlement bond program, the government failed to muster the two-thirds parliamentary majority needed to modify Hungary’s constitution, the Fundamental Law.
The invalid referendum notwithstanding, 18 months of unrelenting government anti-migrant propaganda at a total cost to Hungarian taxpayers of some HUF 20 billion (USD 69 million) raised anti-foreigner sentiment in Hungary to new heights. A poll conducted by Tarki at the end of 2016 concluded that 58 percent of Hungarians admitted to being xenophobic.
Parliament having made it a crime to enter Hungary illegally previous year, over the course 2016 the Szeged court convicted some 3,000 migrants, most of which were immediately deported. A number of migrants who were present at the Horgos-Röszke border crossing when migrants clashed with Hungarian authorities were given prison sentences for their role in allegedly inciting violence and perpetrating terrorist acts.
The end of media plurality in Hungary
Much of the HUF 15 billion spent by the government “informing” the public about the dangers of migration went to pro-government media outlets launched in the wake of Orbán’s very public falling out with Lájos Simicska, the architect (and substantial owner) of Fidesz’s economic and media hinterland, in February 2015. Over the course of 2015 and 2016 no fewer than 12 new pro-government media outlets were launched by members of Orbán’s inner circle, including unofficial adviser to the prime minister Árpád Habony and former Hollywood producer Andy Vajna. Other individuals close to Orbán acquired individual media outlets or media holding companies.
The launch of a new pro-government media empire to rival that of Simicska took place at Hungarian and European taxpayer expense to the detriment of independent and opposition media. Many believe last year’s “National Consultation on Immigration and Terrorism” and this year’s referendum merely served as a convenient excuse, if not pretext, for the government to transfer tens of billions of forints to new pro-government media outlets controlled by members of Viktor Orbán’s inner circle of trusted advisors and business associates.
At the beginning of the year casino magnate and government commissioner for the film industry Andy Vajna acquired Hungary’s second-largest commercial television channel TV2 using loans provided by the state-owned Eximbank as well as the newly privatized Hungarian Trade Bank (MKB). In February New Wave Media, owned by Tamas Szemerey, first cousin to central bank governor György Matolcsy, acquired leading daily online Origo from Magyár Telekom with grants provided by the central bank foundations. Using the frequency formerly belonging to Tilos radio, Karc FM radio was launched and subsequently transferred to pro-government print daily Magyar Idők. In June Habony’s new free print daily Lokál was launched to take the place of Simicska’s Metropol which, stripped of its government advertising and primary means of distribution, folded. In September Mediaworks Hungary, itself owned by Vienna Capital Partners, acquired the Pannon Lapok portfolio of county newspapers. The following month it “suspended” Népszabadság, Hungary’s largest and most important print daily. Shortly thereafter, Mediaworks sold to Opimus Press, a company listed on the Budapest stock market whose majority shareholder is Lőrinc Mészáros, the rags-to-riches close friend of Orbán wth a penchant for winning lucrative contracts involving EU development funds. Gábor Liszkay, the publisher of the pro-government print daily Magyar Idők, was hired to run Mediaworks. To nobody’s surprised, Opimus Press formally announced in December that Népszabadság was never again to appear on Hungarian newstands.
In December left-wing print daily Népszava and print weekly Vasárnapi Hírek were acquired by 21st Century Media and subsequently resold to a company owned by former MSZP party treasurer László Puch. The end of the year saw the launch of the print version of online tabloid Ripost. Lőrinc Mészáros acquired Echo TV from Fidesz oligarch Gábor Széles, and revisionist historian and Terror House director Mária Schmidt bought weekly news magazine Figyelő.
Even as it actively reorganized the media market, the government took a number of steps to limit access to public information, among other things requiring parties filing formal requests for information to bear the cost of providing it. A series of laws reclassified as business secrets information previously of public interest, from the source and use of TAO funds to the business activities of the Hungarian Postal Service.
Hungary’s new class of super rich continued feeding at the public trough
A select number of businessmen close to Prime Minister Orbán, including his son-in-law István Tiborcz, continued to enrich themselves at the expense of Hungarian and European taxpayers. Overpriced public tenders yielded billions in profits for companies owned by the likes of Lőrinc Mészáros, István Garancsi and László Szíjj, Hungary’s sixth richest person according to Forbes. Winning HUF 250 billion worth of public tenders in 2016, Mészáros’ companies paid dividends of HUF 4.2 billion (USD 15 million) to the mayor of Felcsút, Orbán’s home town. Szíjj received dividends of HUF 4.2 billion (USD 15 million) from Duna Aszfalt alone. Thanks to a virtual monopoly on casinos and online gambling, Andy Vajna became Hungary’s 21st richest person in 2016 (ranked just behind fellow Fidesz oligarch István Garancsi), reaping profits of over HUF 6 billion (USD 20 million) from the casino business in under a year. This, in turn, made it possible for him to the purchase of the heavily loss-making TV2 and to launch his Radio 1.
2016 witnessed a number of transactions involving the transfer of various assets from Hungary’s 14th richest person, Tamás Leistinger, a corporate raider with strong ties to the political left, to members of Orbán’s inner circle. State lands formerly leased to Leistinger were sold at public auction to Videoton owner István Garancsi (who appears to have had an exceptional year, thanks in no small part to his timely purchase of Esme Zrt., a company specializing in a kind outdoor advertising previously banned by the government). In October Leistinger sold Hunguest Hotels to Lőrinc Mészáros.
Taxi drivers blockaded parts of downtown Budapest in protest of Uber, inducing the government to pass a law requiring Uber drivers to issue invoices. The following month a new law came into force giving inspectors the right to remove the license plate from vehicles used by Uber taxi drivers. Uber announced on July 13 that it was leaving Hungary.
A first-level court sentenced former Socialist deputy mayor of Budapest Miklós Hagyó to two years in prison for malfeasance. Arrested in May 2010, the day after the general election that returned Fidesz to power with a two-thirds governing majority, Hagyó was originally charged with soliciting and accepting bribes. However, the charge was subsequently dropped after key witnesses withdrew their testimony. A number of other Socialist politicians charged with malfeasance were found innocent, including former Socialist Minister of Defense Ferenc Juhász and his undersecretary László Fapál, and former Budapest District 13 deputy mayor Dezső Hiszékeny.
Minister for Human Resources Zoltán Balog reprimanded Fine Arts Museum Director László Baán for lending 10 paintings in 2013 to Brand Lab Kft. without first obtaining a permit. The paintings ended up being used in a flat owned by informal adviser to the prime minister, Árpád Habony. The flat was rented by his aunt, Fanny Kaminski, from the local government. Kaminski manages Orbán’s Facebook page. It was later revealed that Habony’s wedding reception had been held at the Museum of Fine Arts free of charge.
Prime Minister Viktor Orbán was received by Russian Federation President Vladimir Putin at Putin’s formal residence near Moscow. At the meeting, Orbán repeated Hungary’s opposition to economic sanctions imposed after the Russian annexation of Crimea. “Hungary is interested in the normalization of relations between Europe and Russia and Hungary and Russia,” said Orbán, a view he represented in Brussels as well, although he did not block the prolongation of sanctions. One reason for this was disagreement among the Visegrád 4 countries of Hungary, Slovakia, Czech Republic and Poland on this issue.
The European Court ruled that the Hungarian cafeteria voucher system was in violation of European Union law. In 2o11 the second Orbán government stripped all cafeteria vouchers of their tax-exempt status except for that of the Erzsébet voucher, owned by a state-owned foundation and labor unions. The decision forced three French companies out of the voucher market: Edenred, Sodexo and Le Chéque Déjeuner, each of which sued Hungary for damages. The court also ruled that the so-called Széchenyi-rest card was also discriminative in that the Hungarian branches of foreign-owned companies were not allowed to issue the card. The strict conditions meant that only three banks were able to engage in the business: OTP, MKB and K&H.
A number of muscle-bound skinheads prevented Socialist MP István Nyakó from being the first to timestamp his application for a national referendum on the issue of mandatory Sunday store closures. It turned out that many of the hired thugs worked for a security company owned by the Ferencváros Football Club whose president is Fidesz president Gábor Kubatov. A police investigation subsequently found that no laws had been violated.
Forum of Hungarian Gypsy Organizations president János Balogh was elected to be the new president of the National Roma Self-government (ORÖ). The extraordinary election took place after István Hegedüs, hand-picked by Fidesz MP and government commissioner for Roma affairs Flórian Farkas to succeed him, turned against his former patron and resigned. Under the leadership of Farkas, ORÖ won billions of forints in the form of European Union grants with which to create its Bridge to the World of Work alliance. However, suspicious payments resulted in NAV and police investigations. The Ministry for Human Resources demanded that ORÖ repay HUF 1.6 billion (USD 3.5 million) after investigations confirmed that the money was not used as intended. ORÖ is to repay the funds in11 monthly installments of HUF 5 million each, with a final payment of HUF 1.5 billion due in the 12th month (effectively giving ORÖ nearly a year to come up with the money by hook or by crook-ed.)
The government allocated HUF 1 billion for art purchases for the Offices of the Prime Minister, soon to be housed in the 18th-century Carmelite Monastery. The monastery will be renovated to accommodate the Prime Minister’s Office and is next to the President’s palace in the Castle District. The project, which is scheduled for completion in November 2017, has a reported cost over HUF 20 billion (USD 70 million). Information about the project was made confidential in November. It is not possible to know how much the project will cost, only that the planning alone cost HUF 628 million (USD 2.2 million). The PMO is to be accompanied by the Ministry of the Interior, which is moving to the block of buildings presently used by Magyar Televizió (MTV).
Son of Saul won the Oscar for best foreign film.
Demonstrations break out over the cutting of trees in Budapest City Park in preparation for the construction of a “museum district” within the park. When members of the so-called Park Defenders (Ligetvédők) attempt to prevent the demonstration at the Transportation Museum, security guards assaulted them. Activists also opposed the cutting of some 100 trees in the Orczy park as part of the construction of the Ludovika Campus.
The Constitutional Court ruled that the activities of the Pallas Athéné foundations created by the Hungarian National Bank performed a public function, and that the USD 900 million in funds with which they were endowed by the central bank were public funds whose use was a matter of public interest.
Századvég Foundation chairman András Lánczi was nominated by the Senate of the Budapest Corvinus University to serve as rector.
Radical right-wing Jobbik convened a meeting of the Parliamentary Committee on National Security upon learning that Prime Minister Viktor Orbán’s son-in-law, István Tiborcz, conducted business with Ghaith Pharaon, a Saudi billionaire wanted by the FBI and Interpol. Pharaon was issued a visa to visit Hungary despite being the subject of an international arrest warrant. Pharaon’s business relationship with Tiborcz came to light after a number of trees were cut down in József Nádor square after a Pharaon investment company, Pharaon-Omega, purchased a company connected to Tiborcz, AMX Nádor House Kft. It was later revealed that the billionaire’s other company, presumably fronting for Tiborcz, had purchased a property on Cinege street, next to the prime minister’s residence. Fidesz politicians claimed that Pharaon’s presence in Hungary did not constitute a national security risk, and Orbán dismissed the matter as an intrigue of the US secret service. Nevertheless, in autumn, the Ministry for Foreign Affairs and Trade’s State Trading House sold its shares in the company it jointly owned with Pharaon.
The Hungarian Tourist Agency was launched. The following month responsibility for supervising the new agency was transferred from the Ministry of National Economy to the Ministry of National Development. The head of the agency, Zoltán Guller, was appointed government commissioner for the Erzsébet program. Former PricewaterhouseCoopers CEO Gusztáv Bienerth was appointed government commissioner for tourism. PwC prepared the study forming the basis for Hungary’s bid to host the 2024 Olympic Games. While CEO of PwC, Bienerth was a member of the board of directors of Budapest 2024 Nonprofit Zrt., responsible for preparing Budapest’s bid to host the Olympics. He was the main organizer of the “civil” event held in February at which Prime Minister Orbán’s daughter, Ráhel (who is married to Tiborcz) and Andy Vajna debated the government’s new tourism concept. In autumn the Hunguest portfolio of hotels owned by former corporate raider Tamás Leistinger was sold to Gellért Jászai, the former owner of SCD. Later Felcsút mayor Lőrinc Mészáros’ people were appointed directors. Mészáros also put his hands on the Salrisi hotel in Egerszalók. Tiborcz acquired a partially completed luxury hotel.
A small-gauge nostalgia railway built using EU funds in the prime minister’s hometown of Felcsút came into service. Originally planned to transport between 2,460 and 7,080 people a day between Alcsút, where Orbán’s parents live, and Felcsút at a speed of 25 km per hour, the 5.7 km-long railway cost HUF 857 million (USD 3 million) to build, of which HUF 600 million (USD 2.1 million) was provided by the EU. Dialogue for Hungary MEP Benedek Jávor reported the project to the European anti-corruption office, claiming that the government deliberately falsified data about expected usage in order to receive EUR 2 million of support. Deputy Minister Nándor Csepreghy denied this, claiming that they only calculated with 27-28 passengers daily. There have been days when not a single passenger has used the railway.
International credit agency Fitch upgraded its rating of Hungarian treasury bonds from “junk” to investment grade. Standard & Poor’s and Moody’s followed suit, citing Hungary’s improving fiscal situation and decrease in vulnerability following the mandated conversion to forints of all FX-denominated loans held by private citizens.
Politics Can Be Different (LMP) co-chairman and parliamentary delegation leader András Schiffer announced he was retiring from politics and leaving the party he co-founded. His seat in parliament was taken by anti-corruption political activist Ákos Hadházy. Eventually replacing Schiffer’s as co-chair, the former Fidesz assemblymen had left the governing party upon learning of systematic corruption he says was centrally organized, and joined Hungary’s green party. At the time, many believed Schiffer’s resignation would clear the way for the formation of a left-liberal coalition capable of defeating Fidesz in 2018. However, since then both LMP and Együtt have announced their intention to run their own slate of candidates in 2018.
The government announced that value-added tax on poultry, eggs and fresh milk would decrease from 18 percent to 5 percent from 2017. Replacing it is a HUF 10 per liter tax on diesel fuel and an excise tax of HUF 5 per liter tax on petrol whenever the world price of oil falls below USD 50 per barrel. Furthermore, from 2017 the tax discount for families with two or more children would triple from HUF 5,000 to HUF 15,000 per family. Following adoption of the tax law in June two additional tax packages followed. The most important change is that in 2017 the company tax will decrease to 9 percent, the lowest in Europe.
Hungary’s national football team qualified for the European Football Championship, making it to the octofinals. Although Hungarians had much to celebrate, the government’s policies with regard to sport came under attack, given that the budget contained HUF 50 billion for the renovation and management of sports facilities. Public ambivalence towards Viktor Orbán manifested itself at the opening of MTK’s new arena where the prime minister was openly jeered. West Hungária Bau, whose owner has numerous mutual businesses with the prime minister’s son-in-law István Tiborcz, went more than HUF 1 billion over budget. A number of new or renovated sports facilities were completed in 2016. The Pancho Aréna in Felcsút continued to be the largest beneficiary, receiving 100 percent tax-deductible donations from various companies in the amount of HUF 11 billion between 2011 and 2016, or roughly HUF 5 million per fan. At Orbán’s insistence, parliament made information about the use of such donations a tax secret, for which the opposition Hungarian Socialist Party (MSZP) voted, supposedly by accident.
The government shut down the “Gyere Haza Fiatal!” (“Come home youth!”) program intended to incentivize Hungarian expatriates to return to the country. The HUF 100 million program reportedly succeeded in luring 105 Hungarian youth home from England. According to Central Statistical Office data the number of unfilled jobs in Hungary reached a record in the third quarter of the year at 41,000, 11,000 more than the third quarter of 2015. According to the Countrywide Alliance of Employers and Industrialists, in reality some 100-200,000 positions have gone unfilled. During the final months of 2016 the government modified a number of laws to enable tens of thousands of Ukrainians emigres to work in Hungary. From February 2017 guest workers with full-time jobs will be entitled to housing subsidies. In July the time for processing work permit applications was decreased from 30 to 15 days. Furthermore, fields in which there is a pronounced shortage of qualified workers no longer require permits, and a new legal classification was created: that of “citizens of neighboring countries.” The list of fields in which there is a labor shortage is to be prepared by the Minister for National Economy annually. Presently, it contains 37 professions, including construction workers, information system experts, and trade and hospitality industry workers.
The court struck down the Public Procurement Selection Committee’s decision of July 2015 banning Közgép, the largest of several construction companies owned by Lájos Simicska, from participating in public tenders for three years. However, the court decision was not sufficient to enable the company to win any public tenders in 2016. Instead, the committee awarded a nearly HUF 7 billion (USD 25 million) contract to build a port at Gönyű to Mészáros és Mészáros, one of several construction companies owned by Felcsút mayor Lőrinc Mészáros. Companies linked to Mészáros won HUF 250 billion (USD 862 million) worth of public contracts in 2015. All the contracts in question involved contracts financed by the European Union.
The Hungarian Socialist Party elected former Budapest District 11 mayor Gyula Molnár to succeed József Tobiás as party chairman, beating out Tamás Harangozó and Tibor Szanyi. The party’s only success was in the by-election held in Salgótarján in February. The struggle between MSZP and Democratic Coalition (DK) for left-wing voters continued. Hvg notes that, while the Socialists have a bigger organization, DK “enjoys an advantage when it comes to rhetoric.” However, the person of DK chairman Ferenc Gyurcsány, who was Socialist prime minister between 2004 and 2009, complicates attempts to unify the political left. Discussions initiated by Dialogue for Hungary (PM) co-chairman Gergely Karácsony broke down when Gyurcsány vetoed the participation of the Liberals under Gábor Fodor. The goal is for the political left to run one joint candidate in each of Hungary’s 106 electoral districts in order to avoid a repetition of the by-election in Dunaújváros where the Fidesz-KDNP candidate won despite receiving less votes than the candidates run individually by MSZP, DK and PM.
The government announced that henceforth it is the responsibility of adult Hungarians to take care of their parents if they cannot afford or can only partially afford the cost of being cared for by the state or the church. In this case, the cost can be imposed on the adult children of the beneficiary. The basis for this was not a new law but rather the old family law as well as the new civil code which came into force on March 15, 2014.
The government proposed the creation of hospital chancellors who would be responsible for making economic decisions. The proposal was opposed by the Hungarian Alliance of Hospitals. However, structural reforms initiated by the Prime Minister’s Office are being implemented despite professional objections. For example, at the end of 2016 the Countrywide Health Care Insurance Fund (OEP), an independent fund responsible for funding health care, is to be abolished, with the Countrywide Pension Administrator Main Directorate assuming responsibility for remitting funds. Henceforth, the Ministry for Human Resources is responsible for administering the public health-care fund where what remains of the OEP is to function as a “central agency.”
In the interest of relieving himself of daily political burdens, Prime Minister Viktor Orbán created a new cabinet structure consisting of a strategic cabinet led by Minister Overseeing the Office of the Prime Minister János Lázár and an economic cabinet led by Minister for National Economy Mihály Varga. Henceforth, only matters that had been discussed by both cabinets and about which there was consensus on the part of both cabinets could be presented to the government for discussion. The step was seen as a way of compensating Lázár, whose influence was diluted by last year’s promotion of Antal Rogán to the newly created ministerial position of Head of the Prime Minister’s Cabinet. The reorganization also strengthened the influence of Rogán, Interior Minister Sándor Pinter, Defense Minister István Simicskó, Foreign Minister Péter Szíjjártó and Justice Minister László Trócsányi at the expense of those ministers belonging to neither cabinet. L. Simon László was relieved of his responsibilities as undersecretary. Mrs. László Németh, undersecretary responsible for national financial services who served as Minister for National Development under the second Orbán government, retired.
Hungary took 8 gold, 3 silver, and 4 bronze medals in the Rio Olympic Games to place 12th overall. Hungarian swimmer Katinka Hosszú and rower Danuta Kozák won three gold medals apiece. Displeased with the results, especially those of the male athletes, Orbán ordered that responsibility for allocating money be transferred from the Olympic Committee to the Ministry for Human Resources. In September the government issued a written guarantee required for Budapest to apply to host the 2024 Summer Olympic and Paralympic Games, for which the government pledged to ensure funding necessary to build facilities and related infrastructure. After the International Olympic Committee named Budapest as one of the three finalists (the other two being Los Angeles and Partis), the government increased from HUF 6 billion to HUF 7 billion the amount to be spent on Hungary’s application to host the 2024 Games.
György Budaházy was given a 13-year sentence for his involvement in a series of violent attacks that took place between 2007 and 2009. Budaházy was accused of organizing attacks on the homes of Socialist and Free Democratic members of the government, including György Szilvásy, István Hiller and János Kóka, as well as ordering the attack on Sándor Csintalan, the HirTV anchorman and former Socialist MP. The attack on Csintalan was allegedly in retaliation for referring to members of the Hungarista Movement as “hooligans.” Previously Budaházy had been convicted for attempting to violently overturn the constitutional order, but was acquitted by the Curia in 2012. Since his arrest in 2009, Budaházy has spent most of his time either in preventative detention or under house arrest. He was allowed to go free for two years.
The National Assembly unanimously voted to lift the immunity from prosecution of Fidesz MP Roland Mengyi after prosecutors accused him of conspiracy to steal public funds. Using the code name “Lord Voldemort”, Mengyi allegedly solicited HUF 10 million worth of bribes from a social cooperative hoping to receive EU funds. Initially telling them 50 percent would have to be kicked back to him, this figure was subsequently increased to 90 percent. Also implicated in the scandal was tender-writing company Public Sector which, among other things, had participated in the HUF 1.8 billion EU-funded “Key to a Better Life” program. The majority owner of the company is Sándor Holbok, the former chief of staff for Fidesz politician József Szájer while he was head of the Fidesz parliamentary delegation. Holbok also played a role in the management of several state companies under the second and third Orbán governments.
22,000 families applied to receive the so-called CSOK family home creation discount in the amount of HUF 62 billion (USD 214 million) after the conditions were modified to make it easier for banks to remit funds to families purchasing new flats in buildings under construction. 70 percent of applicants wished to use the funds to acquire a used flat. This was one contributing factor to the strengthening of the Hungarian residential real estate market. In 2016 there were 150,000 real estate transactions and 14 percent more flats were built than in the previous year. The government plans to spend another HUF 211 billion on CSOK in 2017. The number of building permit applications increased 2.5 times countrywide and 3 times in Budapest. Flat prices have increased 40 percent over the past two years, while the price of panel flats has gone up 65 percent.
A homemade bomb was detonated in the Teréz körút, seriously wounding two policemen, one critically. The alleged perpetrator was taken into custody the following month in Keszthely. He refused to enter a plea and denied having detonated the bomb. Police allegedly found the same materials used to make the bomb in the basement of his house in Karmacs. The suspect is currently undergoing psychiatric evaluation.
Antal Rogán and his family were photographed by national daily Népszabadság climbing out of a helicopter into a chauffeur-driven Mercedes Benz on their way to a celebrity wedding in the countryside. After denying this had happened and threatening to sue for defamation, Rogán subsequently admitted that the trip had been made possible through a barter agreement. This was merely the latest in a serious of scandals involving the second or third most powerful Fidesz politician, culminating in the outing of Balázs Kertész as the architect of the scheme whereby District 5, while under Rogán’s mayorship, sold municipal property at substantially under market value to individuals and businessmen with close ties to Fidesz.
Népszabadság revealed that although central bank governor György Matolcsy was registered as living at a 150-square-meter vacation home in Balatonakarattya, in reality he was living in a luxury flat in the Castle District belonging to UniCredit Bank CEO Mihály Patai, even though this was an obvious conflict of interest as the MNB is directly responsible for supervising the activities of commercial banks. The paper also revealed that Matolcsy’s lover had worked for the Hungarian National Bank prior to joining the boards of the central bank’s Pallas Athéné Foundations. Endowed with HUF 250 billion (USD 900 million) worth of central bank funds, the foundations began divesting themselves of treasury bonds after the European Central Bank ruled that this constituted a form of prohibited state finance. Instead, the foundations invested tens of billions in high-end real estate, particularly in the Castle District.
After packing up their offices the previous day in anticipation of moving to larger offices, the editorial staff of Népszabadság was informed via courier the following morning that the publication of Hungary’s largest national daily had been suspended. The closure of Hungary’s largest independent print newspaper triggered a series of protests and received extensive international coverage.
FHB majority owner and CEO Zoltán Spéder was forced to sell his shares in FHB and Mária Schmidt’s BIF real estate management company. Earlier the Hungarian chief prosecutor announced that the police were investigating suspected cases of fraud involving the FHB, the Hungarian Post, and the savings cooperatives. In June police conducted a search of Spéder’s home. Hvg.hu speculated that Spéder might have propped up FHB with loans from other financial institutions under his direct or indirect control. Another reason for his falling out of favor with Viktor Orbán and company may have been the fact that his various online media publications were often critical of the government. He reportedly sold his shares in Takarékszövetkezet to Heinrich Pecina of Vienna Partners, the same company which subsequently closed Népszabadság just prior to selling Mediaworks to a company linked to Lőrinc Mészáros.
225 academicians signed a letter addressed to the president of the Hungarian Academy of Sciences (MTA), László Lovász, expressing their concerns over the anti-democratic trends of the past few years, especially the endangerment of the free press. The signatories called on MTA to deal with pressing social questions. By way of protest, a number of honorary foreign members resigned their memberships. However, Lovász responded by pointing out that “the Academy is not a political organization” and that it needn’t deal with political questions. Not only did MTA fail to take a position on democracy, the erosion of freedom of the press and corruption, but it silently tolerated being stripped of its real estate and the loss of prestige. On the other hand, it built a new agricultural research center in Martonvásár with HUF 7.8 billion in government grants. The government also paid to renovate its main building.
Hungary reportedly spent HUF 16 billion (USD 55 million) commemorating the sixtieth anniversary of the 1956 Hungarian revolution at home and abroad. Prime Minister Viktor Orbán had requested a memorial year from revisionist historian and Terror House director Mária Schmidt that was “fancy, sexy and trendy.” The government commissioner claimed that the government spent HUF 50 million (USD 170,000) on an anthem commissioned from pop composer Desmond Child even though the composer, whose father was Hungarian, claimed to have worked for free (if only because he had originally composed the music in question for a US college football team). Departing from the narrative of ten or twenty years ago (the “counter-revolutionary uprising” of 1956 was not spoken of prior to the fall of communism in 1989), the government emphasized the role of everyday Hungarians who took up arms against their Soviet oppressors, entirely ignoring the role of reformed communists. In a speech delivered by Prime Minister Viktor Orbán (amidst the cacophony of jeering protestors) within view of the memorial statue erected to Imre Nagy, Orbán failed to so much as mention the name of Hungary’s martyred prime minister, or that of the Petőfi circle of writers, many of whom were subsequently executed or given long prison sentences. Instead, the government plastered the country in giant billboards featuring photographs or images of individual street fighters with quotes attributed to them. In one highly publicized case, an image of a child fighter was incorrectly identified as a figure close to Fidesz.
One policeman was shot dead and another wounded while trying to enter the Bőny home of István Győrkös, the founder of the Hungarian National Front Line (MNA), a radical right-wing militant organization founded in 1989. Guns and ammunition were allegedly found in the subsequent search of his house. It was later revealed that a number of Jobbik politicians, including Zsolt Tyirityán, founder of the militant group Betyársereg (Army of Highwayman), as well as Russian “diplomats” had attended the training camp Győrkös ran in Bőny.
After postponing the decision four times between February and June, the Budapest general assembly approved the renovation of the M3 metro line, including the cost of operating a supplementary bus service for the duration of the renovation, at a total cost of HUF 137.5 billion, even though offers received as of that time indicated it would cost closer to HUF 170 billion. The following months the state railroad (MAV) took over from Budapest the responsibility for operating five regional rail lines (HÉV).
The government completed the sale of some 250,000 hectares of state land within the framework of the “Ground for the farmers” program. State lands were sold to some 30,000 individuals was for between HUF 850,000 and HUF 1.4 million per hectare. The resulting HUF 270 billion (USD 930 million) in revenues are to be used to pay off state debt even though the law establishing the National Ground Fund Manager specifies that revenue arising from the sale of state lands can only be spent on the acquisition of additional land. The government claims the sale of state lands strengthened small- and medium-sized landholders, pointing out that half the auctions involved the sale of 20 hectares or less, and that in only 9 percent of cases was more than 100 hectares sold to any one party. Among the latter were a number of foreigners as well as individuals close to the government, including Lőrinc Mészáros.
The European Commission formally ruled that assessing a progressive tax of between 0 and 50 percent of advertising revenues violated EU law, as did the fact that companies were allowed to deduct losses from the previous year from the tax base. The decision pertained to the law adopted in June 2014 which clearly targeted Hungary’s largest independent television broadcaster RTL Klub in an attempt to “undermine the country’s largest medium which over the past 17 years has proven its independence from parties and the government.” Since then RTL’s news coverage has made a point of covering politics, including the point of view of opposition politicians denied coverage by state television. In response to criticism from Brussels, the National Assembly introduced a 5.3 percent tax on advertising revenues exceeding HUF 100 million annually. It did so without notifying or consulting the European Commission, which ended up annulling the law anyway on the grounds that it was anti-competitive.
Hungary’s second-largest commercial television station (acquired by government commissioner for the film industry Andy Vajna with a loan provided by the Eximbank) set out to assassinate the character of the second-largest party in parliament by claiming Jobbik chairman Gábor Vona had had “homosexual adventures.” Employing paparazzi-like methods, pro-government media claimed that Jobbik deputy chairman János Volner had cheated on his wife. Hungary’s new pro-government media also launched vicious attacks on anti-corruption crusader Péter Juhász as well as FHB CEO Zoltán Spéder after the latter fell out of favor with the government.
The National Assembly selected four new Constitutional Court judges: Mrs. Ildikó Marosi Horcher, Attila Horváth, Balázs Schanda and Marcel Szabó. It also elected acting court president Tamás Sulyok chief justice. Opposition party Politics Can be Different (LMP) was roundly criticized for its decision to vote along with the Fidesz-KDNP governing majority in appointing the four judges. The other opposition parties (MSZP, Jobbik) boycotted the vote, claiming all four candidates were from the Fidesz camp.
Minister for National Economy Mihály Varga announced that the government had agreed with representatives of labor unions and employers to increase the minimum wage 15 percent in 2017 and an additional 8 percent in 2018 in the case of unskilled workers. In the case of skilled workers, the minimum wage is to be increased 25 percent in 2o17 and 12 percent in 2018. Employers are to be partially compensated with a 5 percent decrease in employer contributions in 2017 and an additional 2 percent in 2018. The decision means that the minimum monthly wage of unskilled workers will increase from HUF 111,000 in 2016 to HUF 127,700 in 2017, and that of skilled workers from HUF 129,000 to HUF 161,300. Varga announced that if wages increased by more than 11 percent the first nine months of 2017, then employer contributions would decrease an additional 0.5 percent in 2018. The government expects tax revenues to increase HUF 180 billion in 2017 thanks to higher wages. Lower employer contributions and corporate tax rates, however, will deprive the government of some HUF 400 billion in revenues.
Tamás Gyárfás resigned as chairman of the Hungarian Swimming Alliance (MÜSZ), a position he had held since 1993. Gyárfás was heavily criticized for failing to provide a professional climate in which Hungarian swimmers can train, and for running the organization in a dictatorial manner and abusing his right to decide who receives state money allocated for athletes. Among his critics were a number of prominent Hungarian swimmers including Olympic champion Katinka Hosszú. It was revealed in December that Gyárfás intends to retain his position as co-chair of the 2017 Budapest swimming world championship as well as his international positions.
Hungary’s Disaster Management authorities, who took over the responsibility for inspecting and cleaning chimneys in 1,830 settlements in July, officially acknowledged that the acute shortage of chimney-sweeps can only be solved by recruiting people engaged in public work after it was unable to fill 1,350 positions. In October the Countrywide Trade Union of Chimney sweeps announced that the nationalization of their profession posed a threat to Hungarians, pointing out that three times as many deaths from carbon monoxide poisoning took place in 2016 than in previous years.