Orbán sets aside €12.5M for Hungarian universities hit by EU’s Horizon Europe funding freeze

23 Mar 2023 | News

It provides a stop gap, but some researchers in Hungary have expressed concerns to Science|Business that this substitute fund is papering over cracks rather than solving underlying rule of law issues

Hungarian Prime Minister Viktor Orbán. Photo: rantotthus / Flickr

The Hungarian government’s move to set aside nearly €12.5 million to support research projects impacted by an EU funding freeze is not a viable long-term solution, some academics and researchers in the country have said. 

The five billion HUF “self-reliance” fund announced on 14 March is intended to finance the contribution of Hungarian partners in European consortia backed by Horizon Europe money. 

The EU’s freeze on access to Horizon Europe and Erasmus+ funds affects 34 universities and cultural institutions that are managed by specially created public trust foundations. The structure of these foundations breach several rule of law principles, according to the EU. 

The Council of the EU, based on proposals from the Commission, took the decision to ban these institutions from accessing any new Horizon Europe or Erasmus+ funds from 16 December onwards. Grants that were already signed before that time are unaffected. 

From the wording of the Hungarian government’s 14 March announcement, it appears that some funding proposals involving Hungarian partners were already in the works by December 16, but they had not yet reached the point of signing off on the grant agreement. The deadline for doing this for “several projects” is in May. 

If the EU’s freeze remains in place, Hungarian partners will not be able to sign the grant agreement but will still be able to participate as associated partners using money from the €12.5 million substitute fund. 

A spokesperson for Hungary’s National Research, Development and Innovation Office, which is managing the self reliance fund, told Science|Business the money will cover more projects than are currently affected, and the government is prepared to increase the amount if necessary. However, it “truly believe[s] the restrictions will be lifted in time.” 

The Hungarian government is “deeply concerned that European institutions have made unjustified decisions for political reasons” that could exclude “excellent Hungarian researchers” from European research. “These measures are harmful not only to the Hungarian RDI ecosystem, but also to the entire European Research Area,” the spokesperson said. 

The number of affected projects was not specified, but there have been applications, from almost all the universities involved. 

An internal communiqué about this funding sent by one of the impacted universities that was seen by Science|Business says, HUF5 billion will be able to support 12 applications from nine different universities.”

But researchers in the country are concerned that this fund is merely papering over cracks and is not sustainable. 

Several members of the Hungarian Academy Staff Forum (HASF), an association of researchers, contributed their thoughts on the funding in an email to Science|Business. They wish to remain anonymous. 

One member said, “What happens next year? This substitute funding is kind of a way to extinguish a fire, but it won’t solve the underlying problem in the long-run.”

Dániel Deák, professor of international taxation and EU law at Corvinus University of Budapest, one of the universities under the management of a public trust foundation, also feels that the substitute fund is a step in the wrong direction. 

Instead, the Hungarian government should comply with EU demands on restructuring the public trust foundations rather than attempting this work-around, he said. “We need a corruption-free institutional environment, and then Hungarian participants will be welcomed by the EU partner institutions.

Deák also called for greater public funding for universities and a strengthened public education system, which he says are in decline. 

Another member of HASF was less critical of this substitute funding, saying it is the “logical next step if the government does not want the impacted universities to be harmed.” 

“It is a great relief for the teachers and researchers working [at the universities] that they are not left out of the consortia. My opinion is that we should not condemn this gesture precisely for the sake of our colleagues, as it supports their participation in the tenders they have already won,” the member wrote. 

Another member worried about the future impact it will have on Hungarian participation in European research projects, saying there could be a “chilling effect” and adding, “Who would want to make a partnership with Hungary even if they promise to be an associated partner? Bureaucracy is already complicated enough without this. 

No deadline

The EU’s actions against Hungary’s public trust foundations are part of wider concerns about rule of law breaches in the country and come after the triggering of the EU conditionality regulation against Hungary back in April 2022.

It is just one issue that Brussels and Budapest have been discussing regularly since then. A technical meeting between both sides was held on 16 March where Hungary’s progress on addressing rule of law breaches was discussed, details of which are not publicly disclosed. 

Representatives of Hungary are due to meet EU officials every three months to provide updates, but there is no deadline by which they must have resolved things

Balazs Ujvari, spokesman for the European Commission did not comment on how the talks are progressing but said on 21 March during a press conference that in reference to public interest foundations, “We have talked about June or July, [when] if everything is resolved then any impact could be avoided, but there is no regulatory deadline.”  

In mid-February, the Hungarian government announced that seven cabinet ministers would step down from their positions on boards of trustees of some of the public interest foundations, by way of allaying concerns in Brussels. 

There is little indication whether this goes far enough for the EU, but the European University Association has pointed out that politicians’ involvement in the boards is not the only problem with the structure of the public trust foundations. 

It recently produced a complementary analysis report to reflect the particular impact the public trust foundations are having on Hungary’s academic autonomy, to sit alongside its regular University Autonomy scorecard

The analysis highlights factors such as the indefinite term of board members, that they were initially exclusively appointed by the government and can now only be appointed by current members, and that the boards of trustees have been given “significant decision-making competence”. All these create a unique model in terms of how European universities are run. 

Orbán’s speech

Hungarian Prime Minister Viktor Orbán addressed the public trust foundation dispute with the EU during a speech on 9 March at the opening event of the Chamber of Commerce and Industry. 

He believes Hungary will reach an agreement with the EU but even if it didn’t, the state would fund the Erasmus programme and give Hungarian universities “more research funds” than they would receive from the EU. 

Orbán also accused the EU of trying to take away Hungarian foundation-run universities’ competitive advantage as they are “directly involved in government decision-making through the state secretaries and ministers.”

Taking away this advantage is “something we must not accept,” he said. “It may be that the boards of trustees need to be changed, and perhaps we’ve already changed them. But we must not give up the advantage of being linked in, of direct communication, and of Hungarian universities being an integral part of economic development.”

This interpretation, that the role of the boards is to provide a direct link from universities to government, is in contrast to previous rhetoric in which the Hungarian government has claimed the trustees are completely independent. 

A member of HASF said this “influence” that the government has gained over the universities is why it is working so hard not to restructure the public trust foundations. 

“The problem could be solved easily if the government changed the laws around the public trust foundations, but they don’t want to,” the member said. 

“They managed to gain some influence in the system and that’s why they are trying many things, one of which is this substitute funding, but they don’t want to lose this indirect influence over universities.

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