Hungary dissolved sixteen foundations from Orbán's era. According to the government, assets worth 3.5 billion euros returned to the state, universities have until 2027

On August 31, Hungary completed the liquidation of sixteen public benefit property foundations that do not operate higher education institutions. According to the government, public assets with a book value of at least 1,284 billion forints, approximately 3.5 billion euros, are thereby returning under direct state control. The Prime Minister's Office stated that this ends an opaque system and that an important obstacle to releasing EU funds has been removed. Index.hu ↗ HVG ↗The construction, abbreviated in Hungarian as kekva, was created during Orbán's previous governments. Through it, the state removed considerable assets and decision-making about them from direct state control and entrusted them to the boards of trustees of foundations. According to the State Audit Office, public assets worth more than 3,000 billion forints, over eight billion euros, entered them by 2024. The government adds that the previous cabinet was forgoing tens of billions of forints in dividends each year by transferring its shares in profitable companies such as MOL and Richter to the foundations. Positions on the boards of trustees often meant lifetime appointments, so the same bodies were to decide about assets even after a change of government. Office of the Government of Hungary ↗

Leading figures of the former government sat on the boards of the dissolved foundations. The largest assets, nearly 575 billion forints, were managed by the Mathias Corvinus Collegium foundation, whose board of trustees was chaired by Balázs Orbán. János Lázár chaired the Jövő Nemzedék Földje foundation with assets close to 108 billion, former president János Áder chaired the climate foundation Kék Bolygó and Szilárd Demeter chaired the Magyar Kultúráért foundation. Together with the MOL – Új Európa foundation, which managed over 262 billion, roughly three-quarters of all the assets managed fell to the three largest of them. The government itemized the assets into four major categories: over 845 billion forints are shares in companies, approximately 162 billion cash, 89 billion securities and nearly 88 billion real estate. Index.hu ↗

The dissolution of foundations also changes the management of some institutions. The public duties of the foundation established in 1999, which housed the Budapest House of Terror museum opened in 2002, were taken over by Kulturális Vagyonkezelő Kft., a subsidiary of Városliget Ingatlanfejlesztő Zrt., which stands behind the Liget Budapest project and the reconstruction of the opera. Historian Mária Schmidtová, who directed the museum, bid it farewell with a post on social media. Telex ↗

The consequences also affected the MCC's Brussels office. Frank Füredi, who resigned from the helm of the Mathias Corvinus Collegium's Brussels office on Monday, announced that the office is closing. He told Euronews that in its current form, it is finished according to him. He claims that the Hungarian government should respect the institution's existing contracts and that employees should receive wages and severance pay to which they are entitled under the contracts. According to him, the government sent a liquidator to the MCC's Budapest headquarters. Euronews ↗ Index.hu ↗

Not everyone complied with the dissolution. János Áder turned to the court over the dissolution of his climate foundation and the dispute with the Prime Minister's Office continues. The intervention thus does not only affect the financing model, but also the institutions and people associated with the ideological background of the previous government. Telex ↗

However, a more substantial part of the system lies ahead of us. The sixteen dissolved foundations are those that do not operate higher education institutions. University foundations will be dissolved only on August 1, 2027 and the Hungarian state will be the legal successor in each case. Rules on conflicts of interest, transparency and property declarations, which the European Commission had warned the Hungarian government about for years, apply immediately upon the adoption of the law. Leadership in university foundations already saw 98 percent of members replaced: over 1,200 people applied for positions on management and supervisory boards, 660 applications were formally and substantively valid, and 168 positions were filled. Index.hu ↗ Portfolio ↗

The universities were precisely the core of the dispute with Brussels. The government justifies through them its claim about unblocking funds, but the European Commission is more cautious. Transport and Investment Minister Dávid Vitézy stated on Monday that Hungary met all legislative conditions for obtaining funds from the Recovery and Resilience Fund. The Commission responded on Tuesday that the Hungarian government's statements about fund approval are premature because Budapest has not yet submitted an official payment request. It has until September 30 and assessment will officially begin only after its submission. TASR ↗

One narrow section remains verified. The figures on dissolved foundations and returned assets come from a statement by the Hungarian government, not from an independent audit, and book value is not the same as market price. Slovak and Czech media adopted the diplomatic layer of the dispute, that is, Vitézy's statement and the Commission's response, but have not yet written about the actual dissolution of the foundations and what exactly the condition applies to.

Photo: House of Terror museum on Budapest's Andrássy Avenue. Author: Fred Romero / Wikimedia Commons / CC BY 2.0. The image has been reduced in size.