Hungarian News

NERconomy and Ways Out

• February 9, 2022
• István
• 2 Comments

NER is the system Orbán has created to subjugate the country, Nemzeti Együttműködés Rendszere (System of National Co-operation.) This co-operation is intended to penetrate the entire state and society for the benefit of the entire nation. The definition of benefit of the entire nation is: What is useful for the leader of the nation is good. Who does not support the leader unconditionally does not co-operate – and is economically excluded, whoever speaks out against the leader of the nation is immediately excluded from the nation. An ideological excommunication in the 21st century, close to the negative impact of the 11th century, but irreversible.

Especially narrow is the co-operation between politicians and the companies of oligarchs. We all have heard about Orbán’s friend from school days Lőrinc Mészáros, who was a gas fitter struggling for making his livelihood in 2010 and is now the richest man of the country, or Orbán’s son-in-law István Tiborcz, who turned after his marriage from an economical nobody to owner of a hotel Empire, since short co-owner of Hungary’s only digital bank, and not to forget for some time owner of Hungary’s most bespoken street lightning company Elios, that put many towns and villages into the dark – and debt.

G7 has examined how the NER works economically ►HU. The chance of winning a public tender is 7 times higher for a company with good connections to the regime than for those who aren’t connected. They have examined not only how many tenders were granted without competition, but also how many fake offers were invoked to make the offer from the NER oligarch look favourable.

For example the chance of winning a tender for city lightning in Hungary is 0.46 (calculation: won tenders / lost tenders.) Elios, although reported from early to be very expensive, had until 2015 a chance of 1.97. After Orbán ordered Tiborcz to sell this went down to 0.18, in the meanwhile Elios was dissolved after bankruptcy. Tiborcz business was pure fraud according to a report of OLAF, the European anti-fraud agency. As son-in-law he was exempt from prosecution and the responsible Hungarian public prosecutor general claimed that no crime was committed.

Lajos Simicska for a very long time was a good personal friend of Orbán since college days, until both had a falling out about a newly introduced tax that harmed Simicska and he called his former friend and PM during an interview to be “geci” (sperm,) an extreme insult in Hungarian. This found entrance into the Hungarian language as G-Day. Until 2010 Simicska’s made a chance of 0.85, from 2011 until G-Day he had a chance of 2.22, thereafter and until 2020 his chances dropped to 0.07! Comparable companies made from 2011 – 2020 a chance of 0.47.

László Szíjj, well-known as owner of the yacht Lady Mrd, where the former mayor of Győr has had his cocaine and sex party, or where the foreign minister Szijjártó took a holiday that would have cost him 4 years of his official income, is perhaps the most visible example that corruption works for both sides. He made with his companies before Orbán took over a chance of 0.49, which is close to the median of 0.47 for the entire market past 2010. After 2010 Szíjj won way more tenders, his chances grew to 1.15.

And of course Mészáros’ companies were examined as well. A beautiful example is Herceghalom Interat Zrt., a company dealing with agriculture machines. Until the school friend of Orbán took over the company they made a chance of 0.55 to win a tender. While he was owner this skyrocketed to 13! And after Mészáros sold the company again this crashed back to 0.47.

After this depressive analysis of corruption in Hungary, the country fighting with Bulgaria for the title of most corrupt country in the EU ►EN, I want to quote an interview Júlia Király gave to 444 ►HU. Király is a highly respected economist, was deputy governor of the Hungarian national bank, joined the competence team of Unity for Hungary, and is a victim of the NER herself. During the primaries of the opposition she was spotted on the stage and the regime has told her employer, Belgium based KBC Group, owner of Hungarian K&H bank and insurance company, that they want her not to fulfil her job any more. Király resigned to protect her former employer from the regime ►HU.

Király said that the 1st step to abolish institutionalised corruption would be a change in public procurement rules. She would invite Mészáros és Mészáros Kft. to participate in future tenders, but she can’t imagine that the company would do so.

To archive this she wants a truly open competition, no longer tenders with only a single participant, challengeable and accountable decisions of the public authorities, low entry thresholds, transparency, and so on. This as immediately introduced rule for all procurements, no matter whether paid by EU funds or Hungarian taxes. The unhealthy, non-competitive companies will disappear. She emphasis that institutionalised corruption wouldn’t end with a pen stroke in April, but that the new rules would have positive effects after about half a year. I agree with her, since procurement contracts are closed for longer periods and as long as they can’t be declared invalid through the courts the negative effect of Orbán’s NER will follow us for some time, but must be phased out.

She has no worries that corrupt companies close to the regime – Király insists on the term NER Empire BTW – could be harmful for the economy in future. As soon as the suppliers of the NER Empire are free to take part in procurement they would do so, instead of looking for the imperial company which they might work for. According to her the NER Empire doesn’t root deep in factual economy and for the suppliers it doesn’t make sense to be the enablers of a 30 % mark-up just to feed an oligarch. The economist said the journalist “You can’t imagine what an economic surplus this will mean.”

Concerning the Hungarian banks with Tiborcz as co-owner of Gránit Bank and some Mészáros connected figures building Hungary’s 2nd largest bank out of state owned Budapest Bank, MKB, and partly owned Takarék Bank, the latter emerged through the by Orbán destroyed Takarék Szövetkezet system of local co-operative banks and FHB, she has a solution as well. Instead of supervision through the MNB (Hungarian National Bank,) she wants to join the European Banking Union immediately. So these banks would be under supervision of the ECB, the European Central Bank. This not as only reason, but to ensure a stable development of the entire Hungarian banking sector, which of course would be needed for introduction of the Euro. She is confident that the Hungary can match the requirements of joining the EU’s Exchange Rate Mechanism II, the “waiting room” for entering the Euro zone within the next electoral cycle – if Unity for Hungary wins of course. It is a requirement to stay there for 2 years with stable exchange rates before joining. Croatia could join on January 1st, 2023, Bulgaria the following year.

And there was another comment of Király I found remarkable. She said that Unity for Hungary always would be asked how to keep the planned deficit of 4.9 % as planned by Orbán for 2022. The opposition is planning to spend, but also to save money as described above. And Unity for Hungary would do everything to keep the EU funds flowing, both the corona recovery funds that are already blocked because of guarantees the EU wants for correct distribution and Orbán doesn’t want to give, and the funding endangered by the decision of the European Court of Justice we will hear next week. She wants to know, why nobody asks minister of finance Mihály Varga, how he wants to keep the planned deficit of 4.9 % with higher spending for procurement and blocked EU funding.