Forcing the Central European University out of Hungary was against EU law, court says

The higher education law that forced the Central European University (CEU) to move from Budapest to Vienna is against EU law, the EU’s top court says.

“The conditions introduced by Hungary to enable foreign higher education institutions to carry out their activities in its territory are incompatible with EU law,” the European Court of Justice said in a ruling published on Tuesday.

This finding is a “vindication of CEU’s battle to defend academic freedom and the rule of law,” the university said in a statement.

The law passed by the Hungarian government in 2017 required foreign universities offering international diplomas in Hungary to have a campus in their home country.

CEU set up a campus in the state of New York, but the Hungarian government did not sign an agreement allowing the university to continue its operations in Budapest. CEU subsequently lost its right to issue US-accredited diplomas in Hungary, and was forced to set up a new campus in Vienna.

The European Commission referred the case to the European Court of Justice in December 2017 and it has taken nearly three years to consider it.

CEU rector Michael Ignatieff said the court’s decision strengthens legal protections for academic institutions across Europe. “It’s a legal and moral victory for the EU,” said Ignatieff. “This has created a precedent that will benefit every university in Europe.”

The ruling is in line with the commission’s initial assessment that the Hungarian law breached the rules of the World Trade Organisation, EU law and the Charter of Fundamental Rights of the European Union, relating to academic freedom, the freedom to found higher education institutions and the freedom to conduct a business. 

The change to Hungary’s higher education law was largely seen as a direct attempt by the government led by Viktor Orbán to oust the liberal university founded by Hungarian-born philanthropist George Soros from the country.   

CEU could resume offering US-accredited degrees in Budapest, but Ignatieff said the university will keep most of its operations in neighbouring Austria. “CEU considers Vienna its permanent home,” said Ignatieff. Austria is “a country that understands rule of law and what academic freedom is.”

In September, the university welcomed the first cohort of students to a temporary campus located in the Favoriten quarter of Vienna. By 2025, the university is planning to move its entire campus and student accommodation to the premises of the former Otto Wagner Hospital.

Recently, Soros announced a $750 million donation to help CEU relocate to Vienna and pledged $1 billion for an international network of universities to be set up around CEU which would help prepare students for current and future global challenges.

Ignatieff said CEU has incurred moving costs of €200 million so far. The university could sue the Hungarian government to recover that money, but the rector said he hasn’t considered that option yet. “That’s for another day,” he said.

While its move to Vienna is set in stone, the university is now working on a plan to reinforce CEU’s foothold in Budapest, by potentially adding new US degree programmes and expanding planned projects around a research centre for the study of democracy, the Open Society Archives and the CEU library.

Soros, who is also founder and chair of the Open Society Foundations, said CEU will not return to Budapest, saying “[Hungary’s] prevailing laws don’t meet the requirements of academic freedom.”

Hungarian justice minister Judit Varga said Hungary will apply the court’s ruling “in accordance with the interests of the Hungarian people”, signaling that the government is sticking to its original argument that CEU had unfair advantages over other Hungarian universities.

A boost for academic freedom

CEU provost Liviu Matei said CEU could not win the fight with the Hungarian government and was forced to leave. But the ruling gives hope to other academics whose activity is restrained or repressed by illiberal regimes.

“Turkish academics, some of whom are still in prison, could not win against the Turkish government, but if there is a European reference, if there are European standards, if there is European legislation and enforcement mechanism for academic freedom, that helps universities preserve academic freedom and to exercise their function in the society,” said Matei.

The ruling could also help other Hungarian institutions whose independence has been limited by government interventions. Not long after it passed the law that drove out CEU, the Hungarian parliament voted to force the Hungarian Academy of Sciences to transfer its research institutes into the oversight of the Eötvös Loránd Research Network, a new agency run directly by the government.

Earlier this year, the government appointed new leadership at the University of Theatre and Film Arts, a move which prompted students to occupy university buildings and protest the appointment of a chancellor and vice rectors who are close allies of the prime minister, a self-proclaimed Christian-nationalist.

“We hope that the Hungarian government will take the opportunity to reverse course and restore the institutional autonomy and academic freedom of the research institutes of the Academy of Sciences and other universities in Hungary, such as the University of Theatre and Film Arts,” CEU said in a statement.

The court ruling came out during heated negotiations in Brussels over plans by the European Commission and parliament to ensure that EU funds cannot be used in countries that disregard basic principles of the rule of law, including academic freedom.