The liquidation of Hungary’s public interest asset management foundations has been completed, with assets previously transferred to the foundations returning to the state. Transport and Investment Minister Dávid Vitézy says four foundations alone have returned around HUF 100 billion (EUR 276 million) in state assets to the budget.

HUF 100 billion returned to the state

The liquidation of Hungary’s public interest asset management foundations (KEKVAs) was completed at the end of August, meaning assets previously transferred to the foundations have now returned to state ownership.

Dávid Vitézy, Minister for Transport and Investment, said the process had been carried out over the past two months by liquidators appointed by the government. The ministries concerned will now take over the management of the assets and the functions previously performed by the foundations.

In the case of the Transport and Investment Ministry, four foundations were involved:

  • the Millenáris Scientific Cultural Foundation,
  • the Central European Foundation for the Preservation of Built Heritage,
  • the Hauszmann Foundation, and
  • the Central European Education Foundation.

According to Vitézy, taking over these four foundations has brought around HUF 100 billion worth of assets back under state control.

Government says public services will not suffer

Vitézy stressed that the restructuring would not negatively affect the day-to-day operation of the institutions or the services they provide. He argued that the new system would eliminate unnecessary positions while making the use of significant amounts of state property more transparent and subject to public oversight.

“There will be no public task or service whose quality will deteriorate under the new system,” Vitézy said, adding that numerous positions he described as unnecessary “pay-outs” had been eliminated.

The minister also portrayed the move as a major change in how public assets are managed, saying assets originating from public funds were now returning to the state.

KEKVA system was a long-running EU dispute

The foundations were originally established under the previous Fidesz government, but Vitézy has strongly criticised the system, arguing that it allowed state assets and public funds to be managed in an insufficiently transparent manner.

He claimed that the governing boards of the foundations were largely made up of Fidesz politicians and that the system was designed to keep control of the assets in the hands of people linked to the former governing party even after a possible change of government.

The KEKVA system has also been at the centre of a long-running dispute between Hungary and the European Commission. The Commission had criticised the presence of politicians on the foundations’ governing boards and their management of state assets, with reforms to the system becoming one of the conditions linked to the release of EU funding.

Vitézy argued that the previous government had refused to dismantle the system despite the consequences for Hungary’s access to EU funds.

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Tisza government calls the reform a major victory

According to Vitézy, the newly elected parliament passed legislation to wind up all KEKVAs only weeks after its formation, with publicly funded assets subsequently returning to the state. He described the completion of the process as a major achievement for the new Tisza government, which took office earlier this year.

“The opaque KEKVA system has been dismantled, state assets have been recovered and EU funds have been brought home,” Vitézy said.