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Like Armed Conflict, Ideological War Comes at a Cost

George Soros

Back in 2001, George Soros, the Hungarian-born U.S. financier-philanthropist, was in town for the Central European University’s graduation ceremony. The CEU was then scattered in various buildings across the city, and the event was held in the Vígszínház – the Gaiety Theater.

After congratulating every graduate in person when awarding their degrees, Soros announced he was donating USD 400 million to a newly created endowment fund to support the CEU – enabling the university to operate independent of himself.

A speech or two later, and the media were invited to ask questions. In a somewhat mischievous mood, yours truly stuck up a hand, commenting that whenever a foreign investor brought so much as USD 10 mln into the country, a state-secretary would attend the event: it took USD 50 mln to attract a minister.

Yet here Soros was handing over eight times the latter sum, with not a single government official on stage.

“Mr. Soros, I don’t understand: how could this be?” I enquired innocently.

Before the financier could utter a word, Yehuda Elkana, the CEU rector, jumped up to interject: “It’s not because we didn’t invite them!”

Acrimony Detectable

I was, of course, impishly drawing attention to the bizarre acrimony already detectable between the Viktor Orbán in his first premiership, and Soros. Why bizarre? Well, Soros had both supported Fidesz in its formative, cash-strapped years of the communist 1980s, and granted the youthful Orbán a scholarship to study at Oxford.

But more importantly for Hungary in 2001, the economic contribution of the CEU had to be palpable: its many foreign professors paid taxes, rented homes and ate in Budapest; its many conferences attracted visiting speakers who stayed in hotels, flew with local airlines, hired taxis to get around. Not least, the CEU employed a small army of local hires in services.

I was reminded of this incident this week with news that the Open Society Foundations, a Soros-founded institution created to help civil society develop in Hungary and the region, was moving its international operations from Budapest to Berlin.

Leaving aside the arguments (the OSF cited “an increasingly repressive political and legal environment in Hungary”; the government accuses the OSF of “wanting to create an immigrant continent and country”) the decision comes with a direct economic cost. It means the loss of 170 jobs (including support staff) in Budapest, Csaba Csontos, OSF spokesperson told the Budapest Business Journal.  

Of course, if any organization is illicitly working against a democratically elected government (which is, essentially, the charge against the OSF from Kossuth tér) that government is correct to enact counter measures. In the case of the OSF, most outside observers find the accusations an extreme interpretation at best.

The next target on the anti-Soros government agenda could well be the Central European University, which says it has been left in limbo for nine months after complying with the latest government legal requirements.

The CEU says that today it pays more than HUF 7 billion (USD 26 mln) annually into Hungarian state coffers (in taxes, social security contributions, plus payments to Hungarian suppliers) and currently employs some 520 Hungarians full-time. Regardless of the international controversy involved, hounding the CEU out of the country on ideological grounds will come at a cost: the government – which invariably shouts loud every time it signs a new investment contract – should think about that.