Democracy Digest: Hungary’s ‘Luxury Elites’ Try to Outrun the Reckoning

The unravelling of Viktor Orban’s system is taking unexpected turns. This week the owner of Lounge, a preferred communications, advertising and event company of the previous Fidesz government, gave a tearful interview to Kontroll, a Tisza-party outlet, in which he offered all his companies as well as investments in private equity funds to the Hungarian state free of charge. Gyula Balasy, a 46-year-old entrepreneur who became a multi-millionaire thanks to exclusive government contracts and was listed 30th on Forbes 2025 list of richest Hungarians with a fortune of over 290 million euros, claimed he only wanted to save the 500-plus employees of his companies. With voice cracking and tears welling up, he spoke about how much he loved Hungary and wanted to continue living there with his family. The interview came after news emerged that a foreign-owned Hungarian bank had frozen his accounts and the Hungarian Tax Authority was investigating his companies over money laundering and embezzlement. Balasy said his companies are worth 80 billion forints (210 million euros), but insiders claim they are worth next to nothing, as they subsisted entirely on government contracts that will no longer be available. The interview shocked the Hungarian public and entire advertising sector, which regarded Balasy as the epitome of the Fidesz-close “luxury elite” living large on public money, enjoying the high life in Budapest and Miami, and owning a range of supercars, including a Ferrari Testarossa and a Lamborghini Diablo. According to his rivals, Balasy’s companies were the only advertising companies that ministries and state-owned enterprises were allowed to work with, yet they were still regularly paid four to six times the market price for such services. According to the Corruption Research Center, an anti-graft watchdog, Balasy and his companies received public contracts worth about 3 billion euros. He was also seen as the person behind the government’s regular “national consultations” and scaremongering campaigns, designing and delivering billboards inciting hatred against figures and groups such as George Soros, migrants, the opposition and, in the latest, Ukrainian President Volodymyr Zelensky, opposition leader Peter Magyar and EU Commission President Ursula von der Leyen. Advertising experts said Balasy not only distorted and ruined the advertising market in Hungary, but was also responsible for spreading hatred for years. Asking for forgiveness in an embarrassing interview is unlikely to shield him from consequences. Fidesz politicians were quick to blame Balasy (and his opulent lifestyle) for the crushing election defeat in April. Incoming Prime Minister Magyar merely posted a sentence from his own groundbreaking interview to Partizan in 2024: “The Orban system could collapse faster than many expect.”

Hungary’s second-largest commercial television channel announced this week it will discontinue its flagship news program Tenyek (“Facts”) “as a consequence of the erosion of the brand”. The news program was one of the ugliest propaganda tools used by the Fidesz government over the past decade, for which it was generously rewarded: last year alone it reportedly received 4.2 billion forints (11 million euros) in state advertising. The company is owned by Fidesz-aligned businessman Jozsef Vida, listed 33rd on Forbes rich list, with an estimated wealth of 94 billion forints (250 million euros). Tenyek became infamous for its personalised attacks on opposition politicians, defamatory reporting, and the hundreds of court cases launched against it demanding corrections. Most notoriously, in 2024 it aired a report about then-opposition leader Magyar’s penis when he first appeared in the European parliament – the two-and-a-half-minute report went too far even for the government-friendly Media Authority, which fined the broadcaster. “My aim is that, after drawing the necessary conclusions, with the newly launched brands we will provide news services that meet expected professional standards,” Miklos Vaszily, president and CEO of TV2, told 444.hu, indirectly admitting that they had not done so previously. The most notorious pro-Fidesz anchors were swiftly removed after the April 12 election and the news director was fired, signalling a rapid change in direction. There are also rumours of a possible sale of the broadcaster but this has been refuted by the owners.

Poland’s rule-of-law crisis took another surreal turn this week, when the European Court of Human Rights (ECHR) intervened in a dispute over four judges who were legally elected to the country’s Constitutional Tribunal, but remain unable to start work because President Karol Nawrocki refuses to swear them in personally. In an interim measure issued on May 6, the Strasbourg court ordered Poland to ensure that the judges “are not hindered in taking up and exercising their duties” until further decisions are made in the case. The judges – among them prominent legal scholars Krystian Markiewicz and Maciej Taborowski – had already taken an oath before the speaker of the Sejm and submitted notarised versions to the presidential office after Nawrocki declined to receive them. Yet they remain in limbo: formally elected for nine-year terms but blocked from adjudicating cases. The episode illustrates how Poland’s institutional crisis increasingly operates through procedural deadlock and symbolic obstruction – a constitutional body is left partially paralysed because of a dispute over the choreography of an oath ceremony. The four judges resigned from previous positions assuming they would enter office, only to discover that legal status and practical authority are no longer the same thing in Poland’s fractured judiciary. The Constitutional Tribunal – still stuffed with judges appointed during the previous PiS government – itself reacted with open hostility to the ECHR measure. Its spokeswoman said on X the ECHR has no authority over “the constitutional organs of the Republic of Poland” and accused the applicants of “compromising” themselves by turning to Strasbourg. The Tribunal also argued that the ceremony held in parliament could not count as an oath taken “before the president”, leaving the functioning of a key state institution suspended over the interpretation of a single constitutional phrase.

Nearly four years after one of Europe’s worst ecological disasters in recent memory, the EU Commission has launched infringement proceedings against Poland over its handling of the Oder River crisis. In a formal notice issued last week, the EU Commission accused Poland of failing to protect the river ecosystem despite repeated warnings following the mass fish die-off in 2022, when toxic “golden algae” spread throughout the Oder basin. The disaster killed more than 360 tonnes of fish along a 500-kilometre stretch of river; scientists later estimated that roughly half of the Oder’s fish population may have died. A smaller but still significant wave of fish deaths followed in 2024, suggesting the underlying causes had still not been resolved. According to Brussels, Poland continued to authorise the discharge of highly saline mine water into the river despite evidence linking salinity and nutrient concentration to the algae blooms. The EU Commission also argued that Warsaw failed to adequately protect habitats and species covered under EU environmental law, including Natura 2000 areas, and adopted a river management plan that did not properly reflect the scale of the 2022 catastrophe. The dispute reflects a broader problem that has long accompanied Poland’s economy: environmental protection often remains secondary to mining and heavy industry. Four years on, the Oder crisis is becoming a test of whether the Polish state can move beyond reacting to ecological disasters and begin preventing them.

An upcoming Congress of Sudeten Germans, scheduled to take place in Brno, Czechia’s second-largest city, on May 22-25 has caused controversy and prompted protests. In a draft resolution, the three-party ruling coalition of PM Andrej Babis’s ANO, the far-right SPD and conservative Motorists plan to ask parliament’s lower house to vote to ban holding such a congress in the Czech Republic. “Nobody expected it to be a walk in the park,” acknowledged Bernd Posselt, head of the Sudeten Germans, before adding that the meeting aims to promote reconciliation and will “of course” take place despite opposition from the Czech far right who were among the first to stir up historical grievances. “It is a significant gesture. In a decent European society, nations have been and are able to openly address and admit their darker sides,” argued organiser David Macek from the Meeting Brno association. “From my point of view, what is being planned in Brno is all the more necessary.” While Babis claimed many Czechs saw the planned conference as a “provocation”, officials in Bavaria called the Czech government’s resolution “unfortunate”, arguing that, on the contrary, the congress would show “remembrance and reconciliation are not opposites, but two sides of the same coin”. About 3 million Germans were deported from Czechoslovakia in the aftermath of World War II and thousands died as a result of expulsions that have long stained the country’s post-war history and relations with descendants of Czechoslovakia’s ethnic German community, despite more recent conciliatory steps from both sides.

Czechoslovak Group (CSG), one of Czechia’s largest defence companies, faced a difficult week after the media and investment firm Hunterbrook published a piece on Monday questioning the validity of its business model and threw into doubt its actual production capacity, including in the field of ammunition production, a key component of CSG’s reported growth. Shares of the group, majority-owned by the richest Czech Michal Strnad, plummeted on the Amsterdam and Prague stock exchanges earlier this week, before somewhat recouping some of its losses and stabilising on Wednesday. Combining a hedge fund with an investigative journalism outfit, the New York-based Hunterbrook disclosed in the article it was short selling CSG stock while holding a basket of comparable securities at the time of publication, meaning it had a financial interest in the Czech company’s stock underperforming. In response, CSG called Hunterbrook’s analysis selective, inaccurate and the sign of “a fundamental misunderstanding of CSG’s industrial model [based on] a vertically integrated manufacturing network across multiple plants in multiple countries”. After its record-breaking IPO on the Amsterdam Stock Exchange in January, the price of CSG shares climbed to 33 euros, leading, already back then, some analysts to warn that the stock was overvalued. Employing more than 14,000 people, CSG’s portfolio includes key defence companies like Tatra Trucks, Excalibur Army and Kinetic Group. Last year, the group reported a net profit increase of over 35 per cent while its total revenues reportedly rose by more than 70 per cent year-on-year, according to company statements.

Slovak judges issued a strong warning this week over what they describe as political attacks on judicial independence following criminal complaints filed against Specialised Criminal Court Judge Pamela Zaleska. More than 60 judges have so far joined a petition initiated by Supreme Court Judge Juraj Kliment in support of Zaleska, arguing that the actions of PM Robert Fico and his allies amounted to intimidation of the judiciary. The controversy stems from Zaleska’s 2021 conviction of former special prosecutor Dusan Kovacik, later upheld by the Supreme Court, although his sentence was reduced. After Fico’s justice minister, Boris Susko, filed an extraordinary appeal, the Supreme Court annulled the verdicts in 2025 and returned the case for retrial. Government figures have portrayed the decision as Kovacik’s acquittal, despite legal experts disputing that interpretation. Fico, Defence Minister Robert Kalinak and lawyer Marek Para subsequently filed a criminal complaint against Zaleska for alleged abuse of power. However, even the Supreme Court later stated that prosecuting a judge over a judicial decision was inadmissible. The opposition PS party linked the complaint to the upcoming “Purgatory” corruption trial, in which figures linked to Fico’s Smer party are due to stand trial next week. PS claimed the move was intended to exert pressure on the Specialised Criminal Court. Kliment himself has also faced pressure from Fico’s government. Efforts to remove him from the bench have so far failed. In their joint statement, the judges said the attack was “not only against Pamela Zaleska, but against every judge and the entire judiciary”. They also criticised the Judicial Council for failing to respond. Judicial Council chair Marcela Kosova later defended judges’ right to publicly express their views and support collective statements on matters concerning the justice system.

Slovakia’s flagship military hospital project in Presov in eastern Slovakia, repeatedly promoted by the prime minister as a symbol of his government’s achievements, has stalled amid delays, rising costs and questions over transparency. Seven months ago, Fico described the 600-million-euro project as a “monumental work” that he would personally monitor. He confirmed plans for the hospital to open in 2027 ahead of the next general election, and presented it as proof that his government was modernising the country. Yet construction has slowed significantly and the project is expected to miss deadlines by several months. Reports suggest parts of the structure may even need to be demolished and rebuilt because of construction flaws, including substandard concrete in parts of the building. Critics accuse the government of managing the project in a secretive and politically controlled manner. The lower section of the hospital was classified as a military facility, allowing Military Intelligence to commission construction without a public tender. As a result, details about contractors and costs remain undisclosed. The main construction contract reportedly went to companies linked to businessmen close to the government for a price around 100 million euros higher than originally planned. Opposition critics also question why supervision costs were reduced from a planned 9 million euros to 3.3 million. The delays could also threaten access to 200 million euros in EU pandemic recovery funds tied to healthcare investments. However, reports suggest the money could instead be redirected to other hospital projects, including facilities in Martin and Banska Bystrica in central Slovakia.