Hungarian government amends law to reach agreement with the European Commission on Erasmus ban

Read the original in Hungarian here.

The Hungarian government is set to amend legislation governing public interest asset management foundations (kekva) in an effort to resolve disputes with the European Commission regarding Hungary’s university model change. These foundations manage higher education institutions and are responsible for utilizing EU funds. A key aspect of the amendments involves clarifying conflict-of-interest rules for board members, which the European Commission has demanded since 2022. However, based on the current draft of the law, which has been put forward for public consultation, there is no guarantee that Hungarian students will be readmitted to Erasmus and researchers to Horizon Europe programs.

Just over a week ago, Balázs Hankó, Hungary's Minister for Innovation, stated after an informal meeting of EU education and research ministers in Budapest that the Hungarian government had submitted a document to the European Commission nine months ago. This document addressed concerns over scientific freedom and transparency—issues that led to a funding freeze by the EU. Hungarian researchers and students are still waiting for clarity on why they were excluded from these programs, Hankó said. "We have decided not to wait for Brussels' response any longer," he added during a press conference.

“We will submit our proposal to Parliament. We hope this will break the silence and resolve the situation,” said the minister. However, Hankó’s statements were not covered by Hungary’s national news agency MTI, with only Business Science reporting on the matter.

Hankó also expressed frustration that Marc Lemaître, the EU's Director-General for Research and Innovation, did not attend the press conference after the meeting. He viewed this as a reflection of the ongoing funding dispute. “It is clear that cooperating with the Commission is not easy,” Hankó remarked.

In line with the minister’s earlier promise, stricter conflict-of-interest rules for the board members of kekva foundations have now been put forward for public consultation.

The root of the dispute

The dispute dates back to late 2022, when the European Commission excluded more than 30 Hungarian institutions, including 21 universities, from the Horizon Europe and Erasmus+ programmes. The Commission cited concerns that the Hungarian government's reforms were undermining academic freedom and transparency. Key issues included the indefinite reappointment of board members, excessively long terms of office and the failure to exclude politicians from foundation boards.

For almost a year, the European Commission has insisted that board members should be reappointed only once and should not hold political office. There should also be a two-year cooling-off period before former politicians can join these boards. The Commission also demanded that board terms be limited to a maximum of four years. These requirements were communicated several times to Tibor Navracsics, the former Hungarian minister in charge of the 2023 negotiations.

Despite the Commission's feedback, the current draft legislation still falls short of the EU's expectations.

Key changes and remaining differences

The draft law now under consultation introduces several changes, but these only apply to kekva foundations that manage EU funds. The bill sets six-year term limits for board members and allows reappointment only once, in line with EU demands.

Additionally, the new rules would prohibit certain high-level political figures—such as Members of Parliament, mayors, and government officials—from serving on foundation boards, which goes beyond the Commission's original expectations. This measure is intended to ensure the independence of foundation leaders from political influence.

In a second step, members of the Foundation's Board will be required to submit declarations of assets at the beginning and end of their term of office. These will be monitored by independent auditors and the Integrity Agency will monitor the use of EU funds in relation to the declarations.

One key issue that the European Commission has previously raised is the lack of transparency in the selection process for foundation board members. Last year, the Hungarian government proposed that new members be selected through invitations, with the State Audit Office (ÁSZ) tasked with overseeing the process. In the current proposal, the ÁSZ would be responsible for verifying that appointees meet conflict-of-interest and independence standards.

However, Brussels has previously rejected the role of the ÁSZ as an acceptable supervisory body.

Isolation of Hungarian scientists

As negotiations stalled, Hungarian researchers have become increasingly isolated. In August, the Hungarian Young Academy warned that the exclusion from EU programs could damage the reputation of Hungarian science. While Hungarian academics are still allowed to participate in Horizon Europe projects, they must find alternative funding sources to replace the EU grants they can no longer access.

In an effort to counter the exclusion, the Hungarian government launched domestic alternatives such as the HU-rizon and Pannónia Scholarship programs, designed to support researchers at excluded institutions. However, these initiatives have attracted only a limited number of applicants, failing to serve as viable alternatives.