Fidesz delays vote on controversial law targeting NGOs and the media

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Vote on Hungary’s ‘foreign agent’ law postponed until fall

Hungary’s ruling party, Fidesz, postponed a parliamentary vote on the controversial legislation that targets organizations receiving foreign funding, 444 reports. The bill, often likened to Russia’s “foreign agent” law, would give the government powers to monitor and potentially ban groups deemed to threaten Hungary’s "sovereignty". Though Fidesz holds a two-thirds majority in parliament and the vote was expected to pass in mid-June, party leader Máté Kocsis announced it would be delayed until the fall..

The proposed bill has drawn widespread criticism from civil society, opposition politicians, and the international media. Amnesty International celebrated the recent developments as a “huge joint success” but warned that the "fight isn’t over". NGOs such as Transparency International and the Hungarian Helsinki Committee have condemned the bill as a threat to democracy and free expression. The proposed legislation sparked mass protests in Hungary, and public figures who don't typically speak out on politics made vocal statements criticizing the bill.

Milorad Dodik and Viktor Orban hold talks in Budapest 

Milorad Dodik, President of the Republika Srpska, held talks in Budapest with Viktor Orban. The separatist Serb politician also posted a joint photo on X with the Hungarian leader. In the post, Dodik wrote that they want to deepen strategic cooperation between the two countries, especially in energy and agricultural projects.

According to 444, the real topic of the meeting could be the mineral resources of Republika Srpska. The Vojvodina-based newspaper Szabad Magyar Szó earlier reported that Dodik offered a partnership to the United States, Russia, China, Hungary, and Serbia to exploit lithium and boron. What is unclear at this point is what Hungary has to gain from deepening ties with the separatist Bosnian Serb leader in the Balkans. 

US sanctions freeze Hungary’s nuclear project

The construction of Hungary’s Paks II nuclear power plant slowed down due to U.S. sanctions imposed on Russia, Hungarian investigative outlet Direkt 36 reports. Gazprombank plays a key role in the project’s financing, offering guarantees that protect Hungary if the Russian contractor, Rosatom, fails to meet its obligations. Since the sanctions were announced, Hungary has suspended all related payments, leaving subcontractors without payments. Despite government pressure, the state-owned company overseeing the project, Paks II Ltd., has refused to proceed without a replacement bank, which Rosatom has not provided.

The sanctions have also affected other aspects of the project. Rosatom has started anonymizing public tenders to shield its partners from reputational and financial harm. Several tenders now don't list company names, listing bidders only by number. Meanwhile, additional sanctions on Rosatom executives and figures close to Hungary’s leadership have further complicated cooperation. Despite these setbacks, Rosatom has continued limited work, such as manufacturing reactor components in Russia, though the overall pace of construction has slowed significantly.

Hungarian officials have responded with high-level diplomacy, including a direct phone call between Viktor Orbán and Vladimir Putin, and repeated attempts to negotiate sanctions relief with the U.S. 

European Commission criticizes Hungary's economic policies

Investment has plummeted, GDP growth is slow, food inflation remains high, the regulatory environment is unpredictable, corruption is rampant, education is not producing enough skilled labour, Russian energy dependence is high, and cost accounting is opaque -- These are the main criticisms of the European Commission regarding Hungary, Portfolio reports. Although the report praises good infrastructure and low corporate taxes, structural reforms and more stable economic policies are needed.

According to the annual report, the three main reasons for Hungary's slow GDP growth are deteriorating business confidence, falling investment, and weak external demand. The commission also expects some growth this year. Inflation is also expected to be high by European standards.

Investment has fallen by 7.7 percent in 2023 and 11.1 percent last year, the biggest decline in the EU. Meanwhile, we have seen the highest increase in construction prices in the EU. One of the Commission's most serious criticisms is that Hungarian labour productivity is among the lowest in the EU and has not increased in 15 years.  The state of Hungarian education is also impacting the economy. According to the report, the lack of skilled labour is already holding back growth. 

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