Unbelievable Discoveries in the Heart of the EU

A visit by the EU Budget Control Committee to Hungary reveals the drastic measures taken by the Orban government to pressure foreign companies into yielding business shares to their loyal associates

Unbelievable Discoveries in the Heart of the EU

A visit by the EU Budget Control Committee to Hungary reveals the drastic measures taken by the Orban government to pressure foreign companies into yielding business shares to their loyal associates.

Unfathomable, What You Find in the Heart of the EU

A visit from the EU Budget Control Committee to Hungary unveils the shocking extent to which the Orban government coerces foreign companies, within the confines of the EU, to relinquish their business shares to cronies.

Monday afternoon in Budapest: Members of the EU Budget Control Committee in the European Parliament gather outside the EU office. They have allocated three days to investigate the improper use of EU funds in Hungary. Their arrival, however, is far from welcomed.

The EU parliamentarians are received by young members of Hungary’s ruling party, Fidesz. They carry suitcases adorned with the EU flag, a picture of the corrupt Greek representative Eva Kaili, and a briefcase filled with play money. It is a political gesture. Dora Hidas, the spokesperson for Fidesz Youth, delivers a clear message: “There is no corruption in Hungary. Hungary boasts the strictest anti-corruption agency in all of Europe.”

However, the EU representatives have come to Hungary precisely because of the rampant corruption in the country. When it comes to combating corruption, Hungary is at the bottom of the list. Daniel Freund, a Green Party Member of the European Parliament, states, “Every time you come to Hungary, you hear an even worse story. It’s unbelievable what you find in the heart of the EU.”

Companies Report Harassment

The most harrowing stories are recounted to the parliamentarians by representatives of European companies. These managers oversee branches of German, Austrian, or French companies and confidentially share the ordeal they face, being subjected to harassment and pressure to surrender business shares to government-affiliated oligarchs. The meeting is delicate. Due to fearing reprisals, the managers refuse to be filmed or provide statements.

After the meeting, it is the parliamentarians who relay the accounts. Monika Hohlmeier, a politician from the Christian Social Union (CSU) and Chair of the EU Budget Control Committee, finds herself reminded of communist times. For instance, when managers describe armed intelligence agents presenting them with takeover offers for their companies. Hohlmeier unveils a seemingly common practice: “Someone regularly appears, inquiring if they could buy the company at a bargain price. If the company responds, stating its intention to continue operating and even expand, then the renewed harassment begins. It can even extend to visits to families at their homes.”

Additionally, there are inspections and official orders. Often, permits to participate in EU funding programs are withheld. The companies are intended to be worn down for a forced sale. “And if they still resist,” reveals Monika Hohlmeier, “new measures are taken. If there’s a court ruling, the next day there will be a new law, a new regulation, to push them further into the red. There are companies here that have to struggle with annual losses of 70 million, 80 million, 100 million.”

EU Parliamentarians See a Targeted Strategy

The parliamentarians speak of a deliberate strategy. It began with bringing the media under state control, then moved on to the banks. Now, it encompasses the construction industry, retail, agricultural businesses, and telecommunications firms. So far, the major corporations remain untouched. Even workers’ rights were curtailed to entice German automakers such as Audi, Mercedes, or BMW to invest. However, Hohlmeier believes that soon “no company will be safe from suffering damages themselves in the future. They will tackle one sector after another Hungary’s government strategy is called.

€40 billion withheld due to corruption

Hungary is now considered the most corrupt country in the EU, which is why the European Commission is withholding funds. The amount at stake is up to €40 billion. For experts, this is the only measure the government understands. “It’s only a matter of time before the Orban government can survive,” says Miklos Ligeti from Transparency International Hungary. He hopes that the EU will continue to withhold the funds.

Transparency International is now collaborating with the new anti-corruption authority, which was established under pressure from the EU. However, Ligeti is skeptical. He suspects that Prime Minister Orban may be playing for time and speculating on a change in political circumstances after the 2024 European elections. “That’s what I fear,” says Miklos Ligeti, adding, “My hope is that the people in Hungary will ultimately win.”

EU parliamentarians demand more pressure from Brussels

The visitors from Brussels are determined to ensure that Orban and his oligarchic friends do not emerge victorious in the end. Already, free competition, unhindered access to the single market, judiciary, and press freedom have been restricted. The demand from budget politicians is for the European Commission to continue blocking all funds and also withhold the funds that Hungary is still entitled to from the current budgetary period. According to Monika Hohlmeier, the Commission must ensure that the funds from the Recovery and Resilience Facility are not released and that other funds are also blocked. They must also investigate whether contracts have been awarded that do not comply with European rules and initiate infringement procedures against Hungary.

Daniel Freund, her colleague, calls for even more pressure from the European Commission. The Green Party MEP would even strip Viktor Orban and Hungary of their voting rights. Freund finds it absurd to think that Orban will be given the spotlight next year. In July 2024, Orban is scheduled to assume the presidency of the EU. Freud cannot imagine it, saying, “I think a country that is no longer a democracy cannot lead the European Union.”