Postponing the new regime defense law may not only be for communication reasons

Máté Kocsis, leader of the ruling Fidesz parliamentary group, announced that parliament will postpone the debate on the draft of the new regime defense law, the so-called “Bill on the Transparency of Public Life”, until autumn. The law primarily targets independent media and civil society organizations. The goal of Fidesz is not only to ensure that this issue dominates political discourse until autumn and that the threat continues to loom over these organizations. Another reason for the postponement is that the bill poses serious economic and political risks for the country and the government.

• Of all the risks, economic risk is the most important. Financial and economic stakeholders criticized the bill, partly in public. If passed in its current form, it would create serious legal uncertainty and make it impossible for banks to comply. It could also lead to credit rating downgrades and cause people to withdraw their savings from the country.
• Adopting the bill would further restrict the government's foreign policy leeway. Critics of the Orbán government within the European Union would become more active, and the group of governments supporting the Article 7 procedure and further financial sanctions would grow even larger.
• The bill has failed to achieve its main political objective so far. The goal was to draw Péter Magyar and his TISZA party into Fidesz's trap, blurring him with the "left-liberal" opposition and forcing him into symbolic battles orchestrated by Fidesz. However, Magyar did not join the chorus of protesters but rather continued on his own path. Furthermore, the bill did not cause hysteria among those affected. Contrary to the government's expectations, the liberals did not scream. Media outlets and civil society organizations under attack protested calmly yet firmly. Their protest went beyond the traditional "liberal" camp, and they gained considerable support. Popular artists and musicians stood up for them, and even two of the three major historic Christian churches wanted to issue a joint protest statement. The European Commission also commented on the draft law in a measured but firm manner, calling for its withdrawal. Contrary to the government's claims, it became clear that the organizations they wanted to destroy had significant social support. The credibility of the government's rhetoric was further undermined by the fact that, despite questioning foreign funding, the government wanted to take tax donations offered by Hungarian citizens from the targeted organizations.
• Public support is in question. According to a public opinion poll commissioned by Partizan and conducted by the 21 Research Center, the majority of Hungarian society does not support the Russian-style bill that would label organizations winning foreign tenders or EU grants in a transparent manner as foreign agents. Even among Fidesz voters, the bill did not receive unanimous support (49% fully agreed, 25% somewhat agreed, and 22% were undecided).
• There were also doubts about the enforceability of the bill. Máté Kocsis, also referring to external criticism, said: "The [Fidesz] group is united in the view that legal means must be used to protect sovereignty. However, there is disagreement on what these instruments should be." He added that the Hungarian Banking Association, the Hungarian Advertising Association, the President of the Republic, the Hungarian Bar Association, and the Hungarian Newspaper Publishers had submitted proposals for the draft law. The government-organized online media outlet PestiSrácok commented on the postponement of the law, stating, "The method described in the transparency law package was terribly grotesque and easy to challenge. Moreover, it would have imposed many tasks on the 'notoriously nationally committed' state administration, the tax authority, the police, banking supervision, and the 'nationally controlled' banking system itself..." Although Orbán announced in January that there would be an 'Easter clean-up,' which was probably an internal message indicating that he would allow time until Easter for codification, they still failed to meet the deadline. The proposal was not ready until May, and even then, it was not of sufficient quality. Now, the government is giving itself more time.
• In justifying the postponement, Fidesz revealed the law's true purpose. The mention of internal criticism is particularly interesting because, until now, everyone in the government wondered why targeted organizations were bothered by the bill, given that it only concerns transparency. However, the reasons for the postponement make it clear that the bill is not actually about transparency. Rather, the bill is about protecting government arbitrariness and ensuring that power remains unrestricted and beyond control or criticism. Passing the bill would have significantly escalated the repressive nature of the political system and may have provoked resistance from the state apparatus or certain actors in the banking system.

If Fidesz truly intended to protect Hungary's sovereignty, it would take action against the state-organized political, economic, and informational influence efforts of authoritarian countries outside our alliance system rather than against domestic actors who stand on the ground of democratic values. To this end, we recommend Political Capital's 21-point package of proposals for a genuine protection of Hungary's sovereignty.