Hungary

Transitional or Hybrid Regime
49
100
DEMOCRACY-PERCENTAGE Democracy Percentage 49.40 100
DEMOCRACY-SCORE Democracy Score 3.96 7
Last Year's Democracy Percentage & Status
51 100 Semi-Consolidated Democracy
The ratings are based on a scale of 1 to 7, with 7 representing the highest level of democratic progress and 1 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year. The Democracy Percentage, introduced in 2020, is a translation of the Democracy Score to the 0-100 scale, where 0 equals least democratic and 100 equals most democratic.

header1 Score changes in 2020

  • Electoral Process rating declined from 4.50 to 4.25 to reflect the institutional advantages enjoyed by the ruling party in local elections, including unequal access to state resources, politicization of state institutions, systemic abuse of state funds, and highly biased and partisan coverage by state media.
  • Local Democratic Governance rating declined from 5.00 to 4.75 due to increasing centralization on the ground and preelection threats that opposition-led municipalities might lose funding.
  • Corruption rating declined from 3.25 to 3.00 to reflect several new cases of high-profile graft and the fact that high-level corruption, unless politically inconvenient, is unchecked.

header2 Executive Summary

By Gábor Filippov

Over the last decade, the right-wing alliance of Fidesz and Christian Democratic People’s Party (KDNP), which won a two-thirds parliamentary majority in 2010, 2014, and 2018, has gradually undermined the rule of law in Hungary and established tight control over the country’s independent institutions. After adopting a new constitution, the ruling coalition fundamentally changed the electoral laws and system of campaign financing; it has also captured the public media and taken control over large segments of private media through an extensive network of government-friendly oligarchs. These developments grant Fidesz-KDNP an extraordinary advantage over the opposition. Consequently, Hungary today can no longer be regarded as a democracy but belongs to the growing group of hybrid regimes, sitting in the “gray zone” between democracies and pure autocracies.

The year 2019 started with political unrest in Hungary, followed by public disillusionment and a wave of political apathy, but ended on a high note after unexpected electoral success by the opposition. Yet, altogether, the year led to further consolidation of government control over the country’s institutions. After an intense period of antigovernment mobilization in late 2018, when thousands marched against the so-called slave law (an amendment to the labor law that negatively impacted employment protections), the protests died down in January and left the government’s popularity more or less unaffected. Fidesz-KDNP managed to maintain its dominant position for most of the year, while the opposition continued to struggle with internal divisions and weaknesses.

In 2019, two elections were held in Hungary with mixed political results. While the European Parliamentary election in May brought another landslide victory for the ruling coalition, the municipal elections in October achieved significant gains for the opposition. The parties’ new electoral strategy—fielding joint candidates against the government in several municipalities—proved to be effective, and for the first time since 2006, the opposition successfully prevented a Fidesz sweep victory.

These developments have reconfigured the Hungarian political landscape to some extent. Since 2010, the Fidesz-KDNP coalition has dominated Hungarian politics from the municipal to the government level, lacking any serious challengers. With the opposition victories, however, the myth of Prime Minister Viktor Orbán’s invincibility has been broken, and in the capital and several other larger cities, major opposition parties have gained access to power, financial resources, and media coverage, as well as the opportunity to articulate a new political alternative at the local level. Moreover, the successes of 2019 have the possibility of encouraging similar coordination ahead of the 2022 election, increasing the opposition’s chances of defeating Orbán. Still, for 2019, Fidesz remained the strongest party nationally, maintaining an unquestionable lead throughout the countryside, and holding strong positions in several cities.

In both electoral campaigns, Fidesz-KDNP deployed a proven campaign strategy. It mobilized its constituents with conspiracy theories and extremely polarizing messages aimed at whipping up fear and anti-immigrant and xenophobic sentiment. This messaging continued to pay political dividends: according to opinion polling at year’s end, despite the negative outcome of the municipal elections, Fidesz fully retained its position as the most popular political force.

This was also due to the party’s other source of enduring popularity. In addition to the government’s financial and media advantages, tilted electoral playing field, and weaknesses of the opposition, the regime’s stability rests primarily on the public’s perception of strong economic conditions in the country. Due to the global expansion of the past decade and inflow of vast European Union (EU) structural and cohesion funds, the Hungarian economy was in relatively good shape in 2019. The country’s GDP grew higher than the European average, real wages continued to rise, and the unemployment rate continued a five-year decline.

In 2019, the governing Fidesz-KDNP coalition passed laws that further eroded transparency and democratic accountability, including instituting limits on the opposition’s check on government and restricting the watchdog role of independent media. These changes were complemented by further centralization of the vast progovernment media empire. Through loyal outlets, the ruling coalition continued its permanent campaign against independent journalists, nongovernmental organizations, and academic institutions. Still, in the second half of the year, there were disruptions to established government messages. With a significant decline in illegal border crossings (and absence of actual migrants in Hungary), the issue of migration seemed to lose salience with the public, while the climate crisis, largely ignored by the government, became a central topic in the municipal campaign.

Both the government and the opposition were preparing for the 2022 parliamentary elections at year’s end. Even though many expected Fidesz to take a more moderate tone and soften its political message as a result of the setback in the local elections, there were signs that the government will keep on mobilizing its supporters with tough stances on migration and cultural identity, while invoking new enemies, including the country’s Roma population or lawyers defending prisoners’ rights. Several prominent Fidesz politicians also indicated that, after a decade of economic growth, a slowdown or possible recession is likely. While Fidesz accepted the unfavorable results of the 2019 municipal elections, new measures restricting the opposition’s activities in the National Assembly suggest that the party is prepared to make further changes to the electoral system to consolidate its advantage. Meanwhile, the main task ahead of the opposition, in addition to presenting itself as an attractive political alternative in an already limited media environment, is to lay the foundations for electoral cooperation among candidates and parties in 2022.

National Democratic Governance 1.00-7.00 pts0-7 pts
Considers the democratic character of the governmental system; and the independence, effectiveness, and accountability of the legislative and executive branches. 3.253 7.007
  • Following its two-thirds victory in 2010, Fidesz-KDNP has steadily rewritten the Hungarian constitution, and eliminated democratic safeguards statutorily embodied in the Constitutional Court, Prosecutors Office, Media Authority, and State Audit Office by packing these formally independent institutions with loyalists.1 In 2019, the governing coalition further centralized its power while continuing to limit political space for the opposition.
  • The role of the parliament as a place for debate and discussion was further degraded in 2019. In December, less than a year after members of parliament (MPs) from the opposition protested an amendment to the labor code by blowing whistles and sirens in the parliament building, the government made such visible acts of dissent much more difficult. The ruling parties amended the Act of Parliament and the Rules of Procedure and adopted the so-called muzzle law,2 which sets out increased fines and sanctions on MPs who “disrupt” the work of the National Assembly. Among other changes, the maximum penalty for MPs who break house protocols was raised from six months to a full year’s salary, and the speaker is now entitled to suspend lawmakers for a maximum of 60 parliamentary sessions, a sharp increase from the previous 9 sessions.3
  • Another amendment passed in the same month limits opposition cooperation inside the National Assembly. According to the new stipulation, which followed the opposition’s successful coordination in local elections in October, parliamentary groups may only be formed by MPs elected by the same party, and independent lawmakers cannot join parliamentary groups or take part in the formation of new ones (previously, MPs were allowed to caucus again six months after leaving their parliamentary faction). Parliamentary groups are assigned preferential benefits inside the National Assembly, such as office space and financing, as well as allotted more speaking time.
  • These new rules are clearly aimed at preventing the fragmented opposition from coordinating efforts and maximizing its impact in the legislature. For example, after the 2018 elections, the green-liberal Dialogue for Hungary (Párbeszéd) party, which won only three seats in the parliament and ran together with the Socialists (MSZP), was able to form its own group with the accession of two MPs elected on the ticket of another party—a move no longer allowed. The amendment also bans changes to the name and composition of a parliamentary faction after the election, further complicating a potential joint electoral strategy for the opposition. 4
  • The governing Fidesz-KDNP coalition continued to target vulnerable groups to score political points. In 2018, the Fundamental Law was amended to provide constitutional ground for criminalizing homelessness. In June 2019, the Constitutional Court rejected legal challenges to the amendment, ruling that “no one shall have the right to be destitute or homeless; this state is not part of the right to human dignity.”5 Similar to previous years, Hungarian refugee policy in 2019 was characterized by a systemic violation of international legal standards and inhuman treatment of asylum seekers. According to estimates by human rights organizations, in November, 300–360 persons were held in the Röszke and Tompa transit zones.6 The nonprofit Hungarian Helsinki Committee reports that the detainees (mostly children) had been subjected to inhuman treatment, many of them starved by the authorities, and denied basic healthcare services. In March, for the eighth time, the European Court of Human Rights (ECtHR) ordered the Hungarian government to provide food to migrants held in transit zones; in November, the court awarded €5,000 in damages to two asylum seekers but, at the same time, ruled that their stay in a transit zone did not amount to detention.7
Electoral Process 1.00-7.00 pts0-7 pts
Examines national executive and legislative elections, the electoral framework, the functioning of multiparty systems, and popular participation in the political process. 4.254 7.007
  • In 2019, two nation-wide elections took place in Hungary. European Parliament (EP) elections were held on May 23 and local elections on October 13. Both votes took place on a significantly tilted playing field that provided the incumbent with undue advantages. The elections were marred by unequal access to state resources, politicization of state institutions, systemic abuse of state funds, and highly biased and partisan coverage by state media.1
  • In the EP elections, the ruling Fidesz-KDNP coalition won 52 percent of the votes, securing 13 seats and increasing its share compared to the 2014 elections. Meanwhile, the results significantly changed the political landscape for the opposition. The social-liberal Democratic Coalition (DK), led by former Prime Minister Ferenc Gyurcsány, finished second with 16 percent (gaining four seats, an increase from one seat in 2014), while liberal Momentum finished third, performing above expectations with 10 percent (two seats). The Socialists (MSZP, once the dominant party of the left) ran in alliance with green-liberal Dialogue, securing 7 percent (one seat), while the right-wing populist Jobbik received 6 percent (one seat), a significant setback for the once radical nationalist party compared to 2014. The green party LMP did not clear the electoral threshold.2
  • Unlike the EP elections, the municipal ballot in October brought success for the opposition, in no small part due to a new strategy. In the capital Budapest and other larger cities and towns, opposition parties fielded joint candidates against Fidesz, preventing fragmentation of the vote. This proved to be an effective technique, counteracting the government’s “rule and divide” strategy and resulting in significant gains in cities, including several traditionally right-leaning municipalities. Perhaps most significant, after nine years, the opposition took back the capital: Gergely Karácsony, the opposition’s joint candidate, gained 51 percent of the vote and defeated incumbent mayor István Tarlós. The opposition coalition also won 12 out of 23 districts, and defeated Fidesz-KDNP in the Budapest Assembly. In addition, out of the 23 cities with county-level rights, opposition mayors were elected in 10, an increase of 7 compared to the 2014 elections. Still, Fidesz-KDNP swept the countryside; it retained its majority in smaller settlements and all 19 county assemblies.3
  • The 2019 elections were peaceful, but there were a number of allegations of malpractice, irregularities, and electoral fraud—though these did not influence the outcome. The most typical infringements included forged voter signatures, vote buying, carousel voting, misrecording of votes, and voter intimidation.4 Additionally, the prosecution launched 13 investigations into the sudden increase of registered voters in small towns along the border, which raised questions of attempted fraud. The elections had to be rerun in the small village of Nyésta, where the number of registered voters increased from 27 to 98. Reruns also took place in the villages of Pettend, Várfölde, and Kisberény.5
  • Both electoral campaigns were characterized by hostile and xenophobic rhetoric, limited space for substantive political debates, and the use of questionable campaign tools, such as leaked recordings of incumbents and opposition candidates alike. The ruling parties relied heavily on their extensive media network, which spread false allegations that Hungarian-American billionaire philanthropist George Soros, European Union (EU) rights commissioner Frans Timmermans, as well as several opposition candidates, including Gergely Karácsony, were planning to flood Hungary with Muslim migrants.6
  • In September, the campaign office of András Pikó—a former journalist and joint opposition candidate from Józsefváros, central Budapest’s eighth district—was raided by police who seized several staff computers. The raid took place after Magyar Nemzet, the country’s largest progovernment daily, accused the campaign team of building an illegal database using voters’ personal information, the accusation based on a photo leaked online. In October, the police closed the investigation, finding no evidence of personal data abuse or other violation of campaign rules.7
Civil Society 1.00-7.00 pts0-7 pts
Assesses the organizational capacity and financial sustainability of the civic sector; the legal and political environment in which it operates; the functioning of trade unions; interest group participation in the policy process; and the threat posed by antidemocratic extremist groups. 4.505 7.007
  • In the past few years, nongovernmental organizations (NGOs) have been operating in an increasingly hostile political environment. Smeared in the government’s “freedom fight for sovereignty,”1 NGOs have been negatively portrayed in official communications and progovernment media as participants in a global threat, reputedly working against Hungary’s national interests and security by attacking traditional family values and facilitating international migration in order to replace the white, Christian population of Hungary.2 Following intimidating anti-NGO campaigns in 2017 and 2018, the year 2019 was relatively quiet as no substantial changes took place in the legal or political environment. Academic institutions, on the other hand, were under increased pressure.
  • In a number of cases, courts ruled in favor of NGOs in defamation suits stemming from the earlier anti-NGO campaigns. In September, Budapest-Capital Regional Court ruled that the public media, Fidesz, and the youth wing of KDNP had damaged the reputation of Menedék–Hungarian Association for Migrants when they accused the organization of “bringing illegal immigrants into the country,” among other accusations.3 The court issued a HUF 800,000 ($2,700) fine and ordered the defendants to make a public apology.4 In November, the Curia—Hungary’s highest court—upheld an earlier ruling of the Budapest-Capital Regional Court in favor of another NGO, the Hungarian Helsinki Committee (HHC), in a defamation case against the Hungarian government. The verdict required authorities to make a public apology and pay a HUF 2 million ($7,000) penalty for damaging the organization’s reputation by falsely stating in the 2017 “National Consultation” that HHC “supported immigration and defended unlawful acts committed by immigrants.”5
  • Laws restricting civic space remained unimplemented during the year. In 2017, the parliament adopted legislation similar to the Russian and Israeli “foreign agent” laws, which requires NGOs funded above a certain amount to register as “organizations receiving support from abroad.”6 Despite continued domestic and international criticism, including from the Venice Commission,7 the legislation remains unchanged. However, no organization was penalized for failing to register in 2019. Similarly, the 2018 “special immigration tax,” which requires organizations that “support immigration” to pay a 25-percent tax based on vague criteria, remained uncollected.8
  • Academic freedoms were under increased pressure during the year. As a result of the 2017 “Lex CEU,” which established new requirements for universities accredited abroad and specifically targeted Central European University (CEU)—a private university founded by Hungarian-American philanthropist George Soros—CEU was prohibited from enrolling new students in Budapest in 2019. Even though the university said it had met the new requirements, Hungarian authorities refused to countersign the intergovernmental agreement required by law. In September, CEU’s incoming students started the academic year in Vienna.9
  • In July, the National Assembly adopted a law reorganizing the network of research institutes of the Hungarian Academy of Sciences (MTA).10 Beginning September 1, the institutes as well as their properties were placed under the Eötvös Loránd Research Network, a newly established body with six members appointed by the government, six by the MTA, and a president jointly nominated by both (in 2019, a professor who had advised the prime minister for over a decade). Upon adoption of the law, the MTA stated that “the bill stands in contrast with basic European research funding principles and seriously endangers academic freedom,”11 and asked for a review by the Constitutional Court to determine any violations of the principle of academic freedom and MTA’s property rights.12
Independent Media 1.00-7.00 pts0-7 pts
Examines the current state of press freedom, including libel laws, harassment of journalists, and editorial independence; the operation of a financially viable and independent private press; and the functioning of the public media. 3.253 7.007
  • Since 2010, the ruling coalition has completely overhauled the media landscape through legal changes, media acquisitions, and political pressure.1 This unprecedented level of ownership concentration and direct political influence in the media sphere plays a crucial role in the ongoing process against the Hungarian government under Article 7 of the EU treaty.2 Centralization of the vast progovernment media empire—which began in 2018 when government-friendly businessmen transferred ownership of 476 titles for free to the Central European Press and Media Foundation (KESMA),3 a progovernment conglomerate—continued apace in 2019, with a focus on content production and the merger of editorial staffs and media companies.4
  • In February, an annual report prepared by partner organizations at the Council of Europe found that the government “exerts de facto control over most of the country’s media,” and that state-owned media are alarmingly centralized and politicized. The report expressed concerns about the grave situation faced by independent outlets, where problems include the “lack of advertising revenue, a restrictive regulatory environment, and public campaigns to discredit independent journalists.”5
  • Besides the increasingly hostile atmosphere and difficult financial situation, legal constraints on independent and critical outlets increased in 2019.6 After the parliament expanded protections for the private lives of politicians and their family members in July 2018,7 in October 2019, National Assembly speaker László Kövér announced new rules for journalists who report on the legislature, limiting their movement inside the parliament building, restricting them to a cordoned area, and discouraging unexpected questions. The new regulations also forbid audio and video recordings in the corridors surrounding the plenary chambers, in the cafeteria, and at entrances, and allow MPs to refuse to answer questions or terminate interviews at any time. Those who violate the new protocols may be banned from the plenary chambers and offices of the National Assembly. Critics argue that these new restrictions violate the public’s right to be informed and the right of journalists to cover issues relevant to citizens.8
  • In October, the mandates of four members of the Media Council expired. The council, a five-person regulatory body within the Media Authority,9 plays a key role in content regulation and has the right to nominate the executive directors of the public media. Since all candidates named by opposition parties were rejected by the ad hoc parliamentary nomination committee, the new council, similar to the previous one, consists exclusively of Fidesz nominees. The new members, elected by Fidesz-KDNP’s two-thirds parliamentary majority in early December, have strong links to the governing coalition (for example, one is a former Fidesz member of the EP, while another was the party’s communications director during the first Orbán government), which continues to raise serious doubts about the independence and unbiased work of the body.10
Local Democratic Governance 1.00-7.00 pts0-7 pts
Considers the decentralization of power; the responsibilities, election, and capacity of local governmental bodies; and the transparency and accountability of local authorities. 4.755 7.007
  • Since 2010, the central government has gradually curtailed local autonomies, including through the takeover of key public services, the redivision of tasks to newly established District Government Offices, and the radical transformation of funding sources available to local entities. Local and county-level government activities have been limited to their basic services, while substantial vagueness remains regarding the tasks and competences of different levels of public administration.1 In 2019, the governing coalition took steps to further decrease the autonomy and powers of municipalities.
  • In the 2019 municipal election campaign, government politicians—including Fidesz campaign chief Lajos Kósa,2 Minister of the Prime Minister’s Office Gergely Gulyás,3 and Viktor Orbán4 himself—repeatedly suggested that opposition-led municipalities might lose significant government funds. The opposition accused Fidesz of “threatening” and “blackmailing voters” and submitted a complaint to the National Election Committee for campaign violations. The complaint was rejected in September.5
  • In November, after the opposition’s success in the local elections, Fidesz-KDNP passed an omnibus law that withdrew extensive powers from municipalities in construction matters, transferring them from the local to the central level.6 Along with such competences as issuing building permits, the law also transferred all municipal assets and real estate necessary to perform these tasks to the Government Offices without compensation. As a result, municipalities will have practically no power to determine what and how to build on their own territories.
  • In both the EP and municipal election campaigns, local papers owned by municipalities were used for partisan ends.7 In May, one day before the EP elections, all county newspapers were published with identical front pages containing a picture of Prime Minister Orbán and a quote saying, “Pro-immigration forces will all be there. Let us be there too.”8 In the local election campaign, the municipal newspaper of the city of Baja published manipulated photos of opposition candidates, distorting their faces and darkening their skin color.9
  • In December, the newly elected opposition mayor of Budapest’s Józsefváros district published a number of emails showing that the news weekly funded by the municipality had been under the direct control of the former Fidesz leadership. According to the emails, the former mayors and an employee of the local Election Office were heavily involved in the paper’s content production.10 Earlier in October, the Curia fined the municipality HUF 500,000 ($1,800) due to the news weekly’s unlawful campaigning for the Fidesz candidate.11 Ironically, the fine will have to be paid by the new municipal administration.
Judicial Framework and Independence 1.00-7.00 pts0-7 pts
Assesses constitutional and human rights protections, judicial independence, the status of ethnic minority rights, guarantees of equality before the law, treatment of suspects and prisoners, and compliance with judicial decisions. 4.755 7.007
  • Since 2010, Fidesz-KDNP has reduced the powers of the Constitutional Court, packed it with loyal judges, and centralized court administration. While the judiciary retained independence through its self-governing body, in 2018 and 2019, a fierce conflict took place between the National Office for the Judiciary (NOJ), led by a close associate of Fidesz, and the National Judicial Council (NJC), a 15-member body of judicial self-governance entitled to supervise the actions of the NOJ.
  • In May, the European Association of Judges fact-finding mission published a report stating that “the Hungarian Judiciary is facing a kind of ‘constitutional crisis’ since May 2018 due to the activity of the President of the NOJ who denies any collaboration with the National Judicial Council.” The report also found that the NOJ’s extensive powers relating to the appointment and promotion of judges and the secondment of judges from one court to another were “particularly problematic under the aspect of judicial independence.”1
  • The NJC, elected in January 2018, repeatedly criticized NOJ president Tünde Handó for abuse of power, for her judicial appointments, and for giving way to political influence in the judiciary. In response, Handó declared the operation of the NJC illegitimate, refused to cooperate or provide requested data, and ignored the NJC’s warnings in several cases. In May 2019, the NJC proposed the removal of Tünde Handó from office, claiming that she had breached her duties and become unworthy of office.2 The proposal was refused by the Fidesz-KDNP majority without a substantial debate in the parliament.3
  • In November, the protracted conflict was resolved after Handó was elected as justice to the Constitutional Court, a year before the end of her term. Her successor, György Senyei, elected NOJ president on December 10 for a nine-year term, pledged to “place relations with the NJC on entirely new foundations, taking all possible steps to ensure harmony and order in the justice system.”4
  • Due to strong criticism and international pressure,5 the government suspended the establishment of a separate administrative court system in May, and officially abandoned the idea in November.6 The separate system would have resolved legal conflicts involving state offices, and would have had the final say in cases concerning taxes, environmental issues, public procurement, freedom of assembly, and election disputes.7
  • Still, court reform did not stop. In late November, the government submitted a new omnibus bill—without prior public consultation, a violation of law—proposing substantial modifications to the court system and the status of judges.8 Among numerous changes, the amendments allow administrative authorities to appeal to the Constitutional Court on unfavorable rulings by ordinary courts. In addition, members of the Constitutional Court may be elected as judges to the Curia after their mandates expire, even if they were not judges before being elected to the court. The Hungarian Helsinki Committee expressed concerns that these changes could allow the governing parties to pack the Curia with loyal judges,9 while the Council of Europe’s Commissioner for Human Rights argued that they “may have a negative effect on the internal independence of courts and judges and fair trial guarantees for individuals.”10 Still, the governing majority pushed the bill through in an emergency parliamentary session in December.
Corruption 1.00-7.00 pts0-7 pts
Looks at public perceptions of corruption, the business interests of top policymakers, laws on financial disclosure and conflict of interest, and the efficacy of anticorruption initiatives. 3.003 7.007
  • Corruption has long been a problem in Hungary. Yet, after 2010, the gutting of independent institutions, lack of transparency into government actions, and restrictions on media access to public-spending data have significantly worsened the situation. According to the 2019 assessment by Transparency International, Fidesz-KDNP has managed to incorporate corruption into the legal system as “a tool in the hands of the holders of public power.”1
  • In February 2019, the Hungarian government gave up on seeking EU funding for street-lightning projects run by Elios Zrt., a company co-owned by the prime minister’s son-in-law. To receive the money, the government would have had to disprove several irregularities that OLAF, the EU’s antifraud agency, had revealed. The tenders in question involved approximately HUF 13 billion (over $40 million).2
  • In July, the U.S. Department of Justice announced that Microsoft Hungary had been fined more than $8.7 million for a bid-rigging and bribery scheme related to the sale of software licenses to Hungarian government agencies between 2013 and 2015.3 In 2018, the Hungarian Prosecutor General’s Office dismissed the case referring to the absence of suspicion of criminal offense,4 but in August 2019, the Central Chief Prosecution Office launched a new investigation.5
  • In August, the Group of States against Corruption (GRECO) published three reports on the Hungarian government’s handling of corruption.6 Previously, the government had refused to consent to the publication of the documents.7 The reports expressed dissatisfaction with Hungary’s implementation of GRECO’s recommendations on the government’s system for declaring MP assets, as well as concerns about the independence of the judiciary, party funding, and corruption.
  • In September, OLAF released a report recommending the repayment of nearly 4 percent—the highest rate in the EU—of all development funding that went to Hungary between 2014 and 2018 due to evidence of misuse.8 From the agency’s nine investigations conducted in Hungary, seven were closed with recommendations.
  • In the 2019 municipal electoral campaign, an anonymous blog leaked sex tapes and other sensitive information about Zsolt Borkai, a former Olympic champion gymnast and Fidesz mayor of the city of Győr. Among other issues, Borkai was accused of extensive abuse of power, corruption, and drug use. Borkai, his son, and a lawyer had allegedly been involved in a corrupt real estate deal in 2012, when Immobilien Trade Center Inc., an offshore Hungarian company located in Luxembourg, made HUF 4 to 5 billion in profits by unlawfully trading publicly owned lands later purchased by Audi, and causing serious financial damage to the city of Győr.9 Even though reelected, Borkai resigned in November,10 and several investigations were launched into misappropriation of funds in the same month.11
  • Earlier, in August, the Central Chief Prosecution Office filed a lawsuit against Fidesz MP György Simonka and 32 other suspects for budget fraud carried out in a criminal organization causing especially serious financial damage and other criminal offenses.12 According to the allegations, the suspects unlawfully obtained nonrefundable grants from the European Agricultural Guarantee Fund intended for agricultural cooperatives. As stated in the indictment, Simonka not only attempted to obstruct the investigation but also successfully lobbied Fidesz to pass legal changes to reduce the criminal consequences of his actions.13
  • State spending continues to be extremely concentrated. For instance, in 2017, companies owned directly or indirectly by Lőrinc Mészáros, a close friend of the prime minister, won almost a quarter of all public tenders. In 2019, the Mészáros business empire broke a record for the value of its public procurement contracts: after winning tenders to the tune of HUF 299 billion ($917 million) in 2017 and HUF 265 billion (over $812 million) in 2018, it secured over HUF 400 billion (over $1.2 billion) in 2019.14 Nearly three-quarters of this sum came from the Budapest-Belgrade railway, mostly financed by a loan from the Chinese Eximbank.15
  • According to Transparency International’s 2019 Corruption Perceptions Index, Hungary placed 70th out of 180 countries—the third-most corrupt EU member state, together with Romania and just after Bulgaria.16

Author: Gábor Filippov is a political scientist and historian. In 2008–15, he worked as a political analyst in the think tank Hungarian Progressive Institute. Currently, he is a PhD candidate in Political Science, Public Policy, and International Relations at Central European University.

Note

The ratings reflect the consensus of Freedom House, its academic advisers, and the author(s) of this report. The opinions expressed in this report are those of the author(s). The ratings are based on a scale of 1 to 7, with 7 representing the highest level of democratic progress and 1 the lowest. The Democracy Score is an average of ratings for the categories tracked in a given year. The Democracy Percentage, introduced in 2020, is a translation of the Democracy Score to the 0–100 scale, where 0 equals least democratic and 100 equals most democratic.

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    70 100 partly free
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    72 100 free