Hungarian universities banned from Erasmus as the government fails to address corruption concerns

To allow Hungarian universities to participate in the Erasmus+ the Orbán government promises banning ministers from the trusts running higher education. This alone however would not solve the corruption concerns and systemic issues plaguing Hungarian higher education.

In early January, the European Commission suspended the right of several Hungarian universities to receive grants in the Erasmus+ and Horizon Europe mobility programs. The decisions effects universities that were recently transferred to so-called “public trust foundations”. As we wrote in 2021, most Hungary’s universities (including the universities of Debrecen, Pécs, and Nyíregyháza) were given over to semi-private trusts in an unprecedented wave of privatization. These trusts are run by boards of trustees which include many figures associated with Orbán’s regime, including members of the current government.

The government should not have been caught off guard by the European Commission’s announcement in January that it was suspending the participation of “model-switching” universities in the Erasmus+ exchange programme. Although the government had justified the outsourcing of universities to public-sector trusts (KEKVAs) on the grounds that it would allow them to attract new funding, the European Commission had previously indicated that the new model would be an obstacle to accessing EU funds.

Semi-privatized for full political control

In January, government politicians hinted that some form of conflict of interest rule would be introduced for university foundations, banning ministers from sitting on their boards of trustees. But this would not solve the problem, as the EU commissioner pointed out, because there are more serious problems with the system than the presence of government ministers.

Hidden privatization: valuable public assets transferred from the state to public trust foundations led by Orbán-allies | atlatszo.hu

In less than a year, the network of Hungarian culture commissioner Szilárd Demeter has gained a real estate portfolio worth billions of Forints. Mr. Demeter, who received international criticism over his comments about “George Soros’s gas chamber” now controls several monumental castles and lucrative cultural centers.

Hungarian universities have been under the control of the state administration since the fall of communism until 2021. Two years ago, a massive amount of national assets, including almost all higher education, was given over for free to so-called public interest trusts. This left public institutions little control over universities, even though they still operate from public money. The new model has given almost unchecked power to boards of trustees, which means government politicians can directly control much of higher education, not through institutions, but through personal power.

Politicians appointed to university foundations Péter Szíjjártó, Minister of Foreign Affairs, Mihály Varga, Minister of Finance, Judit Varga, Minister of Justice, and even Tibor Navracsics, who, as Minister of Regional Development and EU funds, is negotiating with the EU on the EU funds for universities.

The foundation model has also made the internal functioning of institutions less transparent.  The example of the foundation running the University of Miskolc illustrates the problem. The foundation (UMA) is headed by Justice Minister Judit Varga. Last year, 24.hu launched a successful public interest information request, which revealed that Judit Varga receives a salary of HUF 1.4 million as chair of the board of trustees. However, in response to Átlátszó’s public data request, the foundation did not disclose how much the minister worked for this salary. They wrote that they do not keep any records of how much work the members of the board of trustees do for the benefit of the foundation and the university.

The Minister of Justice earns a fortune as a second job on the Board of Trustees of the University of Miskolc – English

As chairman of the board of trustees of the Universitas Miskolcinensis Foundation (UMA), Minister of Justice Judit Varga receives 1.4 million HUF per month as compensation – but the institution kept no records of how many hours the Minister worked for the money.

Voting with conflict of interest

One year after privatization, the European Commission made it clear that the new model makes it difficult for institutions to apply for EU funds. The main problem, as the European Commission’s rule of law report last July showed, was that it was unclear whether public procurement rules covered public interest trusts. The Hungarian public procurement law did not include the newly created bodies, although the Public Procurement Authority insisted that it covers them “as a general rule”.

After the Comission threatened to freeze Hungary’s EU funding, the parliament amended the public procurement Law to include the new trusts, as part of the laws, trying to appease the Commission. However, the new law failed to address the conflict-of-interest issue, still allowing government leaders to be part of university trust.

As a result, Hungary was barred from accessing 2600 billion forints of EU funds. The European Commission also notified Budapest that the Erasmus+ and Horizon Europe will also be closed for privatize universities until the issue is solved.

In response to the EU’s new move, the Hungarian government has proposed a new amendment. Tibor Navracsics told the media that a bill is being drafted which will forbid government ministers from becoming university trustees. This however will still leave conflicts of interest unaddressed. Currently only five universities have trustees that are also ministers. Besides them, there are plenty of other mayors and members of parliament in the university foundations.

MPs who double as trustees may even have more serious conflicts of interest than ministers. After all, MPs can vote in parliament, for example, on whether the state should give money to the foundations they manage as ‘private individuals’. Anti-corruption group K-Monitor pointed out that Sándor Fazekas a Fidesz MP and a trustee of the Marek József Foundation, which runs the University of Veterinary Medicine. In 2021, he voted on two bills related to the regulation and funding of universities, including the one he is a trustee of.

It is also questionable whether a possible ministerial conflict of interest procedure would actually remove ministers from the boards. The mandate of the board of trustees is indefinite, and in 2020, Fidesz amended the constitution, which now states that trustees of public interest trusts can only be replaced by a two-thirds parliamentary majority. Thus, a new law on foundations would not retroactively revoke the appointment of trustees. That would require either another constitutional amendment or a snap vote to recall problematic actors one by one. Unless they all resign voluntarily.

University foundation gives a huge second salary to MFA Péter Szijjártó, the workload is not accounted for – English

The Hungarian Minister of Foreign Affairs is a member of the Board of Trustees of the Széchenyi István University Foundation in Győr, Hungary, and receives a gross monthly salary of HUF 1.5 million. We asked how much he works for this amount, but the foundation said they do not keep records.

Weakest participation in the CEE region

Besides legal and rule of law concerns, there are other systemic problems with the Erasmus programme and international higher education mobility in Hungary. According to the latest Erasmus+ data for 2021, we are the country in the region with the lowest number of people going abroad under the programme in terms of population.

Marcell Eszterhai, President of the National Conference of Student Self-Governments (HÖOK), told Népszava in January that there are several forces that prevent a good number of students from participating in the exchange programme. Besides poverty and lack of language skills, the most powerful of these is the credit recognition system: Hungarian universities do not recognise on average 69% of credits for courses taken abroad.

The above problems were already highlighted in a study commissioned by the Tempus Public Foundation a few years ago and have apparently not been solved since then. Judit Lannert, the head of the research, told Átlátszó that Hungarian universities send and receive almost the same number of students in the Erasmus programme, but there is a big difference in the number of credits earned.

“Hungarian universities are accepting very few Erasmus credits compared to their partner institutions. As one senior university interviewee put it: ‘The more provincial an institution is, the more brilliant teachers there are who think that no one else in the world can teach them.’ The reason for this is the way education is funded at home: lecturers are paid by the hours they teach, and if a university semester can be replaced by a foreign credit, this means a loss of income for lecturers. As a result, many Hungarian students face the risk of not having their credits for classes taken abroad counted, and thus losing a semester for the purpose of earning a degree.”

Many students cannot afford an Erasmus semester

The research shows that the credit calculation is more flexible in the other direction, with foreign students’ credits earned in Hungary typically counted by their home universities. It is true that many foreign students participating in Erasmus+ mobility programmes in Hungary were disappointed with the quality of education.

It was a common experience that otherwise excellent lecturers teach “frivolous” courses, and do not test them proparly, as if the “laxity” of the Erasmus semesters was a common consensus among lecturers.

In Judit Lannert’s research, many of the Hungarian students interviewed also felt that Erasmus+ was “more about partying” than learning – and just for that, they considered the semester too expensive. The scholarship is usually not enough to live abroad, and in most cases family support is also needed, which also stops many Hungarian students from applying.

Judit Lannert also stated that the creation of university trusts could theoretically be a positive change as state bureaucracy was stifling in the past. However, the new foundations still do not guarantee university autonomy.

“It is unprecedented in Europe to have politicians in government on the boards of trustees of university foundations. Exclusion from Erasmus+ is the first consequence of a foundationisation that is insensitive to conflict of interest issues, and comes at the worst possible time, as the programme is being extended with new functions to coincide with its 30th anniversary. In the longer term, the consequence of the model change could be a higher education Huxit.”

Writen and translated by Zalán Zubor, Hungarian version. Cover image source: European Parliament.