Hungary’s residency bond program has been the target of much criticism because:
- It diverts revenues from the state treasury;
- The hand-picked offshore brokerages have close ties to Fidesz;
- The screening process for bond-purchasers has approved their sale to individuals with criminal records; and
- Because the government’s response to these concerns has been to refuse to publicly address them.
In total, the amount of people who may end up receiving residency in Hungary as part of the program – this includes immediate family members – may be as high as 20,000. This is 14 times the number of vetted refugees Hungary would have to provide asylum to as part of the EU’s refugee relocation scheme.
Interestingly, the brokerages tasked with selling these residency bonds have enjoyed revenues in excess of HUF 145.9 billion (USD 540 million), by Magyar Nemzet’s estimates. This number does not even include the legal fees paid to the Kosik Law Office, which is connected to Árpád Habony (Prime Minister Viktor Orbán’s so-called informal advisor tasked by Orbán with building a new pro-government media empire), which earned some HUF 9.6 billion (more than USD 35 million) for processing the official documents.
In total, this program pumped well over half a billion dollars into businesses presumably close to Fidesz, although the opaque ownership structure of most of the brokers makes such allegations difficult to prove.
According to Magyar Nemzet’s figures, the state incurred losses of about HUF 17.6 billion (more than USD 65 million) for interest paid to the brokerage companies purchasing the bonds at well above market levels, which, in turn, issue their own bonds to their clients yielding considerably less interest. The fixed-interest scheme was profitable for the state for the first two years of the program but became loss-making when interest went down.
This loss also does not take into account the cost of running the program through Hungary’s immigration authority or law enforcement agencies.
The program was created by Fidesz MP and propaganda minister Antal Rogán when he was the chairman of parliament’s economics committee.
It is largely thanks to the relentless efforts of Politics Can Be Different (LMP) parliamentarian Márta Demeter that the Hungarian public has access to detailed information concerning the residency bond program.