Hungary's government denies bowing to far-right opposition as it scraps residency bond scheme

By bne IntelliNews October 27, 2016

Hungary will scrap its residency bond programme, the powerful head of the prime minister’s office announced on October 27, insisting at the same time the move is not connected with an ultimatum from the far-right opposition.

The Jobbik party announced earlier this month that it will only offer the ruling Fidesz the support it needs to push through proposed constitutional amendments against the EU's migrant quota system if the controversial programme is scrapped. The government, which has been steadily moving to the right to reclaim voters from what has become the country's biggest opposition party, insists that the decision to scrap the residency bonds is not related to what it calls Jobbik’s “blackmail”.

Rather, Janos Lazar claimed, in the wake of the upgrade of Hungary’s sovereign rating by a second major agency last month, the government can "return to conventional tools to finance public debt," and therefore the residency bond scheme is no longer needed. The official says Budapest had already started reviewing the programme six months ago.

Fidesz badly needs Jobbik’s support to push through Prime Minister Viktor Orban’s constitutional amendment, which he says reflects the results of the referendum held on October 2, at which 3.3mn Hungarians - 98% of participants – voted "no" to the quota system. Unlike during its last term, Fidesz is two seats short of a constitutional majority in parliament.

Other opposition parties to the left of Fidesz have said that they will not support the amendments, although more than one disappointed by supporting the referendum, which failed to attract the 50% turnout to make it valid. The sole conditon demanded by Jobbik, which had also earlier proposed a referendum only to have that suggestion ridiculed by Fidesz, is the cancellation of the residency bond scheme.

Under the programme, Hungary is selling residence permits – and therefore free travel across the Schengen zone - to non-EU nationals in exchange for €300,000 investment into a special five-year sovereign bond. Since the launch of the program in 2013, Hungary has granted close to 10,000 residence permits.

Related Articles

V4 leaders positive after dinner with European Commission president

The head of the European Commission Jean-Claude Juncker held talks with leaders of the Visegrad Group at a nearly three-hour dinner on October 19.  The dinner on the eve of the EU summit was ... more

Wizz Air applies for UK license as it prepares for Brexit turbulence

Hungary-based no-frills airline Wizz Air has set up subsidiary in the United Kingdom and is considering acquiring an air operators certificate (AOC) in preparation for possible negative impacts ... more

Hungarian retail investors continue to pile into domestic government bonds

The stock of government bonds held by households rose by HUF154bn (€500mn) September to an all-time high of HUF6.5 trillion, Hungary’s Government Debt Management Agency (AKK) said on October 16. ... more