Hungary’s economy has become less dependent on industry, although it still plays an important role. In 1990, the industrial sector accounted for 45 percent of gross domestic product (GDP), in 2018 the proportion was 26 percent. Low taxes have led a number of large companies to establish manufacturing in Hungary.
During the post-war period, Hungary invested heavily in developing the heavy industry according to Soviet designs. The country’s lack of its own raw materials meant that the need for imports was great. In addition, large parts of the industry must be kept up to date with the help of government grants. When these decreased, industrial production fell sharply. In 1995, a number of crisis measures were implemented that helped to improve the conditions for the industry. Privatization policy was of great importance for the sector’s growth, while foreign investors were attracted to the country.
Ahead of 2017, the Hungarian government announced that the tax on big corporate profits would be reduced from 19 percent to 9 percent, which, according to the Financial Times, would give the country Europe’s lowest corporate taxes, even lower than Ireland’s.
Several foreign car companies today have factories in Hungary and foreign investors have established themselves in information technology and in the pharmaceutical industry. This has meant that the industry has quickly become both modern and efficient. According to Swedish authorities, almost 200 Swedish companies have operations in Hungary.
- COUNTRYAAH: List of top trading partners of Hungary. Includes countries that imported most shipments from and exported most goods to the country.
The most important industrial sectors are the production of electronics, optical industry, IT – including mobile telephony – and transport equipment. After decades of investment, not least by German car brands, the car industry accounts for just over one-fifth of the export value. German companies are also among the largest manufacturers in Hungary in other areas of technology. Electronics production is in the same size class as the car factories, both in terms of export value and in terms of the number of employees (which is usually stated at just over 100,000 each).
At the same time, the large element of foreign large companies creates a dependency, not least many Hungarian companies are subcontractors to the German car industry. In May 2020, part of the global corona crisis, BMW announced its decision to push for a billion investment. A assembly plant that will produce 150,000 cars per year and should have been opened in 2023 is delayed for at least one year.
Traditionally important industrial branches such as the pharmaceutical, textile and food industries as well as the chemical industry are also important. In connection with the corona pandemic, which had also spread to Hungary in March 2020, Prime Minister Viktor Orbán stated that the country’s capacity to manufacture facial masks for the healthcare has tripled from 25,000 to 80,000 masks per day. Equally, there was a need to import protective clothing and equipment of various kinds from manufacturers in other countries.
Capital cities want their own channel to the EU
The EU-positive mayors in four European capitals sign a joint declaration, which states that they should seek direct cooperation with the EU, as their countries are governed by EU-critical parties. Behind this “free cities pact” are the rulers of Budapest, Warsaw, Prague and Bratislava. At the intergovernmental level, Hungary, Poland, the Czech Republic and Slovakia have their own cooperation forum called the Visegrád Group, which was formed before becoming EU member states. Several of the governments are now involved in the EU’s tributaries, which consider that the government parties do not respect basic legal and democratic values.
New body will control theaters
Parliament adopts a bill for the establishment of a National Culture Council, as a governing body for the cultural sector; Theater workers and others fear that artistic freedom will diminish and have been demonstrating against the law while the proposal is being dealt with swiftly. A name gathering with about 50,000 signatures has also failed to slow the plan. Municipal theaters must now, in order to receive state aid, sign a government transparency contract and, in addition, have the state appoint the head of the theater.
Law changes make it difficult for government critics
Several disputed legislative amendments are adopted in Parliament after rapid preparation. Backed in a 200-page package on public administration, there are controversial proposals that make it more difficult for parliamentarians to visit public institutions such as ministries. In addition, members who stage protests in the Chamber should be able to be fined several monthly salaries. Another law that Parliament approves makes it harder for party groups to form alliances; it was precisely those collaborations that helped the opposition defeat Prime Minister Orbán’s party Fidesz in several places in the local elections this fall (see October 13). One feature that is perceived as revenge for the election loss is new rules for how municipalities can use their tax revenue. Furthermore, Parliament gives the nine-year mandate for all four Fidesz-supported board members of the Hungarian media authority, which oversees both broadcast licenses and content.
Court accepts border zones
No offense was committed when the Hungarian government forced asylum seekers to stay in a transit zone at the Serbian border in 2015, according to the European Court of Human Rights. The case was raised by two Bangladeshis, who received lower-court support, but since the two were not arrested in the border zone, the Hungarian authorities did nothing wrong, the Strasbourg court finds. Bangladeshis also received their applications processed in 23 days, without undue delay. Hungary, on the other hand, was wrong when the two were then deported to Serbia, as it was not known what they risked being treated there, or during a return transport to Greece. Since 2017, the border zones are the only areas where asylum can be applied for in Hungary. There has been criticism from the UN, among others. In recent years, human rights organizations have argued that asylum seekers are treated poorly in border zones.
HD: The government must apologize
20th of November
The Supreme Court of Hungary orders the country’s government to publish an apology and pay damages to the human rights organization Hungarian Helsinki Committee. HD finds that the government has used incorrect information about the organization, which, among other things, works for the rights of refugees, in a mailing to millions of households. The form that was sent out to fellow citizens was based on the government’s campaign against immigration and against patron George Soros, one of the contributors to the Helsinki Committee.
Hungary’s EU Commissioner approved
Hungary’s candidate for the new EU Commission, Olivér Várhelyi, is finally given the EU Parliament clear sign (see September 30). Várhelyi is given responsibility for enlargement of the Union and the European Parliamentarians have pushed him on a message that makes it clear that he is taking part in the Commission to represent the entire EU. As an EU Commissioner, you are not expected to act as an extended arm for the home country government.
Orbán gives up pending court reform
Viktor Orbán’s Conservative government gives up its long-gone and heavily criticized plans to introduce separate administrative courts, intended to obey directly under the government (see December 12, 2018). The government is now stepping in instead to introduce faster treatment of cases in the courts, the Minister of Justice announces.
EU lawyer: Illegally say no to refugees
Poland, Hungary and the Czech Republic violated EU law when they refused to accept refugees in 2015, when an unusually large number of refugees applied to Europe. The judgment is made by the Advocate General of the European Court of Justice. The three EU countries refused to follow a decision on the distribution of refugees which would reduce the pressure on reception in Greece and Italy (see December 7, 2017). The countries that said no referred to law and order as well as internal security, arguments rejected by the Advocate General. The European Commission took the case to the European Court of Justice, which does not have to follow the Advocate General’s statements, but it usually does. The penalty can be fined.
The cultural center receives police protection
The Aurora Cultural Center, which houses, among other things, pride activists and a Roman press office, is vandalized by some 50 neo-Nazis who scrawl slogans and wear flags. The Fidesz government has previously tried to close the center. It is located in a part of Budapest that was won by the opposition in the last municipal elections and the new mayor arranges police protection for the association premises.
Opposition takes over Budapest
The mayoral election in Budapest becomes a hardship for the Fidesz government. The choice is won by Gergely Karáscony. He is an academic with backgrounds in parties that have emphasized environmental policy and has previously ruled part of the capital with the support of a left-wing party. Fidesz István Tarlós, who is now forced to leave the municipal leadership post, has among other things teased Hollywood stars by claiming in his election campaign that they support him. The municipal elections are collectively described as the first election scare for Prime Minister Viktor Orbán since he came to power in 2010. Opposition parties win through broad alliance building, from left to right, 13 of 23 mayoral posts in Greater Budapest and several other cities, including Pécs, while Fidesz wins in rural municipalities.
Hungarian commuters to the refugee university
The Central European University opens its doors on the outskirts of Vienna in Austria. Operations have been relocated from Hungary after Viktor Orbán’s government tightened control over the university world and conducted a campaign against the university’s founder George Soros (see December 3, 2018). Some of the staff and many of the students now choose to commute from Hungary.
No to the proposed European Commissioner
Hungary’s candidate for one of the posts in the new EU Commission is rejected by the EU Parliament’s Justice Committee. The lawyer and diplomat László Trócsányi is one of two candidates that the parliamentarians say no to because they see a risk of conflicts of interest. With the incoming President of the EU Commission Ursula von der Leyen, he was envisaged as the Commissioner responsible for EU enlargement. The parliamentarians base their uses, among other things, on the fact that Trócsányi, as Minister of Justice in Hungary, gave government contracts to a law firm which he himself founded. Prime Minister Orbán instead proposes diplomat Olivér Várhelyi, who has worked with EU issues in Brussels, but claims that opposition to Trócsányi is because he is critical of immigration.
Orbán on Christian campaign thread
Hungary’s Prime Minister Viktor Orbán hosts a “demographic summit”, which also includes Czech and Serbian leaders. Similar meetings were held in 2015 and 2017. The aim is to gather support against immigration and the campaign for Christians to bring more children into the world. The day before the “summit”, the Hungarian government has organized a conference on how to increase the Christian content in mass media.
Meeting at historical boundary
Prime Minister Viktor Orbán and German Chancellor Angela Merkel meet in Sopron, at Hungary’s border with Austria, 30 years after the “pan-European picnic” which contributed greatly to the fall of the iron curtain and Germany reunited. In 1989, when the border was opened in Hungary, at least 600 East Germans came out to freedom in the West. (East Germans were allowed to travel within the eastern bloc, but not to the west, and the “picnic” became the largest mass flight from the GDR since the Berlin Wall was built in 1961.) Orbán and Merkel set a conciliatory tone, despite the fact that the Hungarian attitude to open borders today is a completely Other: Orbán, which wants to close the borders of migrants, has criticized Merkel for opening German borders to refugees in 2015.
Stop Soros laws to the European Court of Justice
The European Commission requests that the EU Court review the legality of Hungarian rules which make it criminal to assist asylum seekers and at the same time make it more difficult to seek asylum in Hungary. It is about the law package that was adopted in 2018 and has come to be called the Stop Soros laws, as the billionaire and his patron Soros were simultaneously accused of orchestrating an immigration wave to Hungary (see June 20, 2018).
Disputed research team clubbed
The government takes control of the research institutes that sort under the Hungarian Academy of Sciences, MTA. 131 of 199 MEPs voted in favor of the proposal (see June 4). The new law means, among other things, that a board of directors appointed directly by Prime Minister Orbán will make decisions on how research resources are allocated. The goal is to direct the money to activities where the benefit in terms of profitability is evident. About 5,000 employees, including 3,000 researchers, are directly affected by the new scheme. The research fields span everything from space research to music.
Politicians on the run can stay
A Hungarian court rejects Northern Macedonia’s request that former Prime Minister Nikola Gruevski be extradited (see November 20, 2018). The decision can only be appealed by the Hungarian prosecutor, not by the country of corruption-accused politician (who after he fled to Hungary has changed his name).
Lifetime of migrant death in truck
It will be a life imprisonment for four refugee smugglers following a tragedy in which 71 migrants choked in a van 2015 as they were traveling through Europe from the Balkans. The truck was found in Austria, but the criminal charges have been tried in Hungary, as the investigation revealed that the migrants had died before the border crossing. The Szeged Court of Appeal, whose judgments cannot be appealed, tightens the punishment of the main defendants, three of whom are from Bulgaria and one from Afghanistan.
The government takes control of research
Despite massive criticism in advance from research circles, inside and outside Hungary, Minister of Innovation László Palkovics presents a bill that means that the government takes control of the research institutions that sort under the MTA Academy of Sciences. The aim is to increase Hungary’s competitiveness, says the Minister. If the law is passed in Parliament, the responsibility for using research resources is transferred to the government in September.
Orbán’s government backs after EU criticism
The government is postponing – indefinitely – the introduction of a decided new system of administrative courts. The plans have received fierce criticism from the EU, which believes that the system would undermine the independence of the judiciary (see December 12, 2018). A disputed advertising tax is also abolished; the tax has been perceived as directed at media owned by western countries. The government also announces that Fidesz will not join a party group in the European Parliament where Italian Interior Minister Matteo Salvini’s party Lega will be decisive (see March 20, 2019).
Ship tragedy in heavy traffic
A tour boat is hit in Budapest and most of a South Korean tourist group is killed. Ten days later, 24 deaths have been found, while four people are still missing. The incident sheds light on the dense ship traffic on the Danube River, where at the time of the accident there is high tide with strong currents. The Ukrainian captain of the larger ship is arrested on suspicion of carelessness in maritime traffic and causing death to another.
Fidesz largest in the EU elections
The election to the European Parliament will be a success for Fidesz. The alliance between Fidesz and the Christian Democratic People’s Party wins just over 52 percent and gets 13 of the 21 mandates at stake. In second place comes the Democratic Union, which receives just over 16 percent and 4 seats. Three becomes the relatively newly formed Momentum. The party that failed to get into parliament in the 2018 elections now wins just under ten percent of the vote and can take the seat of the European Parliament with two seats. Both Jobbik and the Socialist Party are collapsing compared to the 2014 elections. They win just over 6 percent and 1 mandate each.
Sharp criticism from the Council of Europe
Human Rights Commissioner Dunja Mijatović criticizes Hungary for its treatment of refugees and calls for improvements as soon as possible. The criticism is presented in a report that is based, among other things, on review of the judicial system. She also calls on the Budapest government to curb its frightening propaganda that there is a crisis in the immigration issue.
Facebook acts against Orbántrogna media
The Hungarian government accuses Facebook of censorship since the IT company shut down ads for the government-friendly group Mediaworks, which controls about 90 Hungarian publications. As a major owner of Medieworks parent company Opimus, L finnsrinc Mészáros, who shares a party and hometown with Prime Minister Orbán and is described as an oligarch – a large-scale businessman with political power. Mediaworks closed the large daily newspaper Népszabadság, which used to be critical of Orbán, shortly before Opimus took over the group. Facebook has begun to take action against what is perceived as extremist messages following a scourge of criticism against even terrorism being encouraged by FB users.
Orbán is praised by Trump
Prime Minister Orbán is being welcomed in the White House by US President Trump. Under Trump’s representative Obama, contacts between Budapest and Washington were strained; The United States then criticized the Hungarian government for restricting freedom of expression and other human rights. Now, a group of US senators – both party mates and opponents of Trump – have called on the president to reiterate the US concern that Hungary’s democracy is being eradicated. Trump chooses to pay tribute to Orbán for “keeping Hungary safe”.
Court stops deportation
An attempt to deport three Afghan families to their homeland with the help of the EU border authority Frontex fails. Several countries in Europe, including Sweden, carry out deportations and deportations, but since the Afghans, despite two years in Hungary, have not been able to seek asylum and have their possible asylum reasons tried, the action against families raises particularly harsh criticism from the UN and human rights groups. For one of the families, with a recently heart-operated teenager, the European Court of Human Rights requests that transportation be stopped for the time being. Two of the families end up in Serbia.
Program in seven points against immigration
Prime Minister Orbán presents a seven-point program against immigration as he launches Fidesz’s campaign ahead of the European elections in May. “We have to decide if we want to defend our Christian European culture or give room for multiculturalism,” he says before party mates. At the heart of his message is opposition to discussions being conducted between EU countries on the distribution of immigrants between Member States (see January 10). Hungary’s EU elections will take place on 26 May.
Fidesz is switched off from EPP
The EPP, the cooperation forum of the European Conservative and Christian Democratic parties, decides with the votes 190-3 to suspend the Hungarian government party Fidesz from its cooperation. The reason is Fidesz’s aggressive campaign in which EU politicians are painted black (see February 28 and March 2). The EPP has the largest and most influential party group in the European Parliament and exclusion would be a more powerful measure, but Parliament’s conservative main fears that more extreme right-wing parties should be strengthened if Fidesz should join them instead. The suspension means, among other things, that Fidesz may not participate in internal meetings or vote within the group.
Anger against Fidesz in his own party group
The Hungarian government promises to change a controversial campaign ahead of the European Parliament elections, accusing EU Commission President Jean-Claude Juncker and investor and philanthropist Georg Soros of supporting illegal immigration (see February 28). According to a spokesperson, the campaign ends “as planned” on March 15, but reactions around Europe show that the campaign has caused considerable irritation, not least within the EPP Conservative party group in the European Parliament, which includes both the Hungarian government party Fidesz and Juncker. Several parties within the EPP want to exclude Fidesz, who in that case loses his cooperation with major Christian democratic parties – and instead risks being linked to parties that voters see as extremists.
Good growth in the economy
In 2018, Hungary’s economy grew at its fastest pace in 15 years, by 5 percent according to official data. As before, high domestic demand is lifting the accounts. The construction sector also grew as a result of the government putting in a higher gear to make use of the support it receives from the EU. Lack of labor can, according to analysts, dampen growth.
Court limits controversial law
The Constitutional Court has concluded that the law that makes it criminal to assist refugees and migrants does not violate the Constitution. But the court limits the criminal offenses: intent must be required to help a foreign citizen to stay in Hungary for the offense to be punished. Humanitarian aid to the needy cannot be considered a crime. The law that was tried was adopted with a package of legislative amendments that has come to be called the Stop Soros laws (see June 20, 2018).
The European Commission is responding to the campaign
In a detailed statement, the European Commission reiterates statements made in a campaign launched by the Hungarian government ahead of the European Parliament elections in May (see January 10). The poster and advertising campaign claims, among other things, that the EU wants to increase immigration to Europe. The campaign also portrays the Hungarian-born philanthropist George Soros as an actor behind such an EU plan (see June 20 and September 24, 2018).
Boycott against new overtime team
All members of the Liberal Democratic Coalition are pulling out and announcing that they will boycott Parliament. Other opposition parties join the boycott. The reason is that they are critical of what Hungarians call the “slave law”, a new overtime law passed by the government (see December 12, 2018). The new rules became law when the president signed on December 21.
Protest against Swedish ministerial tweet
Sweden’s ambassador is called to the Hungarian Ministry of Foreign Affairs since Social Security Minister Annika Strandhäll questioned the country’s family policy, including tax cuts aimed at getting Hungarians to have more children. The Minister stated via Twitter that the Hungarian government wants to see more “real” Hungarian children and that the policy “is feeding 30s”. Strandhäll also receives a derogatory comment from Hungary’s Deputy Prime Minister, which causes the Swedish Foreign Ministry to call on Hungary’s ambassador to complain.
Rewards to those who give birth to multiple children
Women who give birth to more than four children must avoid income tax for the rest of their lives, says Prime Minister Orbán. The measure aims to get the youngsters to have more children. Hungarian women give birth to an average of 1.5 children (2016), so the population will decrease, but so far the government has not had a more open attitude to immigration. Advantageous home loans and cheap car loans to multi-family families are also promised. When the law is passed in Parliament on April 1, most of the political opposition also votes yes. A prerequisite for receiving benefits is that none of the parents has a criminal past.
Prison for dust disaster
Two managers in the aluminum company Magyar Aluminum (MAL) are sentenced to prison sentences for being responsible for an environmental disaster in 2010, when a pond with toxic waste water gave way to Kolontal (see October 2010). Six people receive conditional sentence. The judges can be appealed.
Orbán’s EU election platform: resistance to immigration
Prime Minister Orbán announces that he wants to make the European elections in May a vote on immigration. Hungary’s goal is for the EU governing body – the European Parliament, the European Commission and the European Council – to consist as far as possible of politicians who are immigration-critical. Orbán’s view is that the EU’s influence on the migration policy of the member states must be minimized.
Orbán moves into the royal city
Prime Minister Viktor Orbán, who has so far had his office in Parliament, is opening the new year by moving into a custom-built residence. The building in the old quarter on the western side of the Danube River has a background as a monastery, but the castle district was used as a royal city in the Middle Ages and also housed a Hungarian regime that cooperated with Hitler during the Second World War. The opposition sees the move – and the rebuilding that cost the equivalent of more than SEK 700 million – as evidence of growing despotic intentions at Orbán.