The shift in governance models for Hungarian universities


The example of how the University of Theatre and Film Arts in Budapest has had its governance model recently transformed can help us understand the nature of the changes now underway that are reaching into the depths of the Hungarian societal structure.

The main building of the Corvinus University of Budapest
Teaser Image Caption
The main building of the Corvinus University of Budapest.

The Fidesz-KDNP government has been attempting to restructure public education, including tertiary education, since they secured a two-thirds supermajority in the National Assembly in 2010. These attempts fit into a longer-term process that has been determinative since the change of regimes in 1989 and that aims to decrease state involvement in the provision of compulsory education and (most importantly) with higher education.

In Hungary, the state funds for public education have been continuously reduced since 2006. Accordingly, the performance of Hungarian students in international tests has been regularly measured as falling below that of other OECD member states; moreover, Hungary comes in last among the CEE countries in this regard. The reason for this is clear: Hungarian public education is extremely unequal, and this characteristic is only intensified by the fact that since 2011, the age limit for compulsory schooling has been lowered to 16 years. Underprivileged children or those living under particularly poor financial circumstances can only access higher education by means of exceptional determination; if they have to work in addition to studying, that increases the risk of their dropping out.

The Fidesz-KDNP government first attempted the transformation of the higher education system in 2011-2012 when they introduced the new position of chancellors at universities as part of those reforms, a move that was largely perceived as violating university autonomy because the chancellors are appointed by the prime minister and solely entrusted with the financial management of these institutions. Requirements for university admission were simultaneously raised and the students attending state-funded courses were required to sign contracts obliging them to pay back their tuition fees to the state if they did not finish their studies. These measures were followed by the significant downsizing of university personnel: A large number of professors in part-time positions or of retirement age were forced to leave their jobs. 

Although the government also attempted to introduce a compulsory tuition fee at universities, those plans were eventually dropped after students organized several successful protests between 2012-2013 and occupied university buildings both in Budapest and in Pécs.

The recent past has seen sequential attacks against the university and academic sphere. In 2017 a law targeting the Central European University (“Lex CEU”) was passed in the National Assembly, resulting in CEU moving most of their activities to Vienna; in 2019, research institutes were detached from the Hungarian Academy of Sciences and became independent. Both of these cases continuously involved smear campaigns against intellectuals, especially those in the humanities. More drastic restructuring of higher education started in 2019-2020.

The financial remodelling of the higher education system may be just one part of the much broader remodelling attempt that involves the entire society, but the ‘shift of university governance models’ is a core move in this process. Since students and professors of the University of Theatre and Film Arts (SZFE) were the ones who have stood up against these developments in the most organized manner, and because that university was pressured the most by the government, through its example we can better comprehend the nature of the ongoing changes that are affecting Hungarian society to its core.

Corvinus University in Budapest first became the model for the entire restructuring of the university system when it was transformed from a state-funded institution into one that is maintained by a non-profit foundation in 2019. Through this change, the foundation now controls the funding of the university, its operations, and maintains the rights of the university, with a five-member board of trustees making all decisions. Corvinus University finances have since then become, to a greater extent, the responsibility of the Hungarian Oil and Gas Public Limited Company (MOL) instead of the state.

In this case, the state has managed to “kill two birds with one stone”: on the one hand, it has stepped away from directly funding the university, while on the other hand, it has endowed the university with formerly publicly-held assets. In 2011, the Hungarian state repurchased MOL stocks held by Russian investors and became a shareholder again. The state then gifted those stocks to the foundation managing Corvinus University, which now owns them and the value they accrue (or lose). Most of the university’s budget currently comes from the yields on both this investment and from the Richter stocks gifted to the university.­­­­­­­

The state has therefore withdrawn both from a direct financial commitment to the university and from its involvement as an MOL shareholder—and in the case of the latter, it has permanently withdrawn: in the course of 2021, the rest of the MOL shares owned by the state were gifted to a different public benefit foundation. As a consequence of this shift in its financial model, the university has been forced to establish ties with these market actors and to consider market demands. In the case of Corvinus University, another consequence was the decision to merge its different doctoral schools together, which was called ‘rationalization’.

It is important to emphasize that even though the state has now exempted itself from direct involvement in financially supporting the university, the board of trustees of the university has been filled with members close to the government, such as the managing director of the MOL Group, a former Foreign Affairs Minister, or an official from the Innovation and Technology Ministry, which is responsible for developing the new financial model for Hungarian universities.

This shift in financial and governance models is therefore a marriage between the commercialization of higher education and the recapitalization’ of specific circles close to the government – with the state itself losing assets as a result. University property used to be state-owned, but this wealth (including dormitories, buildings, research institutes, etc.) has now been given to these foundations along with the right to establish and maintain the university, which means that the five members of the board of trustees are now the ones empowered to make all decisions about financial management. The board could decide to sell its assets and the foundation it controls would reap the benefits.

The same procedure has been applied in the case of the University of Theatre and Film Arts in Budapest (an institution with a 150-year-long history, providing a variety of academic courses), but that university was not provided with a supporter like the MOL Group. The idea of restructuring the university under a foundation first came up in 2020, with the reasoning that the university was functioning under “unsettled conditions”—the upcoming nomination of a new rector was postponed after harassment accusations were made against the actor Péter Gothár, a professor there who is regarded as a “left-liberal” figure. Fidesz has been fostering the idea that Hungary is involved in a “culture war” and that the “left-liberal intelligentsia” has “occupied” cultural institutions which are now allegedly being operated under this ideology. The government exploited Gothár’s otherwise unrelated scandal to justify governance and management changes at the university.

Although the senate responsible for managing the university and its programmes would not necessarily have stood in the way of such changes (even though the senate claimed the changes were undeveloped and hasty), from the statements of the Innovations and Technology Ministry, from other members of the government, and from the fierce attacks published in pro-government media, it was clear that the preference among the state administration was to change the leadership of the university completely. Eventually, from 1 September 2020—after the governance model shift had been done in a surprisingly swift manner involving the clear dominance of those with government affiliations—the chancellor of the university was replaced, the senate resigned, and so did more than 30 of the professors and teachers who had been working under uncertain conditions.

The management of the university has since been taken over by a non-profit trust chaired by Attila Vidnyánszky, the director of the National Theatre. Many of the new appointees to the university’s board of trustees and supervisory board have nothing to do with theatre or the film arts, while the position of chancellor has been assigned to Gábor Szarka, a former army colonel who acted the most sternly when protesters occupied the university to express their disagreement with the change of its governance model. The board of trustees replaced the senate of the university, and pro-government actors and TV journalists arrived to fill the places of the professors who quit.

The shift in management was unanimously rejected both by the Student Union and by the students generally. According to them, the university has lost its autonomy under this new board of trustees, and prior to the shift there were no satisfactory communications undertaken between the management and those affected by the change. Students have also objected to the abolition of public servant status for university workers, which has put such workers in a more vulnerable position.

Students of the university and their professors organized several protest and awareness-raising actions from August 2020 onwards. On 1 September, students of SZFE occupied the university building, and on 6 September they organized a demonstration in Budapest with the participation of several thousand people. The cause was reported on by media worldwide, and many film directors, actors, civil society organizations and other supporters stood by the SZFE students. During the occupation the students organized themselves democratically and had to endure oppression by the new management. The new chancellor turned the Internet access off in the occupied building, ordered the “disinfection” of the entire university due to the pandemic, withheld the payment of students’ stipends, and threatened to cancel the semester. Media close to the government published several discrediting articles about the protest during the 70-day occupation, which ended on 9 November 2020, when attendance of university lectures in person was banned due to restrictions being tightened during the second wave of the pandemic.

In the months that followed, the new management of the university renamed the institutes of the SZFE and chose new directors for them who are close to the government; the departments have been moved into separate buildings; the scene of the student occupation, the cult-status Ódry Stage that had been in operation since 1959 was closed down; and the university building on Vas Street where the stage was housed is slated for restitution to the Reformed Church.

Passers-by today see nothing at all to remind them of the autumn occupation. The only references to those events are a few old posters still up at some of the bars in central Budapest’s “ruins” that are frequented by liberal-progressive youth, and maybe one can still spot some people wearing facemasks with “Free SZFE” logos on them.

The government has announced there will be large-scale developments at the university, leaving no question about whether the SZFE case is a political one. Board chair Vidnyánszky had already stated in August 2020 that prior to the management change, the “teachings at the university [were] aligned solely with liberal-left ideas, and those who say there’s no ideological influence in them are lying.” According to him, the student protests that took place were “just the raging of a bunch of people”.

Máté Gáspár, a former professor at SZFE, comments on these events as follows: “The restructuring process can be briefly summarized like this: While previously the university used to have management, after the governance model change, an untransparent, never-justified leadership got to have a university.” Philosopher Gáspár Miklós Tamás thinks “the governance model change is just one step towards the deep state, when institutions lose all their rights to independence, self-regulation and self-governance.”

The governance model shift did not stop with the SZFE. In January 2021, the Innovation and Technology Ministry published rather brief plans to change the governance model of the universities outside the capital. The process was pushed through in an extremely rushed manner, without any consultations, against the will of students, professors and university workers, and following scandalous senate meetings held in the middle of the third wave of the pandemic. The government’s standpoint was that because of the new financial and governance model, these universities will gain easier access to the EUR 1 500 million in EU recovery funds designated for Hungarian higher education, resulting in a more competitive higher education system nationally.

The newly-assigned board members of these universities include leaders of state enterprises or businesses with close ties to the government (such as the OTP bank, the Hungarian National Bank, or Audi), and in several cases even members of the government (e.g. Justice Minister Judit Varga, Family and Youth Affairs official Katalin Novák, or MP János Lázár). In each case, the university workers lose their public servant status, and the universities can expect some not so “competitive” departments and institutes to be merged. Because the financial and governance model shift means the privatization of previously public universities, there is no obstacle to defining their political affiliations, either.

The introduction of this new “foundation model” for managing universities has not stopped at their campuses, though. The government is continuously creating new “public benefit corporations performing tasks in the public interest”. At this point there are 32 of them, and besides universities, they include some trusts managing energy and public utility companies, others responsible for controlling the basic structure of the state, and others created to take over the management of art institutions, agriculture and land development, and other fields.

These public benefit corporations are being given a significant share of previously publicly-owned assets which in turn, following a recent amendment to the Constitution, lose their nature as property of the state. Because the Constitution (now called The Fundamental Law of Hungary) defines these public benefit corporations as playing a pivotal role, these changes can only be reversed with a two-thirds supermajority vote by the National Assembly. Therefore, even if the democratic opposition manages to change the government in the upcoming elections in 2022, their room to act on this issue will be quite limited.

/Co-editing and proofreading by Gwendolyn Albert/