Orbán’s New Law: A Threat to Civil Society and the Single Market

Orbán’s new law is worse than an attack on civil society: it threatens the integrity of the single market.

A few months ago was reported that Orban was working with the Heritage Foundation on plans to destroy the EU.

It was tempting to dismiss it as grandstanding: how could a country of 10 million people manage to destroy a union of 440 million?

His latest so-called “transparency law” is just such a doomsday device. It is presented as a version of the US foreign agents registration law (which it’s not). It has been denounced by civil society and independent media in Hungary as an attack on their freedom (which it is).

But it is also something altogether more dangerous: a legalistic assault on the four fundamental freedoms of European unification, and on democracy in Europe itself. Because  it includes the EU in its definition of “foreign” (Article 2.2) it is a direct attack on the EU’s ability to spend money within its own borders for purposes approved by European governments in the Council and the European people, through their elected representatives in Parliament.

This is a significant escalation in Orban’s self-declared plan to “occupy Brussels”  While he may hope the Commission will avoid confrontation in exchange for him not vetoing sanctions on Russia, that threat is empty because other means  of sanctioning Russia’s war machine are available (including sanctions by the other 25 member states, apart from Slovakia, or the use of extremely high tariffs in lieu of sanctions). 

What does this bill, as yet unpassed by the Hungarian parliament, do? 

It gives Hungary’s “Sovereignty Protection Office” the right to blacklist Hungarian persons or entities it deems received foreign support to “influence public life.” These entities then have restrictions imposed on them, including being forbidden from receiving money from anyone non-Hungarian, or who is a dual Hungarian national, or any entity registered or headquartered outside Hungary.  Entities that receive money, or facilitate its receipt are themselves subject to investigations and restrictions. The Anti Money Laundering Authority is required to open investigations into them and banks are supposed to monitor transactions. These entities can be civil society organisations and media groups, but the category also includes any private company and the EU itself.

The Hungarian government is planning to  give itself the right to interdict any transaction with a fellow-eu member state and harass any organisation, including recipients of foreign investment from the rest of  the EU, that engages in such transactions.

This is specifically the power that Jean Monnet knew was so dangerous to European peace and which he sought to begin limiting, in respect of the most strategic of materials, coal and steel, in 1950.

The aim of the single market is to bring Europeans together by eliminating barriers to exchange, so that Hungarians, for example, may travel, live, and pursue opportunities without restriction not only within their borders, but across the whole continent. No anti-Hungarian government in one of its neighbours could deny them those rights. Brussels would intervene to prevent it. Likewise, no Hungarian government is allowed restrict otherwise lawful activity that other Europeans decide, together with Hungarians, to do.

If the Hungarian-state funded Matthias Corvinus Collegium wants to establish branches in other European countries it is free to do so. The government of, for instance, Belgium should not be allowed to pass a law to prevent it receiving money from outside Belgium.

It was wider implications in the economic sphere. If a Hungarian company were to use equipment from, for example, France, the single single market’s rules that require it to be treated fairly, and broadly as a French company would.  But what if there were a French government body that could say: sorry, you’re not French, go to the back of the queue?

This bill would give the Hungarian government arbitrary power to split Hungary off from the single market. If it were copied by Robert Fico in Slovakia, and later by other countries, it would begin break up altogether, damaging the most important pillar of European integration..

This so-called “transparency”Bill  is a direct attack on the fundamental treaties of which the commission is required to bethe guardian. If passed, its effect will  be immediate: it will not be enough to begin normal infringement proceedings, which might take years. The damage to the single market will be felt immediately. The commission needs to be extremely clear. It must go beyond threatening  “necessary action” and be ready to ask the CJEU to impose interim measures  to prevent the law coming into effect at all.