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Research project by Farm in the Cave International Theatre Studio

Special relationship of private companies and Hungarian state

It is the declared aim of the present Hungarian government to extend the sector of small and medium-sized national enterprises; while, in parallel with its aspiration, it has developed its rhetoric so as to increase the anti-foreign attitude in both the economic and political fields, as well as the civilian sphere.

Recently the sub-secretary of the Hungarian Ministry of National Development explained that entrepreneurial grants offered by the European Union often fail to succeed, because the money might be lost subsequently. National companies initiating a public procurement procedure should publicize their announcements via local mediums, so that “multinational companies cannot hunt them down,” she said.

A third parallel comes into play as Fidesz-related large enterprises enjoy great financial benefits from the government’s economic regulations and legislature, harshly contradicting the declared aims of aiding smaller businesses, as well as generating outraged uproars from the part of the opposition parties and different sectors of the economy.

There are two salient examples of the governmental prioritization of large companies over multinational investments (and smaller Hungarian businesses): Közgép, a private corporation owned by Lajos Simicska, a vaguely known entrepreneur recently attracting media attention by his company’s consistent involvement in Fidesz-related activities, and CBA, a supermarket chain, where members of the directors’ board are known to have won a few of the recent tobacco concessions conducted by the Fidesz-KDNP government.

Közgép is a corporation, the owner of which was long unknown to the public because of the company’s policy and its private status. 2012 was the first time when Lajos Simicska’s ownership was publicly announced. His relation to Fidesz is manifold: between 1993 and 1998 he was the chief financial officer of the party and a year later, he was appointed by Viktor Orbán to become the head of APEH (the National Tax and Customs Administration of Hungary). After the inauguration of the Fidesz government in 2010, Közgép applied to and, in 2011 and 2012, won tremendous amounts of money through governmental tenders.

Another worrying issue about the Fidesz-Közgép relationship is in connection with the parliamentary interpellations handed in by opposition party members that contain question mostly surrounding the governmental interests behind Közgép’s tender-winning tendencies in recent years.  Whenever such an interpellation is handed in, governmental members defend Közgép by demonizing foreign enterprising and saying it is in Hungary’s best interest to have Hungarian companies winning these tenders. According to the government’s position, Közgép is always better than any foreign business; therefore, instead of raising redundant concerns, the opposition should be grateful that Hungary’s economic interests are protected.

A seemingly rather counterproductive action from the governmental part was the procedure by which it selected the winners of the tobacco concessions: many of the small and medium-sized enterprises the government alleges to protect disappeared after the regulations were set in operation. CBA, the currently flourishing national food retailer franchise, became undeniably related to the tobacco tenders; many members of the director board, won more than one of the tobacco stores. Its loyalty to the current government is not merely a myth generated by the opposition. Recently, a letter written to CBA workers was leaked into the hands of the media; it contained a call for action by the owners (Vilmos Lázár and László Baldauf), asking workers to express their sympathies towards the current government in the light of the memorial ceremonies of 1956. This letter also included an invective against multinational companies as well as post-communism and liberalism. Most importantly, the owners asked workers to join the so-called Békemenet, a Fidesz-related movement, on the day in question, thereby expressing their commitment to development and welfare of the country.

In 2012, an outrage followed the law constructed by the Fidesz-government in 2011 that prohibited the building of retail outlets larger than 300 square meters in the upcoming three years, exception could only be made if the given retailer is absolved by a council to where members are delegated by Ministry of Rural Development. A large proportion of the exceptions was taken up by groups and investments related to CBA stores and the companies of CBA owner László Baldauf.

Another interesting example of the ‘successful cooperation’ of private companies and the state is the newest joint action of the Hungarian police and CBA: costumers can have a cup of coffee and have conversations about e.g. crime prevention with police officers in the dedicated retail shops, which are, of course, going to be only CBA shops nationwide. 

Csaba Tóth / Republikon Institute

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