CEU's departure from Budapest unlikely to lead to direct negative consequences

HUNGARY - In Brief 04 Dec 2018 by Istvan Racz

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The Central European University (CEU) announced yesterday that it would move from Budapest to Vienna early next year, as the government had failed to sign an agreement with the State of New York, which would be legally required for CEU to have an operating license in Hungary from January 2019. As the reader may recall, CEU is a small but high-profile university founded and backed by George Soros, essentially with the aim of educating primarily Central and East European students to become future leaders in politics and public administration. As PM Orbán and some of his Eastern allies generally do not like independent institutions and initiatives, and as Mr. Soros has become a public enemy No1 for the government in recent times, Mr. Orbán pushed through a legal amendment in parliament in 2017, which tightened operational requirements for foreign universities in Hungary, apparently with the aim of squeezing CEU out of the country.This story is important for investors, as it was attributed great political significance by the EU and its member states, the European People's Party (Fidesz' party family in the European Parliament) and the US government. In late 2017, the EU Commission took Hungary's amended parliamentary act for higher education to the European Court, claiming that it ran against European law. A few months ago, a new US ambassador to Budapest hasted to signal that a key part of his mandate was to sort out the problem so that CEU could eventually stay in Budapest. And about two months ago, the head of the EPP's parliamentary faction said that he saw the CEU case as the 'red line' for Fidesz, crossing which should lead to the party's expulsion from the EPP (whic...