Hungary’s relaunch of ‘Golden Visa’ programme is anti-establishment posturing gone too far

Fidesz continues to pursue a foreign policy agenda borne out of spite and hubris as opposed to one that is rooted in pragmatism or driven by national interest.

Last week, Hungarian Prime Minister Viktor Orbán personally signed off on a bill to relaunch his country’s scandal-ridden ‘Golden Visa’ programme, a scheme granting renewable 10-year residence permits to “strategically important guest investors” who plough at least 250,000 euros into a real estate fund, 500,000 euros into private property or make a one million euros donation to a public trust.

Besides being entirely at odds with the anti-immigration, ultra-nationalist ticket Orbán’s demagogic administration has long campaigned on, this move comes at a time when Brussels is actively weeding out the commoditisation of passports and right of abode by existing EU member states as well as candidate countries.

Hungary’s original residence-by-investment (RBI) programme was scrapped six years ago after lax screening paved the way for thousands of unsavoury figures—predominantly from Russia and China—to cement a foothold in the heart of Europe and potentially carry out nefarious activities such as money laundering, tax evasion, drug trafficking and espionage.

There is no reason to believe that the clientele drawn by the new scheme will be any different, given Budapest’s increasingly cosy ties with Moscow, Beijing and other regimes at ideological loggerheads with the collective West.

A useful idiot

The global investment migration industry, worth around four billion US dollars, remains somewhat laser-focused on emerging Europe, not least since there is a widespread belief among prominent lobbyists that the region’s governments are more corruptible and susceptible to influence-peddling than those of legacy Western nations.

Sadly, this line of reasoning does hold water with countries including Latvia, Bulgaria, Montenegro, North Macedonia and Moldova—all having previously dipped their toes in expedited pathways to citizenship or long-term residency for high-net-worth, third-country applicants.

Even Albania’s Prime Minister Edi Rama made no bones about his receptivity to join the club during the 2019 Henley and Partners Global Citizenship Conference in London, where he participated as the chief guest speaker.

Stalwarts of the lucrative yet highly controversial cash-for-passport racket routinely depict this endeavour as a virtuous movement intended to help those dealt a poor hand at birth overcome cross-border mobility constraints and switch allegiances. By becoming the latest jurisdiction to throw its hat into the ring and essentially swim against the tide, Hungary has emerged as something of a useful idiot for immigration consultants and marketing agents struggling to justify their relevance amid a cascade of recent programme closures.

The European Commission has, for the most part, successfully managed to strong-arm the aforementioned countries as well as the Mediterranean trio of Greece, Portugal and Spain, into phasing out the practice.

That said, Hungary’s proclivity for playing spoiler and muddying the waters at every turn means it will almost certainly go ahead with plans to rope in so-called “sovereign equity” from the Global South. Its contrarian position on virtually all matters of significance is down to a “moral hazard” of sorts prevalent at state level. Alternatively put, there are no major repercussions for going rogue given the absence of any legal mechanism to boot non-complaint member states from the EU.

Both Viktor Orbán and Foreign Minister Péter Szijjártó are therefore quite content to keep Budapest’s parasitic relationship with Brussels running on cruise control despite incessantly denigrating the failed neoliberal policies of their Western European counterparts. The time has come for senior EU officials to go for the jugular and hit Hungary where it hurts rather than resorting to petty punitive measures—namely freezing billions worth of cohesion funds—which risk thrusting the Hungarians further into the Kremlin-CCP orbit.

On thin ice

One such option that could prove far-reaching and bring about a wholesale change in behaviour is invoking the EU’s Article 26 and kicking Hungary out of the Schengen treaty. It is worth recalling that Greece was threatened with a similarly drastic course of action at the height of the 2015 Refugee Crisis for not doing enough to tackle irregular migration.

A ruling of this kind will greatly undermine the appeal of Hungary’s touted Golden Visa, seeing as freedom of movement is its biggest selling point. Moreover, Hungarian overseas diplomatic missions are likely to see demand for short-stay visas take a hit and consular fees dry up if recipients are no longer granted access to other parts of the bloc on a one-stop basis.

Schengen-bound Russians, in particular, will cease looking to Hungary as a viable workaround for circumventing the bureaucratic hurdles and blanket bans they now face. Should a de facto downgrading of Hungary’s status within the EU come to pass in the form of expulsion from the borderless travel zone, its firebrand leader will have a lot to answer for back home and find himself on thin ice with the general populace.

Pour encourager les autres

If anything is to be gleaned from the ongoing conflict in Gaza, it is that being beholden to Vladimir Putin and supportive of Israel at the same time are, in a sense, mutually exclusive.

The fact that Hungary’s top brass has been fairly tight-lipped on the barbarism committed by Hamas when, under normal circumstances, they would have jumped at the opportunity to indulge in sensationalist fear-mongering and sound the alarm over scores of jihadists from the Levant infiltrating mainland Europe is a case in point.

The post-war energy insecurity Europe is grappling with has prompted the Hungarian government to reverse its overtly hostile stance towards migrants from Islamic backgrounds while ramping up diplomatic engagement with the Organisation of Turkic States (OTC) and the Gulf Cooperation Council (GCC) – many of whose constituents are either directly or indirectly underwriting Russia’s full-scale invasion of Ukraine.

Meanwhile, the resumption of Hungary’s Golden Visa programme sends a loud and clear message to prospective takers: so long as Middle Easterners or Central Asians show up with deep pockets and blank cheques, Orbán is more than happy to let his alleged “defence of Christianity” take a back seat.

The European Union must do everything within its power to ensure that this venture does not get off the ground. Although the Hungarian authorities will try and dress it up as being above-board and simply a means of attracting much-needed foreign direct investment to state coffers, history has shown time and again that the capital injection generated from attaching a steep price tag to residence cards or fast-track naturalisation is more than offset by the untold social and governmental problems such an undertaking gives rise to.

This includes grift, uncontrolled inflation, organised crime and even the assassination of investigative journalists like Daphne Caruana Galizia in Malta. The bottom line is that nothing good can come from harbouring individuals with the wrong intentions who, in many instances, pose a grave threat to national security.

Worse still, the rolling out of this initiative might encourage others, such as Serbian President Aleksandar Vučić and Georgian Prime Minister Irakli Garibashvili to follow in Hungary’s footsteps and profit handsomely from the extent to which their economies have already been hijacked by an influx of disaffected Russians.

Bringing Orbán to heel for refusing to play ball in regards to LGBT+ rights, press freedom, rule of law, financial support for Ukraine and establishing a sense of belonging in the EU on meritocratic, as opposed to monetary, grounds should henceforth be Brussels’ top priority.

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