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Opposition parties are turning to the Constitutional Court over the controversial law that outsources the operation of several universities and valuable state assets into foundations to be led by a number of figures loyal to the government. While PM Orbán spoke of both competitive and ideological reasons, a renowned constitutional lawyer also criticized the bill saying that it goes against democratic principles.

The law on public interest asset management foundations which the parliament approved on Tuesday, lists a total of 32 foundations, of which 21 will be in charge of running higher education institutions. The legislation is, however, a highly contested one as not only does the state lose oversight of thousands of billions in public funds, but also a number of government and/or Fidesz politicians or figures loyal to the government have been appointed to these foundations’ boards of trustees. Many thus fear that Fidesz and Orbán want to get their hands on state assets and build a deep state in an aim to keep wealth and influence for a long time.

Gov't Outsources State Assets and Unis to 'Raise Competitiveness,' Opposition Believes It's Robbery
Gov't Outsources State Assets and Unis to 'Raise Competitiveness,' Opposition Believes It's Robbery

The government's official reasoning is to raise competitiveness and efficiency.Continue reading

Therefore, criticism from the opposition hasn’t been toned down and the parties’ alliance has recently asked the court to annul the law while urging the government to “stop ransacking the country.” Their statement called it “unacceptable that the Orbán government, fearing an election defeat in 2022, is handing public funds to its strawmen.”

The statement labels the government’s arguments about greater autonomy and guaranteed financial acquisition a “pure lie,” noting that the “best universities in Europe are state-owned.” “This is nothing other than a money and power grab,” it reads.

The parties pledged to “return public funds to the people after the change of government in 2022, should the Constitutional Court prove again that they are mere puppets of the powers that be.”

Orbán: we don’t want globalists to take over the unis

In his weekly interview with state media, the Prime Minister finally also spoke of the restructuring. Viktor Orbán repeated the government’s arguments about the alleged inflexibility and inefficiency of the old system and Hungarian higher education as a whole. He also blamed the Socialist era in Hungary, saying that without nationalization, universities would now be in better shape. In addition, the world’s best universities work in the foundation model, he stated, setting the example for them in this matter.

Perhaps somewhat more interestingly, Orbán also spoke of the ideological considerations behind the restructuring and appointments. He said: 

The Left’s attacks against the change are politically motivated. The reason is that the Left in Hungary is an internationalist creation, while universities are national institutions. We don’t want them to become globalists, losing their national character. Of course they have to fit into the international space where they have to compete, but they have to compete as Hungarian universities. By the way, when we set up these foundations and invite the curators, we will be asking people who have this national approach. I can’t wholeheartedly nominate someone to the board of trustees who is internationalist-globalist. It is very good that now that we have a national government we set up our universities on a predictable path for the long run, because that way these universities will remain within the national interest and mindset.”

Constitutional lawyer draws parallels with Socialist state party’s asset rescue

A renowned conservative constitutional lawyer, however, sees the parallels between today’s ‘reforms’ and certain privatization tendencies before the regime change. András Jakab brings up an example when [ruling Socialist state-party of the era] MSZMP’s leadership, seeing that their political power was wavering, began to organize the state’s properties into a private company. But while three decades ago the state received money in exchange for the sold property, today this isn’t the case, he told conservative-leaning but government-critical Válasz Online.

In reaction to the government’s reference to international examples, he said he has yet to find any such example. What is more astonishing for him is that even the law itself neglects to refer to any of those examples. The pattern (in higher education) in which the government has to provide the resources, but profits and decision-making are completely taken out of its hands, he doesn’t think exists anywhere else.

While officially, independence from the various governments is the reason behind the new set-up, this is “strongly overshadowed” by the fact that politicians linked to the current government are put on the boards of trustees of the governing foundations, Jakab argued. These members couldn’t be recalled, and they would be in charge of deciding on the new members, instead of the (founder) state. 

In his view, it is already questionable whether public policy issues should be taken out of the hands of the respective governments at all. He also cites state oil company MOL’s shares as an example, bought back by the state for hundreds of billions of taxpayers’ money in 2011. Now the government transferred those stakes for free and if the foundations on the receiving end want to sell their package, the state could purchase them again for hundreds of billions, once again paying it out of taxpayers’ money.

The constitutional lawyer claims a lack of proper explanation behind the move, while taking away decision-making competencies from those in power in the future. The outsourcing process thus eliminates the element of responsibility- the basis of democratic decision-making. As a result, Jakab is convinced that the process goes against democratic principles.

featured image: demonstration against SZFE’s forced restructuring in September (illustration); via Márton Mónus/MTI