"The government is using the pandemic to redirect state funds to its domestic and foreign clientele"

Interview with József Péter Martin, Managing Director of Transparency International Hungary, that was initially published in the 87. edition of the magazine Scheinwerfer.

Eine deutsche Version des Interviews finden Sie hier.

Due to the Corona crisis the Hungarian parliament adopted a controversial emergency law (“Authorization Act”) on March 30th, 2020, that gives Prime Minister Viktor Orbán far-reaching power. How do you assess the emergency law?

Transparency International (TI) Hungary has been criticizing the Authorization Act at two important points. As it can be read in our statement released after the bill was approved, our primary criticism is about the indefinite period of the state of danger often referred as to state of emergency. Undoubtedly, this is the most disquieting issue because it empowers the government to rule by decree without time limitations and without the Parliament’s approval. We do not criticize the extended power that the government asked to contain the pandemic in itself, but in our firm opinion, it should have been limited to a predefined period of 30, 60 or maximum 90 days and ought to have been subject to parliamentary review. Introducing the state of danger for an indefinite period would only be necessary if the Parliament is unable to assemble, a situation that is unlikely to occur. Having said that, I need to make it clear that the Parliament is still operating in Hungary and the supermajority of Orbán’s party approves the laws one after the other. Moreover, on May 15 Orbán claimed the government would give back the extra authorization by the end May. What is more disturbing that they use the opportunity that people are concerned with the situation caused by the coronavirus pandemic for the purpose of pushing through some dodgy deals as well as funneling public assets to cronies.

Are you concerned that Hungary becomes a dictatorship if there is no limitation of rule by decree?

I do not see this big shift. I think that, although the Authorization Act is clearly problematic and at some points might even be against the Hungarian Fundamental Law (Constitution), but Hungary is still not a dictatorship. I find it a little weird that some observers, journalists and academics portray the situation as if Hungary turned from democracy to dictatorship overnight. The situation is more nuanced. The democratic recession in Hungary started nine-ten years ago. Since 2010-2011, the over-centralization, state capture and rule of law backsliding have been continuous. I remind you that TI Hungary was the first entity in the country which declared that the state is captured, back in 2012.

Even before the current outbreak, Hungary could not be labelled as a Western-type democracy. There is a bunch of literature what kind of regime has been built by Orbán, and there is no way to go into details this time, but in simple terms it has been and still is a kind of hybrid regime between (liberal) democracy and dictatorship. Despite the unlimited timeframe of the Authorization Act which probably will end anyhow soon, I think that the ‘hybrid regime’ is the appropriate label for the description of the regime and not the ‘dictatorship’.

Living in Hungary, we see that longtime tendencies of this corrupt regime such as centralization or cronyism prevail. Our experience of the past years shows that some measures and bills that the Orbán regime introduced have become kind of “dead letters” as they have not been implemented. That happened with the law on “foreign funded organizations”, a milder form of Russian “foreign agent” act, and with the totally obscure legislative package coined “Stop Soros”. TI Hungary bluntly rejected these laws and turned to international institutions for their annulation. But we should see that most of these laws’ provisions have remained as “dead letters” as they have not been executed. Just two examples: contrary to the wording of the law, there has been no special tax for organizations “promoting migration”, and there are no sanctions if a “foreign funded” NGO does not declare this stigma (‘foreign funded’) regularly. These laws serve more like symbolic and manipulation tools. That might be the case with the Authorization Act as well. Nevertheless, in a system without checks and balances one never knows when these “dead laws” are revivified by Orbán.

Are there any other provisions of the Authorization Act that you think are problematic or unconstitutional?

Apart from the unlimited timeframe, TI Hungary has been criticizing that according to the law “fear mongering” can entail imprisonment of up to five years. Although distribution of some fake news concerning the pandemic should be punished, we think that this provision is way too vague and might be discretionally abused by the power. The introduction of this new standard for the imposition of criminal punishments might lead to the conflation of government-critical journalism with fear mongering. Although I do not think that this is an imminent danger that journalists will be imprisoned, an event that has not happened yet under the Orbán regime, this provision might be perceived as a new tool to intimidate the remaining part of the free media. I think and hope that this part of the Authorization Act will not be abused and extended unduly. And again, the backsliding of the media freedom started many years ago, and been accelerated since 2016. This is primarily not because of the regulation but due to persistent takeover of government-close business players and oligarchs who have acquired lots of media outlets, and made them part of the propaganda machine.

You said that centralization and cronyism have accelerated after the outbreak of the pandemic. Can you provide some examples?

Unfortunately, the list is long. Hungary, even before the current Covid-19 crisis, was the most centralized country in the European Union. Recently, this trend has been amplified by measures such as depriving local governments from a significant part of their revenues. The so called “vehicle tax” was taken away from local entities administratively by the government and has been redirected to state budget. Moreover, a recent decree of the government establishes “special economic zones” in order “to mitigate the economic impact of the pandemic” which implies for example that a small town to the North of Budapest, Göd, where a Samsung factory is located, will be deprived of its local company tax, that entails a third of its total income.

As a proof of “acceleration” of cronyism and systemic corruption, a number of government stakeholders have recently got significant state assets. For example, a hunter association linked to Deputy Prime Minister Zsolt Semjén got 1.7 billion Hungarian forints (EUR 5 million). Some prestigious-for-the-government and dodgy investments are pushed through the legislative process urgently and by force, the biggest among them is the obscure deal with the Chinese on a Budapest-Belgrade trainline. In these and many other cases the government uses the current situation when people are concerned with the pandemic and its implications, to redirect public money and assets to the domestic and foreign clientele of the regime.

What do you expect from the EU and what can other governments do?

The challenge for the EU with or without the pandemic is the same: what to do with those member states which systematically have breached the rule of law. With over-centralization, Hungary probably deviated mostly from the Western ideal type of democracy and made a U-turn in this respect. The idea to link the rule of law issue with the EU funds is welcomed by TI Hungary, but we do not see yet how effectively can and will it be implemented. A workable idea could be that some of the funds are redirected from the central governments toward local and regional entities. Besides technicalities, the political commitment is also crucial. As the multilevel governance of the EU is a very complex game, the interests might and usually do point out to different solutions. But no doubt that the international community should follow closely what is happening in Hungary and other countries. The pandemic might have contradictory effects to supranational relations as, on the one hand, probably it will strengthenthe “nation state” and populism, but, on the other hand, will show that individual countries are too small and mean-less to handle the crisis.

How does the current situation affect the work of Transparency International Hungary?

From mid-March we have been working from home. Fortunately, there is no major disruption in our activities although obviously all events and conferences had to be postponed because of the lockdown. We are in touch with our donors of which by far the biggest one is the European Union. They seem to be supportive and acknowledge the transitory postponement of some activities that involve personal presence and encounters.

Questions: Sylvia Schwab