Hungarian government opens route to setting up own foundations

By bne IntelliNews October 17, 2016

According to a recent law amendment, the Hungarian government now has the right to set up charitable foundations, local press reported on on October 17.

Critics fear that the law amendment will increase the risk of corruption by opening the way for officials to divert funds. A series of scandals has surrounded six such bodies established by the central bank, while the government has been scrambling to close to public scrutiny their use of public funds.

The amendment, passed on October 11 but yet to be countersigned by the president, restores the government’s rights to set up foundations after it was rescinded a decade ago. The legislation does not specify the objectives or the maximum budget of the potential organisations. It also remains unclear who can be appointed to the boards of any such foundation.

The bill was passed in spite of the fact that the biggest scandal to dog the ruling Fidesz party in recent years has revolved around the use of public funds by the six charitable foundations established by the Magyar Nemzeti Bank. The scandal broke after a Constitutional Court ruling blocked the government's attempt earlier this year to remove spending by the foundations from public scrutiny.

A series of other measures has recently been introduced that appear intended to limit financial transparency in Hungary, especially concerning public money. Most recently, the government passed a bill that classifies details of donations and related tax rebates as secrets.

In 2006, the government led by the Hungarian Socialist Party abolished 'public foundations,' arguing that in many cases, they had “become one of the main channels of siphoning off public assets,” local Magyar Nemzet reports.

Related Articles

Croatian central bank approves sale of Splitska Banka to Hungarian OTP’s Croatia unit

The Croatian central bank (HNB) council has approved the sale of a 100% stake in Croatia's Splitska Banka to Hungarian lender OTP Banka’s Zadar-based Croatian unit OTP banka d.d., ... more

Controversial NGO bill enters Hungarian parliament

Hungarian MPs began to debate the controversial bill on the transparency of foreign-funded NGOs in parliament on April 19.  The Fidesz-supported bill recommends that NGOs that receive at ... more

Brussels reportedly demands Hungary revoke contracts handed to IT system for EU funds

The EU has found irregularities regarding a series of contracts signed by the Hungarian state for IT systems responsible for the tendering and distribution of EU funds for the 2007-13 budgetary ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss