Expanding Freedom and Democracy
Nations in Transit 2021

Hungary

Transitional or Hybrid Regime
45
100
DEMOCRACY-PERCENTAGE Democracy Percentage 45.24 100
DEMOCRACY-SCORE Democracy Score 3.71 7
Last Year's Democracy Percentage & Status
49 100 Transitional or Hybrid Regime
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. See the methodology.

header1 Score changes in 2021

  • National Democratic Governance rating declined from 3.25 to 3.00 due to the unchecked expansion of Prime Minister Viktor Orbán’s executive powers in response to COVID-19, the government’s lack of transparent crisis communications, its focus on enacting far-reaching changes unrelated to the pandemic, and its policy of vilifying marginalized groups.
  • Civil Society rating declined from 4.50 to 4.25 because of a failure to implement a European Court of Justice ruling on foreign-funded organizations and increased pressure on academic freedom, including by means of the privatization of public universities in the hands of foundations staffed by ruling party loyalists.
  • Local Democratic Governance rating declined from 4.75 to 4.25 because the central government diverted tax revenue from municipalities through various fiscal instruments and because it failed to properly coordinate its response to the pandemic with opposition-run cities.
  • Judicial Framework and Independence rating declined from 4.75 to 4.25 because the ruling party strengthened its grip on the judiciary by expanding the powers of the country’s highest court, which it appointed a loyalist to lead.
  • Corruption rating declined from 3.00 to 2.75 to reflect the classification of details about a Chinese-funded railway project, the uncompensated transfer of state wealth to an educational organization tied to the ruling party, and the passage of a law limiting independent scrutiny of public funds.

As a result, Hungary’s Democracy Score declined from 3.96 to 3.71.

header2 Executive Summary

By Zsuzsanna Végh

In 2020, the right-wing governing coalition of Fidesz and the Christian Democratic People’s Party (KDNP) further consolidated the control it had gained over formerly independent institutions in the past decade after winning two-thirds parliamentary majorities in three successive elections. Throughout the year, the government actively undermined the country’s institutions, including the political opposition, the media, and above all, the courts, continuing its uninterrupted authoritarian streak and cementing Hungary’s place among hybrid regimes, in the “gray zone” between democracies and autocracies.

Although the government began the year focused on justice-related matters, the COVID-19 pandemic quickly took center stage when it reached Hungary in late-February. The first wave between March and June was marked by the introduction of a special legal order, a “state of danger,” which allowed the government to rule by decree. Subsequently adopted legislation known as the Authorization Act allowed the government to rule by decree on any matters as long as they are arguably connected with the management of the pandemic and lifted the constitutionally inscribed 15-day limit on the decrees’ force. While the unprecedented circumstances may have warranted the introduction of a special legal order, the necessity of the Authorization Act, which had no sunset clause, was widely disputed in the European Union (EU) and domestically.

Indeed, during the first wave of the pandemic, the government took full advantage of its expanded powers—passing decrees on matters that had little to do with the pandemic, claiming unjustifiable access to citizens’ personal data, and even limiting access to public information at a time when transparency was of critical value. Such decrees were accompanied by a flurry of legislative activity in the National Assembly—Hungary’s unicameral, 199-seat parliament—including on ideologically divisive matters that, in the context of the pandemic, were expected to receive less attention.

Access to information was hampered by multiple factors. An ambiguous amendment to the Criminal Code threatening imprisonment for spreading false information about COVID-19 led to self-censorship among journalists and discouraged their sources from sharing information. Daily press conferences about the management of the pandemic moved online, and questions from independent outlets were regularly ignored. Throughout the year, the government’s communications on its management of the unfolding health and economic crisis were untransparent, and the same could be said of its urgent medical procurement process.

The economic consequences of the crisis hit the service sector especially hard, leading to increased unemployment. Municipalities faced particular financial difficulties since some of their tax receipts were diverted to the central recovery fund. Lack of liquidity will remain a problem through 2021, as the responsibilities falling onto municipalities also increased during the pandemic. In this context, it became much harder for opposition parties to capitalize on the gains made in the 2019 local elections, whereas the government could easily continue pursuing its ideological and political agenda nationally with its two-thirds parliamentary majority.

Although the much-disputed state of danger and Authorization Act were withdrawn in June, the government made important changes to regulations of exceptional legal orders—like the state of medical emergency and the state of danger—thereby expanding the room for government action in the future. A state of medical emergency was introduced as soon as the state of danger ended, allowing the government to suspend certain fundamental freedoms. Additionally, in November, a state of danger was announced once again, and the validity of government decrees was extended from 15 to 90 days, well into 2021.

While in its rhetoric the government was promoting a family-friendly and Christian society, it waged an ideological war on the LGBT+ community throughout 2020, and with an amendment to the Fundamental Law it excluded rainbow families from Hungary’s already restrictive legal definition of family. Furthermore, it ruled out the possibility to change one’s sex in legal documents in the spring and bandwagoned on the extreme right’s anti-homosexual campaign in the fall. Anti-Roma slurs reentered the mainstream at the beginning of the year after Prime Minister Viktor Orbán commented degradingly on a court ruling that awarded compensation for segregated Roma pupils.

Government pressure also grew on independent media, which led to the shake-up of the Hungarian online media landscape. After feeling their editorial independence threatened by political interference and seeing their editor-in-chief fired, the journalists and editors at Hungary’s most widely read news portal, Index.hu, quit the site in July, drawing international attention. Seizing the momentum, the staff launched the country’s most successful crowdfunding campaign of its kind to date, providing the means to launch the new independent news site Telex.hu in October. Protests unfolding at the University of Theatre and Film Arts (SZFE) from September on drew comparable international attention and support. Despite the pandemic, students and academic staff demonstrated nonstop for months demanding SZFE’s academic autonomy be respected and decrying the organizational reforms introduced by the government, which have increasingly undermined the independence of Hungarian universities.

Similarly, the independence of the judiciary has been heavily curtailed by reforms adopted in 2019. The introduction of a new limited precedent system and legal unity review procedure has strengthened the role of the Curia, Hungary’s highest court. Meanwhile, further changes enabled the governing coalition to install a loyalist as Curia president, unprecedentedly strengthening its grip on the judiciary.

A series of rulings from the European Court of Justice (ECJ) found Hungarian legislation to be in breach of EU law, including asylum-related legislation concerning automatic rejections and transit zones at the border, as well as the so-called Lex NGO and Lex CEU. Despite the ECJ ruling, the latter two laws were not withdrawn in 2020. Moreover, Lex NGO was applied by a state foundation for the first time after the ruling, suggesting unwillingness by officials to comply with a binding ECJ decision.

At the end of the year, both governing and opposition parties were preparing for the 2022 parliamentary elections. The government’s tone throughout the year suggests that it will not moderate but rather continue to play on nativist emotions, mobilizing along cultural-ideological issues and turning up attacks on designated internal and external enemies. While 2020 was not favorable to opposition parties, the year’s by-elections signaled their continued willingness to coordinate in the next parliamentary elections. In fact, in December, six opposition parties announced they would field a joint list in the 2022 parliamentary elections. Their early decision, however, is due to the government’s latest amendment to the electoral code, which, by introducing stricter requirements for party lists, excluded other strategic choices. How the ongoing pandemic, which is putting the healthcare system under unprecedented strain, plays out in Hungary has the potential to significantly alter the parties’ positions, chances, and potential campaign focus in the year to come.

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. 3.003 7.007
  • In response to the COVID-19 pandemic, the Hungarian government declared a state of danger1 on March 11.2 On March 30, the governing parties’ two-thirds parliamentary majority passed the Authorization Act,3 allowing the government to rule by decree, and to suspend or alter existing legislation in any field as long as the measures are arguably connected to the management of the pandemic. The Authorization Act significantly expanded the scope of potential decrees the government could adopt in the event of a state of danger compared to the scope specified in the country’s Disaster Management Act. It additionally lifted the 15-day sunset clause stipulated by the Fundamental Law on government decrees adopted during the state of danger. Government decrees adopted after March 30 could therefore stay in force until the state of danger was revoked.
  • The government used the guise of the pandemic to advance its political agenda in parliament on ideologically divisive issues, as well as on matters that may have otherwise attracted more attention, like the operational reform of certain universities (see “Civil Society”) or the classification of the Budapest-Belgrade railway project (see “Corruption”). It also passed decrees with arguably no connection to the crisis, such as the takeover of the management of a private packaging company4 or the establishment of a special economic zone in Göd (see “Local Democratic Governance”).
  • On June 16, the governing majority passed the Act on Transitional Provisions,5 which amended the Disaster Management Act to expand the scope of issues on which the government may rule by decree during future states of danger, thus transposing one of the most problematic elements of the Authorization Act into new law. Additionally, it amended the description of the state of medical emergency in the Health Care Act to allow governance by decree in ways that potentially limit even certain fundamental rights. On June 18, the Authorization Act and the state of danger were revoked,6 but the declaration of a state of medical emergency7 entered into force the same day. It was to remain in force for six months and would be renewable without any parliamentary control.8 However, another state of danger—with an expanded scope for potential action laid out in the recently amended Disaster Management Act—was declared on November 4.9 On November 10, the parliament passed a law allowing decrees issued during this state of danger to remain in force for 90 days, this time adopting a sunset clause.10
  • The government continued to target various vulnerable groups for political gains. In January, Prime Minister Viktor Orbán criticized a court decision ordering compensation for segregated Roma pupils, remarking that “Roma started to have the impression that they were the majority.”11
  • Further attacks mainly targeted the LGBT+ community. May amendments to the Civil Registry Act replaced the term “gender” with “sex at birth” in the civil registry and forbid the alteration of entries. This made changing one’s officially declared gender legally impossible in Hungary.12 In fall 2020, the vice-president of the extreme right Our Homeland Movement publicly shredded a children’s book promoting tolerance toward LGBT+ people, arguing that it constituted “homosexual propaganda.”13 Subsequently, leading government figures, including Orbán, spoke out reinforcing the extreme right’s narrative.14 Two Fidesz-led municipalities later banned the book in kindergartens.15 In November, the government proposed an amendment to the Fundamental Law that would introduce into its preamble a passage that further restricts the definition of a family, stating that “the mother is a woman, the father is a man.” Furthermore, it introduced the constitutional protection of children’s rights to an identity corresponding to their sex at birth and to an upbringing that reflects the values based on Hungary’s constitutional identity and Christian culture. The governing parties passed the ninth amendment of the Fundamental Law in December.16
  • In November, the governing parties voted to abolish the Equal Treatment Authority (ETA), Hungary’s equality body, transferring its tasks and competences to the Commissioner for Fundamental Rights (Hungary’s ombudsperson), effective as of January 1, 2021.17 Though the impact of this move on the quality of human rights protection remains to be seen, watchdog groups raised concerns that the tools and practices of the ombudsperson are insufficient to replace those of the ETA, and because the current ombudsperson himself been silent on human rights violations over the past year.18
  • Hungarian refugee policy became even more restrictive in 2020. In May, the European Court of Justice (ECJ) ruled that automatically rejecting asylum requests of asylum-seekers arriving through countries that the Hungarian government had declared “safe transit countries” was against EU law. It also declared that keeping asylum-seekers in so-called transit zones at the border constitutes unlawful detention and must be limited to 28 days, following which asylum-seekers must be transferred to reception facilities until their case is processed.19 In response, the government shut down the transit zones, and in the Act on Transitional Provisions, it further limited access to the asylum procedure. Asylum-seekers now must submit a request at Hungary’s embassies in Belgrade or Kyiv to be allowed to enter Hungary to then submit their asylum claim,20 which in practical terms makes asylum in Hungary virtually unattainable. In December, the ECJ found that the practice of pushbacks—that is, the forcible removal of anyone found to be illegally in Hungary without granting them access to the asylum process—is in breach of EU law.21 The practice has been ongoing since 2016 and did not cease after the ECJ ruling.22
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
  • With the adoption of the Authorization Act, all local and national by-elections and referendums were postponed until after the state of danger was revoked, which affected a number of by-elections.
  • By-elections took place for members of parliament (MPs) in two single-mandate districts in 2020.1 The first was held in February in Dunaújváros, where the incumbent Jobbik representative resigned from his parliamentary seat after being elected city mayor in 2019; another Jobbik candidate won to hold the seat.2 The second by-election in October in Tiszaújváros/Szerencs followed the death of Ferenc Koncz, a Fidesz MP, in a traffic accident in July. With his death, the governing Fidesz-KDNP coalition temporarily lost its two-thirds majority until Zsófia Koncz, the late MP’s daughter and former vice-president of Fidesz’s youth wing, won the mandate.3 In both by-elections, the political opposition united behind a single candidate.
  • An amendment to the electoral code, adopted in December, introduced stricter criteria for registering national lists in the parliamentary elections.4 To qualify for registering national lists, parties must field candidates in at least 71 of the 106 single-mandate districts across a minimum of 14 out of 19 counties, instead of the earlier 27 districts across 9 counties. While the government justified the amendment as a move to prevent “fake” parties from running,5 the new rules directly impact the opposition. In August, six opposition parties (Democratic Coalition, Dialogue for Hungary, Hungarian Socialist Party, Jobbik, Momentum, and Politics Can Be Different) pledged not to compete against each other in single-mandate districts in order to improve their chances of defeating Fidesz-KDNP.6 Mathematically, they can only keep this commitment under the new rules if they field one joint national list in the 2022 election.7 On December 20, they publicly committed to do so.8
  • Though overdue and recommended by the National Election Office (NVI) due to Hungary’s population changes, 9 the electoral code amendment did not adjust the electoral map, nor did it address the law’s shortcomings that facilitate so-called vote tourism, that is, the strategic registration of citizens in certain constituencies ahead of elections in order to influence the outcome.10
  • Ilona Pálffy, head of the NVI since its establishment in 2013, resigned in August, two years before the end of her term.11 She announced her intention not to oversee the 2022 elections in 201912 following wide criticism over the conduct of elections on her watch, including vote tourism and an election website collapse in the 2018 parliamentary elections. Her successor, former deputy secretary of the Interior Ministry Attila Mihály Nagy, was recommended by PM Orbán and nominated by President János Áder in September.13
  • The government redirected 50 percent of all parties’ state funding to the economic recovery fund in 2020. Such loss of revenue hit opposition parties disproportionately hard,14 especially the extra-parliamentary ones, which have no access to resources from parliamentary factions either.
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. 4.254 7.007
  • The government limited public assembly once the COVID-19 pandemic reached Hungary. Prior to that, thousands demonstrated in Budapest in February for an independent judiciary and against discrimination in response to PM Orbán’s anti-Roma remarks.1 The mainstreaming of anti-Roma rhetoric emboldened the extreme right. Organized by the Our Homeland Movement, anti-Roma protests took place in February in Miskolc and Sály,2 and in May in the capital city, the latter bringing thousands to the streets.3 Although restrictions on public assembly due to the pandemic were already in place by May, police intervention on the extreme right’s demonstration was marginal. By contrast, over a hundred participants in a series of April-May “honking demonstrations” organized by opposition politician Bernadett Szél were fined hundreds of euros despite respecting the restrictions and demonstrating in their cars.4
  • In June, the ECJ found that the so-called Lex NGO was in breach of EU law.5 Adopted in 2017, the law requires NGOs to register as “organizations funded from abroad” if they receive financial support from non-Hungarian donors above a certain amount. The government took no steps to revoke the law until late October when the governing parties uncharacteristically took up an opposition bill initiating its revocation.6 The initiative, however, was not carried through in 2020. In September, after the ECJ ruling, the law was applied for the very first time when the Tempus Public Foundation, operating under the Innovation and Technology Ministry (ITM), requested NGOs to submit a declaration about their potential foreign-funded status along with their EU Erasmus+ grant applications. One NGO lost a grant it would have otherwise received after refusing to submit the declaration.7
  • Pressure on academic freedom continued in 2020. Over the course of the year, the government partially privatized and overhauled the operation of eight universities,8 placing them under the control of newly established asset-management foundations run by boards appointed by the ITM. After the reform, the universities’ state financing will be based on 3-to-5-year framework agreement. The foundation boards were filled with Fidesz politicians and progovernment entrepreneurs.9 An amendment to the Higher Education Act,10 adopted in May, gives these foundations autonomy from the state but grants their boards with powers that can sideline the universities’ academic leadership, thus limiting academic autonomy.
  • The organizational reform of the University of Theatre and Film Arts (SZFE), coupled with a cultural-ideological clash between the university and the newly appointed leader of its operating foundation, Attila Vidnyánszky, faced opposition from the students and the academic leadership. After their proposals were ignored by the foundation’s board,11 SZFE’s leadership, senate, and several professors resigned, while students occupied the university buildings and mobilized thousands of supporters to demonstrate.12
  • In August, the ITM unprecedentedly interfered with an evaluation by the scientific committee of one of the National Research, Development and Innovation Office’s most important grant programs by modifying the list of winning projects and thus overriding the scientific opinion of the evaluators, provoking outcry.13
  • In October, the ECJ ruled that the 2017 amendment of the Higher Education Act is incompatible with EU law.14 The so-called Lex CEU required foreign-accredited universities teaching in Hungary to have a campus in the country of accreditation. This requirement singled out the Central European University (CEU), founded by Hungarian-American billionaire George Soros. Though the amendment must be revoked in line with the ECJ decision, CEU had already been forced to move its academic programs abroad.
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
  • The Hungarian media landscape continues to be dominated by progovernment media outlets operating under the umbrella of the Central European Press and Media Foundation (KESMA). A complaint raised before the Constitutional Court about the competition exemption that allowed KESMA’s creation1 was dismissed in February.2
  • As part of the Authorization Act, an amendment to the Criminal Code was passed that punishes with imprisonment those who spread falsehoods or distorted facts that could alarm the public during a state of emergency, or information that inhibits successful defense against the pandemic. The amendment’s ambiguous formulation had a chilling effect on journalists and their sources, triggering self-censorship.3 Though journalists were not targeted, subsequently, some people were taken for questioning by police after having expressed critical opinions on social media about the government’s handling of the pandemic.4
  • During the initial state of danger, access to information was limited by the government’s Operational Staff,5 who moved their daily press conferences online shortly after the public measure was declared. Consequently, journalists had to submit their questions via email, which led to questions from independent media being sidelined in press conferences.6
  • Access to information was further hampered by the Ministry of Human Resources forbidding hospitals to provide information about the pandemic in April.7 Furthermore, in May, the deadline for mandatory responses by state institutions to public information requests—critical for journalists who might never receive responses from officials otherwise—was extended from 15 to 45 days during the state of danger, with a potential additional 45 days if the request concerns a significant amount of data.8 The practice was reintroduced during the pandemic’s second wave.9
  • After a number of disputes over (perceived) attempts to exert political influence on Index.hu, Hungary’s leading independent online news site,10 editor-in-chief Szabolcs Dull was dismissed by company leadership in July.11 Doubting their continued independence, the editorial board and almost all of the site’s journalists resigned.12 Thanks to an unprecedentedly successful crowdfunding campaign, the staff launched a new independent news site, Telex.hu, in October.13 Telex.hu’s long-term viability remains to be seen. Index.hu was later sold to progovernment business circles.14
  • The National Media Council, claiming technical breaches of the media law, announced in September that the broadcast license of independent radio station Klubrádió would not be renewed when it expires in February 2021 and its frequency would be put up for tender.15
  • After 27 years, the U.S.-backed Radio Free Europe/Radio Liberty relaunched its operation in Hungary in September as a website;16 this move reflected concerns by the U.S. Congress over the state of media pluralism and press freedom in the country.17 In November and December, Szabad Európa (RFE/RL) reported on how government influence distorts the work of the public television and state-owned Hungarian News Agency (MTI) wire service.18
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. 4.254 7.007
  • Throughout the year, the government withdrew resources and competences from local authorities. An amendment transferring oversight powers on construction matters from municipalities to central government officials in government offices, adopted in November 2019, entered into force in March 2020.1
  • In April, the government reallocated financial resources for its COVID-19 defense fund and economic recovery program.2 Among these changes, the reallocation of the vehicle tax (HUF 34 billion in 2020) affected municipalities in particular,3 especially since these funds were flexibly allocatable. Although the vehicle tax typically amounts to under 2 percent of local budgets, its reallocation caused liquidity problems for over 60 percent of the municipalities surveyed by the National Association of Local Authorities (TÖOSZ),4 which had to undertake additional tasks due to the pandemic.
  • Municipalities suffered additional revenue losses from a drop in the tourism tax5 and business tax paid by locally registered companies, and, especially in Budapest and bigger cities, from parking fees, which were lifted during the state of danger.6 As TÖOSZ reported, 65 percent of municipalities could not make up the losses through temporary measures, and over half had financial reserves for only two months at most.7
  • As of year’s end, the 2021 state budget was set to continue withholding the vehicle tax from municipalities.8 Additionally, the calculation method of a so-called solidarity tax, which municipalities pay into the state budget based on their local business tax revenues, will also change, resulting in a broader circle of municipalities obliged to pay higher contributions to the state budget and leaving many with even fewer resources.9 Moreover, a government decree in December halved the local business tax for certain enterprises for 2021,10 while another forbade municipalities to introduce new or increase current local taxes11 until the end of the state of danger in 2021.12 By year’s end, Budapest had calculated an expected loss of HUF 88 billion in income for 2021.13
  • To address the economic consequences of the pandemic, a government decree passed in April allowed the establishment of special economic zones during the state of danger within municipal territory where investment projects of HUF 100 billion or more are implemented. When these economic zones are created, real estate and the right of local business tax collection will be transferred to the county level.14 Subsequently, the government designated one-fifth of Göd, an opposition-led small town in Pest county, as a special economic zone and transferred the construction site of Samsung’s electric car battery plant to the county, which is led by the governing parties.15 This move alone stripped Göd of one-third of its revenues.16 As no special conditions were granted to Samsung, the government action was widely seen as politically motivated.17 Opposition MPs filed a complaint to the Constitutional Court about the decree, but it was dismissed in October.18
  • A bill adopted in June allows the government to designate the territory of investment projects of HUF 5 billion or more as special economic zones also outside of the state of danger and anywhere in the country except in Budapest, its districts, and cities with county rights.19 The law was criticized as incoherent with existing legislation and for lacking clear guidelines.20
  • Throughout the COVID-19 pandemic, mayors of opposition-run municipalities accused the central government of failing to share relevant information or otherwise coordinate public health measures.21
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. 4.254 7.007
  • Prime Minister Orbán, on multiple occasions in early 2020, publicly questioned Hungarian court decisions as unjust.1 In one case, a lower court awarded financial compensation to Roma from Gyöngyöspata who, as children, were segregated from other pupils in school. Orbán disputed the legitimacy of the compensation while the case was still awaiting a decision from the country’s highest court.2 He also spoke out against decisions compensating inmates for the conditions of detention in Hungarian prisons, and instructed the Minister of Justice not to pay such compensations.3 Subsequently, the government announced a “national consultation” on justice-related issues.4 The planned consultation did not take place amid the pandemic; however, such remarks by the government risk undermining trust and respect for the independence of the judiciary.
  • In February, the governing parliamentary majority suspended the payment of compensations for inmates until June and ordered the government to ensure by September that prisons are not overcrowded.5 The suspension of compensation payments was prolonged in May until the end of 2020.6 In the Gyöngyöspata segregation case, compensation was finally paid,7 but the governing majority passed an amendment to the National Public Education Act in July that allows redress only in the form of training and education instead of financial compensation in future segregation cases.8
  • The decisions in these cases illustrate that lower-level courts were still able to exercise their independence, even when their rulings conflicted with government preferences. Similarly, the regional court in Miskolc turned to the Constitutional Court in November to challenge the constitutionality of the government’s amendment to the Civil Registry Act9 (see “National Democratic Governance”).
  • Several changes introduced in the omnibus bill adopted in December 2019 entered into force in 2020.10 Although in 2019 the government abandoned the previously planned introduction of an administrative court system, the administrative segment of the justice system nonetheless underwent a reform in 2020. Administrative and Labor Courts were abolished in April, and administrative cases were channeled into the regular court system. They were taken over at first instance by eight regional courts and at second instance by Hungary’s highest court, the Curia. In certain cases, like those concerning the right of assembly, the Curia is empowered to rule exclusively, essentially making decisions on such cases unchallengeable.11
  • The role of the Curia itself was further strengthened by the introduction of a “limited precedent system” in April: lower courts are now required to consider as precedent all statutes and interpretations adopted in the decisions of the Curia that were published in the Collection of Court Decisions. They can deviate from those only in limited cases and must justify their reasons.12 Complementing this, the omnibus bill of 2019 introduced the so-called legal unity review, which is to be undertaken by an extended panel of the Curia when a new court ruling is not in line with an existing precedent. The president of the Curia may act as the president of the panel and nominate the rest of its members. If a discrepancy is found, the panel determines what the binding interpretation of the law shall be.13
  • The 2019 omnibus amendment allowed justices of the Constitutional Court to be nominated as ordinary judges (positions they might not otherwise be qualified for) and thereby making them eligible for the Curia.14 Consequently, in July 2020, eight Constitutional Court justices were named judges, among them Zsolt András Varga.15 Varga, who has been a member of the Constitutional Court since 2014, is a law professor, member of the Venice Commission, and former deputy to State Prosecutor Péter Polt. Shortly after receiving his title, President Áder nominated Varga to the position of Curia president, although he had never practiced as a judge in the Hungarian system. The National Judicial Council, the country’s top professional forum of judges, opposed his election,16 but the governing parties’ two-thirds majority elected Varga anyway, with his nine-year mandate starting in January 2021.17
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. 2.753 7.007
  • Hungary remained noncompliant with the majority of recommendations made by the Group of States against Corruption (GRECO), having implemented only 5 of 18 recommendations concerning corruption risks in the judiciary and the parliament.1
  • Published in September 2020, the 2019 annual report of the European Anti-Fraud Office (OLAF) recommended the repayment of 3.93 percent of all EU structural and agricultural funds spent in Hungary between 2015 and 2019 due to evidence of misuse,2 which was the highest rate among EU Member States. OLAF conducted five investigations in Hungary in 2019 and closed two.
  • Corruption risk in public procurement through contracts awarded without competition reached its highest point in 2020 during the COVID-19 pandemic, as 41 percent of state tenders were noncompetitive. Between January and April, 27 percent of the net contract value awarded in tenders was won by entrepreneurs close to the government, and 68 percent of these tenders were awarded without competition (an increase from 21 and 51 percent, respectively, in 2019).3
  • A government decree in March4 allowed state institutions to conduct pandemic-related urgent procurements, upon individual exemptions, without tenders. While this practice may be justified in the given context, it was strikingly untransparent.5 Through some of these procurements, the government spent more than HUF 300 billion on 16,000 ventilators, paying a higher average price than any other EU member state.6 Concrete details of these procurements remain unknown.7
  • Several questionable deals and measures were concluded in the shadow of the pandemic. In March, the state-owned power company MVM completed the acquisition of Hungary’s second largest electricity producer, the Mátra Power Plant, for HUF 17.44 billion from a company owned by Lőrinc Mészáros, PM Orbán’s close friend, who bought the plant just two years earlier for HUF 5.9 billion and had since bankrupted it.8
  • In May, the parliament classified for ten years all documents regarding the modernization of the Budapest-Belgrade railway,9 Hungary’s largest railway development project to date worth over $2 billion, financed largely from a 20-year Chinese Eximbank loan. The implementing consortium contains a company owned by Mészáros.10
  • In June, the governing parliamentary majority handed over the state’s ownership of 10 percent of MOL (oil) stocks and 10 percent of Gedeon Richter (pharmaceutical) stocks—worth about 170 and 120 billion HUF, respectively—to the Tihanyi Foundation, the asset-management foundation of the private Mathias Corvinus Collegium. The Maecenas Universitatis Corvini, the asset-management foundation of the privatized Corvinus University of Budapest, received a package of the same composition11 after having already benefitted from the stock dividends in 2019. The leadership of both foundations is close to the governing party.12 With the ninth amendment13 to the Fundamental Law (see “National Democratic Governance”), the governing parties set a two-thirds parliamentary threshold for creating and amending the operation of such asset-management foundations fulfilling a public duty, making the foundations essentially untouchable and unaccountable. Additionally, the ninth amendment introduced the highly restrictive definition of public funds as the income, expenditure, and claims of the state, thus limiting independent scrutiny of state wealth transfers in the future.14
  • Interlinkages between the country’s governing and business elite are manifold, and well-illustrated by the example of Foreign Minister Péter Szijjártó, who was caught holidaying in August on the luxury yacht of Hungarian billionaire László Szíjj, a main beneficiary of public procurements under Fidesz governments.15 There were no consequences for the foreign minister despite the apparent ethics violation.16
  • Court hearings started in October in the case of György Simonka, a Fidesz MP accused along with 32 other suspects of budget fraud carried out in a criminal organization as well as other criminal offenses. With financial damage amounting to HUF 1.4 billion, this is the biggest corruption case in the past few years in which charges were successfully brought.17 In a different case, upon the initiative of the State Prosecutor, the immunity of Fidesz MP István Boldog was lifted in April over allegations of abuse of office and bribery.18
  • The Special Eurobarometer survey conducted in December 2019 shows that 87 percent of citizens think that corruption is widespread in Hungary, and 57 percent think that it has increased over the past three years.19 According to Transparency International’s 2020 Corruption Perceptions Index, Hungary placed 69th out of 180 countries.20

Author: Zsuzsanna Végh is a lecturer and research fellow at the Chair of Comparative Politics, European University Viadrina, and an associate researcher at the European Council on Foreign Relations.

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Country Facts

  • Global Freedom Score

    66 100 partly free

  • Internet Freedom Score

    69 100 partly free