How to renovate a science lab in Hungary using EU money

A few weeks ago HEC Paris (École des hautes études commerciales de Paris) launched its first “Massive Online Open Course” entitled “Understanding Europe: Why It Matters and What It Can Offer You.” The professor, Alberto Alemanno, is a young, enthusiastic Italian who recounts all the wonderful things the European Union can offer to its citizens. Indeed, the list is impressive. But anyone who is at all familiar with “reality on the ground,” let’s say in Hungary, knows how all those good intentions can be abused. Take the case of a small town in Hungary that received a relatively small grant from the convergence money the country gets from Brussels.

The readers of Hungarian Spectrum have already encountered the hero of our story. On May 1, 2013 I gave an optimistic title to that day’s post: “Greed might be the undoing of Viktor Orbán and his regime.” In it I wrote about two possible corruption cases. One was the allocation of tobacconist concessions in the town of Szekszárd, the county seat of Tolna County. The other was possible fraud in Lajos Simicska’s Közgép, the company that received about 75% of all government contracts financed by Brussels. Of course, I was naive. Although the case of Szekszárd was absolutely clear cut, there were no consequences of the revelations. As for the second case, I guessed wrong: the suspension of EU funds had nothing to do with Közgép.

The hero in Szekszárd was Ákos Hadházy, a veterinarian who had served on the city council representing Fidesz. It was he who discovered that the Fidesz mayor and his colleagues had the list of applicants for tobacconist concessions in Szekszárd and singlehandedly decided the winners: friends and relatives, and people who sympathized with Fidesz. I detailed Hadházy’s struggle with his conscience that eventually led him to HVG, which published the story.

Hadházy subsequently left Fidesz but decided to remain in politics. He eventually settled for LMP and today is representing this party on the Szekszárd city council. Our veterinarian continues to keep his eyes and ears open, looking for possible corruption. He even started a blog, It was here that he published his latest findings about the fate of monies received from the European Union.

The Béla I Gymnasium needed a new chemistry-physics lab. This project involved tearing down a wall between two smaller classrooms to make the new lab 155 m². They also created a room for equipment, laid linoleum down on the floors, and supplied the desks with gas pipes, electricity, and water. The cost was 157 million forints or €518,811.74. As Hadházy rightly pointed out, from that amount of money one can build a nice new house.

The science lab at Béla I Gymnasium, Szekszárd on the opening day

The science lab at Béla I Gymnasium, Szekszárd on opening day

Here is a list of the items that money was spent on. The town paid €21,000 for advice on writing the grant application. Another €6,000 was spent on “planning and technical supervision.” €59,000 went for IKT (információs és kommunikációs technológiák) which included 2 intelligent blackboards, 2 simple blackboards, voting software for 40, a projector, and 4 laptops. Hadházy checked the prices of these pieces of equipment and found that one could buy them for half the price. The town also needed a feasibility study, costing €16,524. Hadházy had difficulty interpreting the item “creation of pedagogical and professional concepts,” which was €21,500. After all, the experiments the students have to conduct can be found in the textbooks; one does not have to develop new concepts for them.

But we are nowhere close to the end of the list. €66,000 was spent on a “multimedia presentation package.” That involved the performance and description of 100 experiments and their representation on videos.  Another €66,000 was needed for “digital material” on chemistry, biology, physics. Almost €66,000  was spent on paper, telephone, and dues. A hefty €51,000 was spent on software that helps allocate space for the different classes in the lab. The project management team received €66,000. And finally €53,000 was spent on outreach, marketing, and the opening day. At the opening there were several speakers, including Rózsa Hoffmann and the local head of the Klebersberg Intézet. There were couple of open house days for students where modest refreshments–coffee, soft drinks, biscuits–were served. Hadházy points out that these kinds of projects are underway throughout the country and the waste is staggering.

As HVG noted in a follow-up article, this particular Szekszárd project by itself is small potatoes; it is just one of 52 projects currently in progress. The entire cost of these projects is borne by the European Union. As one of the Fidesz members of the Szekszárd city council indignantly told Hadházy when he complained about the exorbitant cost, nothing terrible happened here because after all “it did not cost Szekszárd a penny.”

Since then the lawyers of LMP decided that the Szekszárd case warrants further investigation. So, LMP asked János Lázár to look into the case. A strange person to ask for help. After all, it is János Lázár who is responsible for the dispersion of EU grants, and surely it is his staff who oversees the projects. So, if they don’t find it excessive to spend €418,811.74 s on a very ordinary looking science lab then surely they will not investigate either this case or any of the many similar ones. As for the beneficiaries of these contracts, the city fathers, mostly affiliated with Fidesz, choose the winners. Out of the fourteen-member council there are only five opposition members (two LMP, two MSZP, and one Jobbik). The majority makes sure that their friends and acquaintances receive the inflated contracts.

I don’t know what happens in Brussels. Does anyone there find these figures excessive or do they just hand the money over without asking any questions? Perhaps they should take a more serious look at what is happening to the money they so generously give to their poorer neighbors.


  1. … voting software for 40

    ROTFLMAO like the educated Latins would have said if they had cell phones …

    Extending the license to 60 would probably cost another 2 millions. I’m trying to imagine what would the software do when the 41st pupil tries to vote on something. “No! You can’t vote! Sorry! Pay up first!”

    Kinda like teaching Orban’s democracy in action …

  2. And a typical teacher in Hungary would work for approximately 100 years in this refurbished classroom before their income matched the cost of refurbishment. Staggering indeed.

  3. Eva, I do nothing that the Hungarian forint numbers mean too much to anyone. You are assuming that all of your readers get a sense of these numbers, but even I had ti use a currency exchange to get a grasp of how inflated these costs are.

    So… Chemistry lab in an already existing school
    Tota cost: €518,811.74.
    €21,000 for advice on writing the grant application
    €16,524 feasibility study
    €21,500 creation of pedagogical and professional concepts
    €6,000 was spent on “planning and technical supervision.”
    €46,000 project management
    €51,000 forints was spent on software that helps allocate space for the different classes in the lab.
    €59,000 went for IKT (információs és kommunikációs technológiák) which included
    2 intelligent blackboards, 2 simple blackboards, voting software for 40,
    a projector, and 4 laptops.
    €66,000 multimedia presentation package (the performance and description of 100 experiments and their representation on videos)
    €66,000 digital material on chemistry, biology, physics.
    €15,500 creation of pedagogical and professional concepts was spent on paper, telephone, and dues.
    €53,000 was spent on outreach, marketing, and the opening day.

    Reality check. The IKT items Smartboards (intelligent blackboards) are about €1,500/each in Hungary. Blackboards are about €200/each. Voting software €150 or free at many online sources. Apple laptops €1000/ each.
    Total = €8,000 Lets go even higher with the top-top brands, and double it all = €16,000 versus the €59,000 spent.

  4. Hi all,

    Somewhat OT but let me add another link (article is in Hungarian) on how perfect Fidesz’ state planning is in general even when no cronyism may necessarily have been involved:

    What really boggles the mind that no significant political movement has emerged in Hungary this day and age that challenged the state’s overwhelming involvement in running the economy which has been a recipe for disaster during the last 70 years (certainly not since the disappearing act of the early SzDSz).

  5. Horthy put Hungary on a suicide track.
    Was there any significant political protest?
    Jews and Christians were equally brain-dead.
    Hungary must be saved by the atheists.

  6. FutureMisi,
    No not all the Hungarians (Christians and others) have been “brain-dead” during the Horthy period. And I am afraid, if Hungary could be saved only by the atheists this would take a lot of time. One can hope with the help of many decent Hungarians the “postcommunist Maffiastate” will be again a normal western democracy. The sooner the better.

  7. Economy.

    The official Statistical Office KSH showed 3.5% GDP growth 1st quarter 2014 vs 1st quarter 2013.

    It turns out that at least 0.6% of this growth came from the high level of fostered work (közmunka) before the election. (200 vs 60 thousand). Had “fostered workers” been in the unemployed category, their benefit would not have counted towards the GDP. But as “fostered workers” their gross cost including taxes and fees were added to the GDP.

    The article above also details that the GDP numbers simply don’t add up (look up the remarks about the “mystery of the GDP deflator”).

    Wait, there is more coming:

    On September 30, 2014 the way the Statistical Office calculates the GDP will change.
    The new, “ESA2010” method will show an immediate one to two per cent jump in the GDP.

  8. FutureMisi,

    There are plenty of atheists in Hungary, whether they admit to it or not, but they don’t seem to be doing much more than the believers. There are good and bad people in every religious group. Please don’t lump all Christians in with those who vote for KDNP/Fidesz/Jobbik. You certainly shouldn’t condemn Jews along with Christians, especially since they are represented on both sides of the democracy argument/struggle in Hungary (and elsewhere, I’m sure).

    Instead, let’s all condemn the extremists, who insist, usually hypocritically, that everyone who doesn’t agree with their religious ideology is not only wrong, but evil and traitorous, and does not deserve to have a say in how society’s rules are written and enforced.

  9. – The EU is the leader, of a classroom of 28 students

    – The EU set up a system where it takes some money from the 28 students, and gives their own money back to them, after spending a lot for itself.

    – When it gives back the student’s own money, they can not spend their own money freely, they have to write 100 page explanations to the class leader each time they spend a tiny amount.

    -After writing the explanation they still can only spend on some very limited goals the class leader finds acceptable

    – Writing 100s of pages of text for being able to spend your own money also costs money.

    – The class leader likes to extort the students: if you don’t spend this money until time X It will take away all the money.

    As a result most of the money is wasted, but this is not some type of specialty: it is the very core of the system. The system itself is built ON waste and the disregard for the money of the students. Spending money smartly requires time and requires freedom to decide. If you restrict time and restrict freedom of thought most of the money will be wasted.

    You give money to someone and say: “Spend it all in time period X or I will take back all this money I gave you”. What will be their first priority? To spend all the money in time period X!!

    But what if saving that money is a better idea? Putting it in the bank and waiting to spend it for an emergency, where it will be really needed. Or there will be a better project two weeks after time period X.

    And the students who come from poor families are all told to love the system because even with all the waste, the rich father of Hans makes so much money that he doesn’t really care and most of the time just throws money at problems hoping that will make them go away.

    But the problem is the way the system was set up, at the core the system is rotten. Even if temporarily some poor kid benefits in the class, the waste will always be there. It is built into the rotten system.

  10. Some1,

    “Reality check. The IKT items Smartboards (intelligent blackboards) are about €1,500/each in Hungary. Blackboards are about €200/each. Voting software €150 or free at many online sources. Apple laptops €1000/ each.
    Total = €8,000 Lets go even higher with the top-top brands, and double it all = €16,000 versus the €59,000 spent.”

    Two modifiers: the school authorities could probably get better prices, since I assume that they don’t need to wander down to the local MediaMarkt to buy these items retail. Wholesale purchases usually beat even internet prices.

    Don’t forget that someone with actual expertise needs to install the electronic devices. If they have someone like that on staff, he or she would have to forgo his or her usual duties, meaning there is a an opportunity cost that must be factored into the bill. Probably the school would hire an expert, who does not have wholesale rates. Even in Hungary these people are not cheap, since they have a strong incentive to move to other countries where they can make more money.

    In the end, the IT prices are inflated, but perhaps not by quite as much as it seems. The other line items in the budget are where the real theft is located, in my opinion.

  11. tappanch, I will have a closer look at the portfolio text, but GDP numbers have to add up only in current price folyo aron and unadjusted. In all other cases they need not add up. The mystery of the deflator is perhaps less of a mystery if you do not equate the GDP deflator with consumer prices. The relatively high GDP deflator in Hungary appears to be mainly the result of the deflator of government consumption, so the cost of government consumption expenditure. Probably the közmunka workers were included here (but I do not know these specifics of course). And that makes sense, money is indeed spent in this category, were there not some wage increases for teachers and doctors? This would all fall into this category.

  12. @ rotten system:

    “The EU is the leader, of a classroom of 28 students

    – The EU set up a system where it takes some money from the 28 students, and gives their own money back to them, after spending a lot for itself.”

    The “lot” of money ends up being some 6%. I think this is what Eva mentioned recently. And, unlike in a school, where all members of the class contribute equal amounts, members of the EU contribute vastly different amounts. It is not their own money they get back: there are net “winners” and net “losers.” The analogy is not a particularly good one.

    Where the “rottenness” comes from is usually at the local level. The skimming off of EU funds is something that is and has been common practice in Hungary for years. And not just EU funds but ANY funds from ANYWHERE. The practices described in the article are things easily recognizable to anyone in this country. Happened under MSZP, continues under Fidesz. Let’s just hope we don’t find out that Jobbik is exactly the same…

  13. Hungary failed as a Christian nation. The list of error, sins, and mistakes is infinite.

    Its brilliant Enlightened past did not save it.

    The Enlightenment could not develop deep roots in Hungary.

    The Hungarian Jewish community failed in a closely related way. Together, and separately, collectively and individually.

    Luckily, the mostly Hungarian experiment, Zionism is still trying to change the course of history.

    Except for the Kossuth, Deak, Szecheny, Kolcsey, Vorosmarty….period, Hungary was the sick child of humanity.

    The European Enlightenment, humanity has not been not strong enough there. The underpolished majority accepted or produced shallow leaders, Tisza, Horthy, Szalasi, communist jokers, and post-communist failures.

    Our esteemed Googly is trying nicely to smoothen out the edges, but we need a little more here.

    We need blunt honesty, to change the failed and miserable past. An optimist, I am, can not look into the future with confidence, without cutting the ties to a failed past.

  14. “Curly” can not be serious.
    “Curly” (June 8, 2014 at 5:52 am) wrote lovingly of Jobbik: ” Let’s just hope we don’t find out that Jobbik is exactly the same…”
    “Curly” is betting on Jobbik?
    Can anybody be that anti-intellectual?????
    Will the “Curlies” wake up from that silly dream?
    Will the “Curlies” express complete disapproval of people like the Krisztina Morvay?
    “Curlies” may place hope into Jobbik, but unwillingly toss Hungary into further troubles.

  15. @ goggly June 8, 2014 at 4:23 am
    As I wrote, I even inflated the prices for the benefit of the grant recipient.
    Also, installation cost should not be included the line you have mentioned, as we are talking about renovated classroom, where the renovation cost surely include the electrical outlets.
    At any case €33,000 to install on the walls 4 screens/boards and run some cables seems excessive to me when there were already
    €16,524 spent on feasibility study, €6,000 was spent on “planning and technical supervision” and €46,000 project management.
    What I am most curios about is the €51,000 that helps allocate space for the different classes in the lab, or the €53,000 that was spent on outreach, marketing, and the opening day.

  16. Time To Wake Up, it is time to learn to read. There is nothing “lovingly” written about Jobbik in my comment. I don’t want to find out about Jobbik’s attitude to corruption (which I assume would be the exact same as many people’s attitude here, in particular among politicians) because I don’t want them to be elected into power in the first place. As a non-Hungarian living in this country, I would have to be a real masochist to want that.

    Sorry that you misinterpreted my comments.

  17. “Curly” was kind to reply my points.
    Unfortunately, Jobbik has been very well financed to recruit many naive and bitter voters.
    The leaders can not escape our suspicions, and are pushing plenty of racist incitements, just to gain a few votes.

    Our judges are not ruling against them, unless Jobbik is ready to sign a detailed confession.

    Other opinions do not count in Hungarian courts.

    The glory of Hungary was produced by the liberation theories of Deak/Kossuth/Szecheny.
    Will of you begin reading the speeches of Deak, and the biographies of Deak in Hungarian and English.

    Those ideals hold up even today very well, and can be the building blocks of liberty and of a well defended universal freedom.

  18. Karl Pfeifer and Googly commented kindly.

    I feel, all Hungarian Christians and Jews and atheists should feel a degree of shame for the serial failures of the past.

    After that, a cleansing could start, to erase acts of the Horthy, Szalasi, Rakosi, Kadar, Orban era.

  19. tappanch, according to my reading of the data, the construction boom of OV is quite prominent now in the data, and as regards the deflator, there is indeed a very striking increase in the deflator of government expenditure, but on the supply side it is financial intermediation of all things, not public services (so apparently not those wage increases that I suspected earlier). Actually, I would also like to know what that is.

  20. About the costs of the lab, what proofs are there actually that this was indeed funded to this extent by the EU? The EU is co-financing, so at least part of it was paid by the Hungarian tax payer directly, and also: not everything is always accepted. I wonder whether this huge amount of money that is said as being all European funds are indeed European funds (not only in this lab but more generally). It is easier to spend so freely when one can put forward someone else is paying, perhaps in some cases there are nobody knows what type of ultimately Hungarian funds that are employed here.

  21. Brussels is notoriously bad at monitoring how EU tax payers’ money is spent. There are numerous similar stories from all across the EU and the Balkans. I can point to numerous other examples where structural funds have been used to the exact opposite than was intended. EU funds to support inclusion of Roma kids in Czech Republic are used for continued segregation of Roma kids into special schools. Or look at how EU money is used by Hungary to segregate people with mental disabilities in closed institutions instead of what it was intended for community based living solutions. Shameful.

  22. Lydia, I have no doubts about that. It is after all the member states’ authorities who are organising the selection of projects. And yet the amount allegedly used by OV appears to be so large (roads, hospitals, now schools) that I asked whether indeed all is (co-)financed by the EU. Also the programme under which this is being done (what type of structural fund).

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