No good players, no spectators but more and more stadiums

There was great excitement in government circles yesterday in the wake of the news that the third quarter Hungarian GDP grew by 1.8%. Observers who look around the country couldn’t quite believe that number and skeptics immediately questioned the figures of the Central Statistical Office.

No, the numbers are not falsified, but if they are not put into context they are misleading. What the ordinary citizen, even the one who more or less follows the news, doesn’t realize is that a year ago during the same period there was a decrease in the GDP of 1.7% compared to 2011. Thus, this single figure simply indicates that we are where we were two years ago. Moreover, economic growth during the first three quarters of 2013 didn’t herald a robust recovery. It was a modest 0.5%.

Prospects for the future are not especially bright because investment is still very low and comes mostly in the form of large government projects financed by the European Union. Since the Orbán government stopped all convergence projects that were under way in 2010, only a fraction of the available subsidies was used as late as the summer of this year. Then János Lázár took over the office handling EU projects and promised to begin large and hitherto postponed projects in a great hurry. According to critics, the government has been spending money with very little thought for utility. I for one find it outrageous that billions of euros given to Hungary by the citizens of better-off countries in the European Union go for projects that have nothing to do with convergence.

Let’s focus on the most objectionable: football stadiums. As of August 2013 a total of 123 billion forints was set aside for stadiums whose construction was already under way. And announcements over the last few months indicated that the Hungarian government will spend an additional 110-130 billion forints refurbishing existing stadiums or building new ones. These new stadiums, taken together, will be able to seat about 110,000 football fans. In the fall of 2012 the average number of spectators at the matches of Division I was 2,807; this number decreased to 2,728 during the 2012/13 season. Attendance varied widely by club. Ferencváros averaged 6,174; Diósgyőr, 5,669; Debrecen, 4,400; and Szombathely, 3,433. Then there was Mezőkövesd with an average attendance of 800 and the famed Felcsút with a mere 300-500 spectators.

Some 80% of the population object to spending public money for building or refurbishing stadiums. As far as Felcsút is concerned, even the majority of Fidesz voters disapprove of Viktor Orbán’s pet project. Yet voter dislike of this stadium building frenzy didn’t dampen Viktor Orbán’s zeal. In the 2014 budget the government allocated an additional 82.8 billion forints for stadiums.

Two days ago Népszabadság learned that the cabinet had discussed refurbishing and/or expanding twenty-six existing stadiums. The cost will be 21 billion forints. Most of the money will go to Honvéd (Army) in Budapest. In addition, Pécs, Paks, Kaposvár, Nyíregyháza, Zalaegerszeg, Vasas, Cegléd, Gyimót, Kisvárda, Szigetszentmiklós and several others will all have stadiums. Soon there will scarcely be any larger than average size town in Hungary without a spanky new stadium. Someone wittily remarked that if sometime in the distant future archaeologists undertake extensive excavations in the Carpathian Basin they will wonder what all those oval-shaped foundations were used for by the people who lived here thousands of years before.

Bishop Kiss-Rigó plays football / MTI

It seems that the football stadium mania is infectious. The Szeged-Csanádi Diocese started a business venture, Szeged 2011 Labdarugó Sportszolgáltató Kft. The bishop, László Kiss-Rigó, is keenly interested in football. He put half a million forints of his own money into the Grosics Football Academy in Gyula. He also put money into Profi Futball Kft. Now Kiss-Rigó wants to rebuild one of the two abandoned football stadiums in Szeged. Never mind that Szeged doesn’t even have a team. The diocese’s company will build a stadium–and maybe “they will come.”

The reconstruction of the stadium will cost about 2-3 billion forints, and the Hungarian Football Association (MLSZ) already promised the diocese-owned company 700 million forints toward the cost. The company itself hasn’t been doing well. In fact, just last year it lost 95 million forints. However, the bishop is optimistic that his business venture will receive a few billions from private donations–donations that can be written off on the donors’ taxes. Just as Felcsút managed to get 4-5 billion, Kiss-Rigó, a great Fidesz supporter, will most likely get generous support thanks to his connection to Viktor Orbán. As far permission from the city of Szeged is concerned, one doesn’t have to worry. Although the mayor is a socialist, the majority of the city fathers are members of Fidesz. They already gave their blessing to the bishop’s project.

But not all is in order in the Szeged-Csanád Diocese. The Hungarian equivalent of the Internal Revenue Service (NAV) is investigating possible tax fraud and other unspecified felonious acts. And that leads me to the surprising fact that businesses owned by church organizations have all sorts of privileges granted by the Orbán government that other businesses don’t receive. For example, lower corporate taxes, no taxes on company vehicles, and lower personal income tax rates for ministers and priests. The Democratic Coalition included repeal of these perks among the party’s sixteen points.

The investigation of the Szeged-Csanád Diocese is still under way. An earlier investigation into the crooked business practices of the Pécs Diocese ended the career of the bishop of Pécs.

It would be interesting to know the extent to which churches are engaged in business ventures and how much the Hungarian government is helping them along. In the Szeged case, the Hungarian Football Association’s 700 million donation to Kiss-Rigó’s business venture comes from the Hungarian taxpayers, who are most likely not terribly keen on a church-built stadium in Szeged.

Viktor Orbán at Tusnádfürdő/Baile Tusnad

I just finished listening to Viktor Orbán’s 56-minute speech at Tusnádfürdő/Baile Tusnad in Romania. He had a large, enthusiastic audience despite the heat. Applause was especially loud and long when Orbán talked about his fight against multinational companies, banks, and the European Union.  In the audience one could see very young children who, though they most likely didn’t understand a word, were enthusiastic nonetheless. It seems, however, that not everybody was equally impressed. The camera stayed focused for a fairly long time on a man who seemed to have fallen asleep, and I heard later that a couple of men threw tomatoes at Orbán on his way out from the camp site.

Source: MTI / Photo László Beliczay

Viktor Orbán made sure that his audience doesn’t forget about next year’s election. He began his speech with a reference to it and at the end stressed the importance of his staying in power and continuing the policies that will lead to a complete transformation of Hungary’s political and economic system.

It seems that once Orbán comes up with a pet theory about the political and economic functioning of the universe, and he has a large inventory of them, he simply cannot let it go. In fact, in every new speech that touches on one of these theories he ratchets up his rhetoric and makes increasingly indefensible statements. For instance, his original theory about the decline of the West has by now become a prediction of a political and military clash between the West led by the United States and Asia led by China. By now he makes no secret of his intense dislike of the United States and accuses it of “trying to prevent other countries from catching up with it.”

Or, a few months ago he talked about the dominance of larger member states over the smaller ones within the European Union. By now this observation has morphed into the conviction that the “great powers” actually exploit the small ones by siphoning financial and human resources away from the smaller countries. The chief culprit here is again the United States. Hungary’s goal is to prevent such an exploitation and brain drain. This is in fact the essence of Hungary’s national strategy. To stop the great powers and use this new world’s opportunities to Hungary’s advantage.

After a rather lengthy and debatable historical treatise starting with World War I, he reached his favorite subject, the present financial crisis which in his opinion cannot be solved by the European Union. The institutional framework of the Union, the Commission, the Parliament “are unfit to handle the historical challenges facing us.” Orbán’s remedy is to shift the locus of power to individual nation states because only they are capable of overcoming the present crisis.

Orbán rarely passes up an opportunity for double-talk. This time he quoted a line from Sándor Kányádi, a Hungarian poet from Transylvania who had a line referring not to clear to what that “the dog is the same, only the chain was changed.” Of course, he immediately added that the change that occurred then wasn’t as simple as “left the tanks and came the banks,” as István Csurka claimed in the early 1990s, but “there is something to it.”

Then came a rather confused explanation of the differences between the gross national product (GDP) and gross national income (GNI). GDP is the market value of all officially recognized final goods and services produced within a country in a given period of time. GNI, a less familiar concept, consists of personal consumption expenditures, gross private investment, government consumption expenditures, the net income from assets abroad, and gross exports of goods and services after deducting gross imports of goods and services and direct business taxes.

Hungary’s GNI, Orbán claimed, is greater than its GDP. The difference, some two trillion forints annually, is moved abroad by banks and foreign companies. When national governments are in power, he argued, the difference between the two economic measures shrinks; when the socialists and liberals govern, the gap widens.

Let me stop for a moment. According to data published by the Hungarian Central Statistical Office, this claim is inaccurate. The Budapest Business Journal  wrote in September 2010: “The gap between nominal GDP and GNI widened each year between 2003 and 2007, from HUF 871 billion or 4.6% of GDP to 6.9%, but has narrowed since, dropping to HUF 1,721 billion or 6.4% of GDP in 2008 and to HUF 1,303 billion or 5% in 2009, the figures show.”

Why the gap between the GNI and the GDP in Hungary? According to Orbán the explanation is simple: “We created this wealth and it disappeared” abroad. He admitted that Hungary couldn’t manufacture cars on its own and therefore if Mercedes Benz makes a profit and takes this profit out of the country it is legitimate. After all, they provide job opportunities. But the banks are different. They amassed unreasonably large profits and therefore the bank levies are justified. These banks as well as the utility companies are siphoning money of the country. Again, let’s stop for a minute. It is a well-known fact that the foreign banks have been pumping money into their Hungarian subsidiaries for a number of years. That is the reason they haven’t gone under yet.

After this harangue against foreign companies and banks he listed eleven accomplishments he is proud of. I do not have the space, nor is it even worth the effort, to list them all. However, a couple of points that he made in connection with these accomplishments are worth noting.

One is his belief that if a country’s national debt is 90% or more of GDP there can be no economic growth. This mistaken notion most likely comes from a since largely debunked study by Carmen Reinhart and Ken Rogoff, two otherwise respected economists. The study, called “Growth in a Time of Debt,” claimed that economic growth slowed rather dramatically for countries whose public debt crossed the threshold of 90% of the gross domestic product.  Unfortunately, they made some errors in their calculations. The most serious was their failure to include years of data that showed Australia, Canada, and New Zealand enjoying high economic growth and high debt at the same time. More can be read about the Reinhart-Rogoff study here. It seems that whoever told Orbán about the correlation between national debt and economic growth knew about the study but not about its “Excel coding errors.”

Among the laundry list of accomplishments I found reference to an odd economic theory which even Orbán admitted was unique. As he put it, “as regards this question everybody is on the other side and we are the only ones on this side.” Well, that is frightening enough. So, what was Orbán talking about? Those on the other side claim that economic growth must come first and that this growth will then foster higher employment. But Viktor Orbán is convinced that exactly the opposite is true. First, one creates jobs, and this job creation will create economic growth. He claims that this is precisely what happened in the United States in the 1930s. Alas, it is a well known fact that it wasn’t Roosevelt’s public works program that managed to pull the U.S. economy out of the great depression. But Orbán is convinced that the same strategy will work in Hungary although even he has to admit that the two situations cannot be compared because the United States was rich enough to start building railroads and such while Hungary, being poor, can only employ public workers to dig ditches. How 300,000 ditch diggers can lead Hungary out of the economic crisis remains a well-kept secret.

We might think that these primitive economic notions are frightening, but Orbán received his greatest applause when he said that Hungary is following a road on which he is completely alone. Where that road will take the country I hate to think.

Some good news for the Orbán government, but there are still many questions

Viktor Orbán received a couple of nice presents today for his fiftieth birthday. One was from the Hungarian Central Statistical Office (KSH) and the other from Olli Rehn, European Commissioner for Economic and Monetary Affairs and the Euro.

According to the Statistical Office, the unemployment rate ticked lower to 11.0% in the three months ending in April from 11.8% in the first quarter of 2013. On the surface this improvement seems both rapid and substantial. But, as Portfolio.hu points out, “The change in the number of employed shows the same strong fluctuating pattern as in the previous years. The main cause of the fluctuation is the year-end stoppage of public work schemes.”

 Another possible reason for the improving unemployment numbers (although this does not address the issue of seasonality and would take more time to be borne out) is that unemployment benefits run out quickly in Hungary. The Orbán government reduced eligibility for benefits to three months, the lowest perhaps in all of Europe. Whether these people simply drop out of the officially tracked work force after their benefits run out or find a job is hard to say, but we do know that the number of employed workers grew by 61,000 over the same period last year. Some of these people may have found part-time work paying below the minimum wage as employees of the public works program that began full-scale under the Orbán administration. Only a month ago, one of the undersecretaries of the Ministry of National Economy boasted about the very high number of people in the program: 300,000 this year as opposed to 261,000 last year. If his figures are correct, almost 65% of the recent job gains come from the public works program. These people don’t produce any real profit. In fact, they are a drag on the central budget–this year a projected 153.7 billion forints. So I think we should wait before passing final judgment on the employment figures.

The other piece of news came from Brussels in the early afternoon, and it was not much of a surprise to anyone. It has been clear for at least a week that it would be very difficult not to recommend lifting the excessive deficit procedure in Hungary’s case. Due to a series of tax hikes, mostly levies on businesses and banks that affected the population only indirectly, the government managed to decrease the deficit to under 3.0%. Naturally, the government considers this a major victory that vindicates Budapest’s economic policy.

Viktor Orbán had single-mindedly pursued the goal of getting out from under the excessive deficit procedure. Some people argue that he was acting out of fear of a cutoff of EU development funds. But there was never any serious threat of the country’s being deprived of funds because of its deficit, which pales in comparison to the deficits of some other European countries. I suspect that what Viktor Orbán really wanted was to stop the EU monitoring that went hand in hand with being under the excessive deficit procedure. After all, he backed away from IMF funding because they would have closely monitored the Hungarian economy. But, I fear, Viktor Orbán is mistaken. The number crunchers in Brussels will continue to monitor Hungarian economic data closely. Viktor Orbán won’t have a free hand. Hungary, being part of the EU, is expected to follow its advice. If it doesn’t, Hungary may find itself under the excessive deficit procedure once again. Such a possibility is not unheard of. After all, this is most likely what will happen to Malta.

Hungarian deficit between 2001 and 2014 / Ecostat, Népszava, graphics by Szilvia Kőszegi

Unfortunately, Hungary’s unorthodox economic policies aimed at lowering the budget deficit were costly to both the population and the economy. Trying to hide economic austerity from the general population, the government taxed businesses and banks to death and was unable to stave off an economic recession. Yes, the deficit is low at the moment, but how long can the government continue an economic policy that does not produce growth?

The Orbán government was also fixated on reducing the national debt, which was not higher than in most European countries. They confiscated 95% of all private pension funds, in part to lower the debt. Since then that enormous sum of money has evaporated. Some of it was absorbed into general funds and more than half of it went to the bottomless pit of the national debt burden. Because Viktor Orbán was unwilling to accept the terms of a low interest rate IMF loan, the country was forced to borrow at market rates. The sad result is that the Hungarian national debt is higher today than it was in 2010.

Yes, Hungary is off the hook for the time being, but Brussels made several recommendations and suggested specific steps the country should take to achieve sustainable economic growth.

The European Commission was critical of the Hungarian government for concentrating on the revenue side of the ledger.  They suggested restoring the former competence of the Fiscal Council and advocated a return to normal lending by decreasing the bank levies. They criticized the newly introduced flat tax which favors the rich and over-taxes the poor. They maintained that Hungary should concentrate on employment. Hungary has one of the lowest rates of labor market participation in the Union. They called the attention to the social situation that continues to worsen with 31% of the population at risk of poverty.

They suggested that the country “create a supportive business environment, in particular restore an attractive environment for foreign direct investors, by making the regulatory framework more stable and by fostering market competition. Ensure the prompt implementation of measures envisaged to reduce the administrative burden, improve competition in public procurement and take adequate measures to tackle corruption.”  They criticized the measures introduced in the field of education. As opposed to earlier years when fewer people were dropping out of school, this trend was reversed in 2011. They are concerned about the “ongoing education reform” in higher education. And finally they criticized the regulation of energy prices. In their opinion these regulations should be gradually phased out while “protecting the economically vulnerable.” Public transport should also be more cost efficient.

These are precisely the steps that the Orbán government doesn’t want to take. But if they do not follow this sound advice, it is unlikely that considerable economic growth can be achieved in the long run.

The end of the Hungarian recession?

The big news of the day is that the Hungarian recession has ended. Well, this is technically true, that is, if the quick estimates prove to be correct. A common back-of-the-envelope definition of recession is two consecutive periods of shrinking GDP. By this definition Hungary was mired in recession throughout 2012. The Central Statistical Office (Központi Statisztikai Hivatal) now claims that GDP grew in the first quarter of 2013 by 0.7% when compared to the last quarter of 2012. Measured year over year–that is, comparing the first quarter of 2013 to the first quarter of 2012, however, Hungary has experienced a 0.9% decline in GDP. As Gordon Bajnai’s Együtt 2014-PM said, “a slower rate of decrease is not growth. It simply means that the decline is diminished somewhat.”

Needless to say, the government is ecstatic. András Giró-Szász, the government spokesman, announced that the government’s efforts have paid off. From here on there is no question that Hungary’s economy will grow rapidly. The somewhat surprising figure is considered to be an important watershed. Some right-wing papers compared the Hungarian figures to the disappointing news of the European Union’s deepening recession by pointing out that while the Hungarian figures are in positive territory, the EU reported a 0.7% decline. Yes, but the 0.7% decline must be compared to the Hungarian 0.9% decline on a year over year basis. And, by the way, few Hungarian newspapers bothered to report that Romania’s GDP grew by 2.1%.

therooftopblog.wordpress.com

Mihály Varga acted as if the government’s predictions made at the end of 2012 were right on target. They knew all along that 2013 would be a turning point, at least for economic growth. Considering how bad the budgetary and economic predictions of Varga’s ministry were, I take his claim with a grain of salt. Viktor Orbán himself predicted that 2013 would be “the year of reaping.” In February 2012 Orbán said that 2010 was the year of collaboration, 2011  the year of renewal, 2012 the year of take-off, and that 2013 would be the year of growth. Since 2012 wasn’t the year of take-off, Orbán’s prediction might be equally wrong for this year. Even the most optimistic predictions talk about only modest growth, under 1%.

One thing that is worrisome is the steep decline in industrial production over the last year. Although the overall decline was only 0.9%, industrial production was down by 2.9%.

An article that analyzes and tries to explain what these new GDP figures mean puts it this way: “Is it growth? Is it a decrease? Is it stagnation?”… None of the above.” After this introduction the author of the article explains that since growth is measured on a year on year basis, Hungary is not out of recession. It is troubling that the figures for the first quarter of 2013 are even worse than the truly terrible figures for the first quarter of 2012. The small growth over the last three months came largely from the building industry and agriculture, which is good news for the poorest section of Hungarian society. On the other hand, it is worrisome that industrial production hasn’t yet regained its 2010 level. Car production has declined and Hungarian-produced durable goods are down a staggering 30% compared to a year ago.

Let me add that the construction industry’s relative growth is most likely heavily influenced by government expenditures.  We have only to think of the billions spent on redesigning Kossuth Square in Budapest and building new football stadiums. If these projects are halted, the construction industry might fall back to its previous dismal performance.

There are also worrying signs as far as the budget is concerned. The cash registers that are supposed to report straight to the Hungarian equivalent of the Internal Revenue Service will not be functioning by July 1 as planned because of technical difficulties, and therefore the rather large amount of revenues that was supposed to come from this source most likely will never reach the treasury. The same problem exists with the e-toll scheme I wrote about earlier. In both cases the Hungarian companies who were chosen couldn’t come up with any acceptable solution.

Longer-term economic growth might be sacrificed for the sake of trying to keep the budget deficit under 3%. (Mind you, building useless stadiums or remaking Kossuth Square to resemble its 1944 self are not productive investments, although Orbán is especially infatuated with “a work-based economy.”) In part because of the heavy tax burden placed on them in an effort to shrink the budget deficit, multi-nationals aren’t exactly swarming into Hungary. And it’s highly unlikely that the small and medium-sized Hungarian businesses that the government is trying to promote can contribute enough to GDP to make up for government and foreign investment shortfalls. Hungary has yet to come up with a compelling growth plan, orthodox or unorthodox.

The Hungarian scene: From economics to parochial schools

It is hard to pick just one topic to discuss today because too many important events have taken place lately.

The biggest bombshell yesterday was the final word on the Hungarian economy’s performance in 2012, which turned out to be worse than expected.  Hungary is still in recession, with the country’s GDP shrinking by another 1.7%. Hungary is the worst performing economy in the region and it doesn’t look as if there will be any change in the trend. After all, in the last quarter the economy performed even worse: the GDP decreased by 2.7% year on year.

The government blames the sluggish economy of the European Union and last year’s drought for the dismal numbers.  György Matolcsy naturally predicted that next year the Hungarian economy will be booming, and in his weekly essay for Heti Válasz he said that in twenty years Hungary will catch up to the living standards of the Scandinavian countries. He loves long term predictions, perhaps because he stumbles when trying to deal with the next few months. The brand new budget for 2013 will have to be readjusted because of the Hungarian government’s ill-advised purchase of E.ON. It is almost certain that new taxes will be levied either on businesses or on consumers in order to balance the books. And new taxes will put further pressure on growth. I may also add to that bad news another growth killer: the cost of agricultural products grew by 18.1%  in December year on year and by 15.4% during 2012. All in all,  Hungary has had the worst performing economy in the whole region in the last three years.

Yet Viktor Orbán goes on with his success stories. Every Friday morning we learn that all is in order. This time the story is that “five indicators in the Hungarian economy are all right; there is only one which is not and that is growth.” Naturally, receiving relatively high amounts of money per capita from the European Union is also a sign of Viktor Orbán’s political genius. As he repeats time and again, after Latvia Hungary received the most money per capita. But that is not something one ought to be proud of. It actually means that, after Latvia, Hungary is the country in which the economic problems are the greatest within the European Union.

It is hard to know when Fidesz supporters will realize that something is very wrong with the economic policy of the Orbán government. Even conservative economists, including Zsigmond Járai and László Csaba, are critical of György Matolcsy, and yet it doesn’t look as if Orbán is planning to get rid of him although naturally MSZP is demanding his resignation. At least Orbán announced this morning that he doesn’t plan any changes in his cabinet. But almost everybody is convinced that Matolcsy will be appointed the next governor of the Hungarian National Bank and that Mihály Varga, until now minister in charge of the nonexistent negotiations with the IMF, will replace him. Skeptics claim that nothing will change even if Varga takes over because the orders come from the prime minister, who seems to be an economic illiterate.

On the level of undersecretaries, on the other hand, there were changes in the last few days. Zoltán Balog decided to get rid of some people who were giving him headaches one way or the other. He dismissed László L. Simon, undersecretary for cultural affairs, admitting that he couldn’t work with the man. Rózsa Hoffmann was demoted, although my feeling is that Balog wouldn’t have minded parting with her. According to rumors Orbán saved Hoffmann’s skin, most likely not because of his personal feelings for this schoolmarm but because her dismissal would have created trouble between himself and his loyal supporters in the Christian Democratic parliamentary caucus. So, she relinquished all duties connected to higher education; she will be in charge only of elementary and high school education.

Orbán and Balog decided to pick István Klinghammer, former president of ELTE, to replace her because they were hoping that he would, because of his experience with university students, be able to find the right tone in negotiating with the rebellious students. However, I very much doubt that Klinghammer’s dictatorial style and his apparent disdain of the students will endear him to this bright young crowd. Because of his age (72) he spent almost his whole life in the Rákosi and the Kádár regimes, and his educational philosophy seems to reflect those days when Hungarian universities were no more than extensions of high schools. Hoffmann is seven years younger than Klinghammer, but she is also of that generation. These people reject anything considered to be progressive educational thinking. Klinghammer thinks that there are far too many young people going to the university and that they study Mickey Mouse subjects. He was against the Bologna system (B.A., M.A., Ph.D. sequence) and I’d bet that, if he could, he would return Hungarian higher education to those good old days when, in his and Hoffmann’s opinion, Hungarian education was the best in the world.

And while we are on the subject of education and Zoltán Balog’s ministry, let me touch on something that made my blood boil this morning when I read the report about what happened in an elementary school in Balatonfüred that had been taken over by the Hungarian Reformed Church. Let’s keep in mind that Zoltán Balog is a Hungarian Reformed minister. According to the article, two teachers were dismissed from the school because “they did not pray with sufficient devotion.” Mind you, the Hungarian Reformed Church promised at the time of the takeover of the school that there would be no discrimination on the basis of religious affiliation. Now, however, the Hungarian Reformed minister in Balatonfüred referred those who complained about the dismissal to §44 of the Hungarian Reformed Public Education Law that makes it a teacher’s duty to help the students become committed members of their church and country. In addition, the students should become believers. When the parents wanted to know what the two teachers had done wrong, they were told that “they behaved strangely.”

Devotion

The officials of the Hungarian Reformed Church obviously lied when they promised religion-neutral education to all children. And the naive parents didn’t read the Hungarian Reformed Public Education Law. All this while the school is entirely financed by the Hungarian state. On all the taxpayers’ money, including the atheists’.

At least before the nationalization of schools in 1948 parochial schools were maintained by the churches and by tuition fees. Then it was crystal clear that in a parochial school there would be a large dose of religious indoctrination in addition to the compulsory subjects. In theory children of “other faiths” were left alone. They didn’t have to attend church services or the religious instruction offered in school. But in the school I had to attend out of necessity for two years the nuns made it quite clear that non-Catholics were simply tolerated and handled differently from the Catholics, who were in the great majority.

Churches certainly can have their own schools, but they should also finance them. Parents who think that their children would benefit from attending parochial school should pay for the privilege. And before parents are misled, as it seems the parents of this elementary school in Balatonfüred were, they should read all the paragraphs of the parochial schools’ public education laws. Very carefully. In this case, I’d bet a good number would change their minds.