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.
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.