EU Council action over Hungary’s rule of law breaches sees 21 universities cut off from Erasmus and Horizon funds

More than 30 higher education and cultural institutions in Hungary, including 21 universities, have been cut off from Horizon Europe and Erasmus funding over ongoing concerns about rule of law breaches in the country.

The suspension, under the EU’s conditionality regulation, was confirmed to Science|Business by the European Commission on Monday.

It affects institutions operated as ‘public trust foundations’ or maintained by such foundations. Since 2021, the Hungarian government has brought 34 institutions under the control of these funds, whose governing bodies contain members closely linked to the country’s prime minister, Viktor Orbán, and his political party Fidesz, according to the human rights organisation the Hungarian Helsinki Committee. 

One example is the University of Miskolc in north east Hungary, which is under a trust whose chairwoman is Judit Varga, the country’s minister of justice. Around 80% of universities in Hungary are now linked to a public trust fund.

The creation of these public trust foundations is part of a series of steps taken by Orbán over the last decade to control knowledge and information in the country. These have included the creation of an umbrella foundation in charge of over 500 media outlets and the transfer of many of the country’s major research institutes to a state linked network.

Before that, in 2018, the Central European University was driven out of Hungary on the back of a law targeting foreign-owned campuses.

The EU and Hungary have for the best part of a year been in a dispute over unlocking money from three operational programmes under the cohesion policy and, separately, from the Recovery and Resilience Facility that was set up to help countries recover from the COVID-19 pandemic. 

In mid-December, the Council of the EU finally came to a decision to freeze 55% of the cohesion funds, amounting to €6.3 billion, a reduction from an initially proposed €7.5 billion. 

At the same time, the Council prohibited Hungary’s public trust foundations from accessing Erasmus+ or Horizon Europe funds, in line with a proposal from the European Commission.

This was confirmed to Hungarian national agencies implementing Erasmus+ funding in a letter on December 22, a Commission spokesman told Science|Business. 

In a statement sent to Science|Business, the Hungarian government said the Commission’s decision “discriminates against public interest trusts and the universities they manage”. The government says it has fulfilled its all commitments and does not accept the decision to exclude universities from direct EU tenders.

Remedial measures

The conditionality regulation, introduced in 2021, holds that the rule of law is one of the founding values of the EU and is key to the sound financial management of the EU budget - and the effective use of its funding.

The Council moved to cut off access to Horizon Europe and Erasmus money in light of Hungary’s failure to adequately address rule of law breaches, including concerns about public procurement and corruption, through remedial measures demanded by the Commission. 

The Commission spokesman said existing Erasmus or Horizon Europe agreements will not be affected, but any potential future ones are suspended from 15 December, 2022 onwards. 

He said the measures are not intended to “impede academic mobility, research and innovation in Hungary” but are aimed at ensuring “the transparent use of EU support by public interest asset management foundations,” 

It is possible for the Commission of its own volition, or at the request of Hungary, and at the latest by next December, to propose lifting or adapting these measures, depending on Hungary’s progess in addressing the rule of law concerns. 

The ultimate decision on lifting or adapting the measures will be decided by the Council.

On a separate but related note, the Council also in December approved Hungary’s recovery fund spending plan, but withheld the €5.8 billion in grants until the government implements 27 so-called “super milestones”, which are reforms to address rule of law and judicial independence issues. 

Protecting students

In terms of the impact, the Hungarian newspaper Népszava reported that some 22,622 Hungarian nationals participated in Erasmus+ programmes in 2020, which the EU backed with over €40 million. 

The University of Corvinus in Budapest, which is affected by the suspension of funds, was one of the main institutions sending students on Erasmus exchanges. It said it is in contact with the relevant professional bodies to find out what the Council’s decision means, but that it could not comment further and will “inform the university community” as soon as it has further details.

Hungary has so far received just over €60 million from Horizon Europe to fund 199 projects. Of this, Corvinus University received €2.55 million in two grants. Under Horizon 2020, the country received a total of €370 million.

Márta Pardavi, co-president of the Hungarian Helsinki Committee, told Science|Business the Hungarian government had failed to protect students from the consequences of the EU’s measures, which she said the government knew full well were coming.

If the government does not commit to addressing the remaining remedial measures set out by the Commission to stem rule of law breaches, it would create a “huge headache” for the government.

“Depriving Hungarian students of the opportunity to participate in Erasmus because of its stubbornness […] this would be an outrage,” Pardavi said. “It is up to the Hungarian government to undo the harm. The European institutions should not be blamed.”

Kurt Deketelaere, secretary general of European research universities network LERU, said the loss of Horizon Europe and Erasmus funding is a “sad consequence” of putting Hungarian universities into trusts, and that he is glad Eötvös Loránd University, which has a partnership with LERU, is one of the few universities that refused to be transferred into a public trust foundation. 

“Of course, [Eötvös Loránd] received less national funding than other universities, but maintained [its] academic freedom and institutional autonomy, respecting the freedom of speech and other freedoms,” Deketelaere told Science|Business. 

He added that the Council’s decision reflects the desire of the EU to protect academic freedom and institutional autonomy.

Koloman Brenner, a member of Hungarian opposition party Jobbik, called for the government to immediately begin negotiations with the institutions to have them released from the control of public trust foundations. He also wrote in a public statement that the EU’s move amounts to a “serious handicap for university students and professors and hinders research cooperation.” 

Katalin Cseh, a Hungarian MEP, echoed these sentiments. Hungarian students should not be excluded from Erasmus “because of Orbán’s corruption,” she said. 

“Despite the fact that I find the ‘Fidesization’ of universities scandalous and unacceptable […] excluding Hungarian university students from Erasmus and depriving them of the opportunity to get to know Europe is the worst possible response,” she wrote in a statement. 

A Commission spokesman told Science|Business that it will continue to be in close contact with Hungarian authorities to closely monitor the implementation of measures to address rule of law breaches and will, “take further action as appropriate.”

List of affected universities:

• Budapest Business School

• University of Dunaújváros

• University of Debrecen

• Corvinus University of Budapest

• Hungarian University of Agricultural and Life Sciences

• Hungarian University of Dance

• University of Veterinary Medicine Budapest

• Moholy-Nagy University of Arts

• Semmelweis University

• János Neumann University

• University of Nyíregyháza

• University of Pannonia

• Óbuda University

• University of Sopron

• István Széchenyi University

• University of Szeged

• University of Theater and Film Arts

• Hungarian University of Physical Education

• Tokaj-Hegyalja University

• University of Miskolc

• University of Pécs

Editor’s note: This article was updated on 11 January 2023 to include the statement from the Hungarian government, which was received after publication of the original article.