Hungarian Socialist Party unable to pay its debts

August 9, 2016

Headquarters of MSZP is on sale

Hungary’s third-largest political party, the Hungarian Socialist Party (MSZP), has total unpaid debts of HUF 1.8 billion (USD 6.4 million), reports left-wing Hungarian print daily Népszabadság.

The party owes HUF 1.5 million to different banks, including a foreign currency loan used to purchase the party’s former Jókai street headquarters in Budapest’s central 6th district. They also borrowed money from the Hungarian Development Bank (Magyar Fejlesztési Bank – MFB) and have a revolving line of credit to cover operating costs.

Being so much in debt means the Socialists are not able to settle debts to subcontractors amounting to some HUF 300 million (USD 1 million).

MSZP’s financial hardship goes back to 2010 when their budgetary funding was cut by HUF 432 million (USD 1.5 million) after being decisively beaten in the general election.

Lavish expenditures

The easiest way for the party to raise money would  be to sell the party headquarters, and indeed the property has been on the market since 2015.  Last year Hungarian print daily Népszava reported that the party would like to get rid of the building as it is too expensive for them to maintain. The Socialists were still in power when it bought the building in 2009, but even then the decision to do so was criticized by many party members.  According to reports, Geoholding and Móra Publishing House (Móra Könyvkiadó) have agreed to purchase the building, but the transaction has yet to take place.

The Socialists currently own or rent 150 properties of various size across the country, including its new party headquarters in a relatively remote part of Budapest.

Renewal with old faces

MSZP is in deep trouble not only due to their finances but their dwindling support and inability to reform the party as well. According to the latest opinion polls, they have lost a great number of their supporters since losing power in 2010. In July, they were supported only by 10 percent of Hungarians eligible to vote, while even far-right Jobbik was polling at 12 percent.

Members of MSZP now hope that their recently elected party chair Gyula Molnár will do what it takes to defeat Fidesz in the 2018 elections.  His election, however, raised some eyebrows, even within the inner circle of the party. Although the former mayor of Budapest’s 11th district was acquitted of all charges, many remember his criminal trial concerning the privatization of a large plot of municipal ground fronting on the Danube just south of the Rákóczi bridge, as well as shady contracts behind the prestigious Hadik Café.

Even more scandalous was the election of György Hunvald as president of Budapest 7th district chapter despite Hunvald having served three years in preliminary custody on charges of corruption (for which he was eventually convicted). To make matters even worse, Hungary’s highest court annulled the previous judgment against Hunvald the other week, ruling that the former mayor must face trial for all charges brought against him at the same hearing.

What is certain is that many supporters were disappointed with Molnár’s predecessor, József Tóbiás, for failing to reform the Socialists. Even though the new faces are not to everyone’s liking, they all hope Molnár will succeed in joining forces with other opposition parties, as there is likely no other way to defeat the governing Fidesz-KDNP alliance.

(Or Jobbik for that matter-ed.)