Goulash: Unexpected reactions to Trump’s win; Orbán allies plot major deals

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ORBÁN AND THE ECONOMY: A TOOL FOR STAYING IN POWER

Hungarian Prime Minister Viktor Orbán may have spent decades accumulating a treasure trove of economic wisdom, but his approach still comes with some, let’s say, interesting gaps. Now he’s taken on the role of chief architect of Hungary’s economy, crafting a system with so little room for feedback that it’s nearly impossible for anyone to suggest he might be heading down the wrong path. Recent economic figures — such as recession instead of GDP growth, a weak Hungarian currency, and the underperformance of industrial production — all look like flashing red lights. This final installment in Direkt36’s series (authored by András Szabó, Patrik Galavits and András Pethő) on the Hungarian economy gives you an exclusive behind-the-scenes look at Orbán’s economic playbook — plus, don’t miss the episode where he muses about conspiring with Germany and reviving one of Adolf Hitler’s old plans (this last sentence is clickbait, but also a real thing that happened).

POLISH JUDGE’S NEW MISSION: KREMLIN PROPAGANDA FROM BELARUS

Tomasz Szmydt, a former high-ranking Polish judge, made quite the career pivot in May, fleeing to Belarus and cozying up to President Aleksandr Lukashenko’s regime by applying for asylum. Once entrusted with access to classified EU and NATO materials, Szmydt has now taken on a new mission: he’s founded the Prawda Polska Foundation (Polish Truth Foundation) in Minsk, aiming to “strengthen ties” between Russia, Belarus, and other Slavic nations. In other words, he’s rolling out the red carpet for the Kremlin’s agenda, all under the guise of Slavic unity. Because, of course, nothing says “Polish truth” quite like settling down in Minsk and advancing Russian interests. Adéla Gajdicová from Investigace.cz presents this remarkable story of treason in vivid detail.

SPICY SCOOPS

There is always a lot of information that we hear and find interesting and newsworthy but don’t publish as part of our investigative reporting — and share instead in this newsletter. 

BALTIC, CENTRAL EUROPE SECURITY FOLKS CAUTIOUSLY HOPEFUL ABOUT TRUMP

On the eve of the U.S. election and after, I traveled through the Baltics and Central Eastern Europe, speaking with foreign policy and national security experts, including government officials. (We’ve also published an investigation into Russian military bases threatening this region, in case you missed it.) What I heard from them was both unanimous and surprising. First, all of my contacts — all of whom are involved in foreign policy, defense and security — emphasized, both before and after the election, just how weak they perceived the Biden administration, particularly National Security Adviser Jake Sullivan. They attributed this to what they saw as a risk-averse approach to Ukraine, focusing more on managing escalation risks (for instance, by limiting Ukraine’s use of long-range weapons) than on fully equipping Ukraine for a decisive victory. 

As a former high-ranking Baltic military officer put it: “The human rights industrial complex is out; the military-industrial complex is back.” Second, despite Trump’s pro-Russian and anti-Ukrainian rhetoric, everyone was cautiously optimistic after his win. As a former head of a Baltic country’s security agency put it, “If Putin refuses to negotiate a peace deal—and he won’t agree to one—I expect Trump to provide Ukraine with everything it needs to win. Unlike Obama or Biden, Trump is at least willing to apply real force. A narcissist like him has to claim victory everywhere. Ukraine may have to sacrifice some territories, but Trump will find a way to come out on top against Russia.” The source also added that Trump’s presidency will certainly push Europe to increase both defense spending and arms production, including ammunition supplies for Ukraine.

“We’re not panicking here; we’ve been preparing for this scenario,” one Visegrád country’s high-ranking government official told me. “There’s a chance for a qualitative shift—hopefully a positive one—with this new administration. Biden and Harris wouldn’t have been able to deliver it, as they’ve followed the same unchanging modus operandi, which hasn’t met Ukraine’s expectations and needs,” the official added, noting that their government is “quite satisfied,” particularly with the appointments of Mike Waltz as national security adviser and Marco Rubio as secretary of state. Regarding Central Europe’s best strategy to win over Trump, the official emphasized that the region must — and will — increase defense spending even further, including the purchase of U.S. arms such as F-35s, helicopters, and anti-air defense systems — and American LNG. “We need to demonstrate to Trump that we want to do more, and that we see Russian aggression and the defense of Ukraine as primarily a European responsibility.” However, most of my contacts’ optimism was based on their past experiences with the Bush and first Trump administrations. When I asked about the possibility of restricting intelligence sharing with the U.S., this idea was quickly dismissed. That said, my conversations took place before picking pro-Kremlin Tulsi Gabbard as Director of National Intelligence—an appointment that some of my contacts still hope won’t be approved by the Senate. (You can read a less optimistic take in what to expect from Trump from our Emily Tamkin here.)

THE HIDDEN REASON HUNGARY IS CELEBRATING TRUMP’S SUCCESS

It’s no surprise that Orbán, the first leader in office to endorse Trump back in 2016, is over the moon after the US election. His government openly anticipates a “free pass” from the U.S. — expecting a loosening of criticism for crackdowns on rule of law, press freedom, and LGBTQ rights. However, several government-connected sources and foreign diplomats in contact with Hungarian officials revealed a deeper, more strategic motive hiding in plain sight. Orbán hinted at this by saying he would delay Hungary’s 2025 budget submission until after the US election, with two budget versions prepared depending on the outcome. Following Trump’s win, the draft was promptly submitted to parliament, and foreign minister Péter Szijjártó clarified the difference: “Next year [Trump] can bring peace back to Europe,” he said, adding that “peace will obviously open up very different economic opportunities,” since “wartime limits economic opportunities due to defense and weapons spending.”

That’s the real point. Informally, government sources bluntly acknowledge that Hungary, with its economy in recession and a bare economic cupboard, is eyeing what they call the “German plan”: getting a free ride on NATO security without heavily investing in it. This would allow them to reallocate funds to boost the economy and fund a spending spree ahead of the 2026 elections. Orbán faces an unprecedented challenge, with the opposition TISZA party holding a clear lead over his government. His hope is that close ties with Trump will shield him from US pressure on the region to ramp up defense spending, allowing him to focus on domestic priorities instead. This was just confirmed by a significant leak: the INC Ransomware group hacked the Hungarian military procurement agency’s servers and posted several documents on the dark web, including a sensitive file revealing that the Ministry of Defense issued an order to halt all procurements in 2025. I reached out to Hungary’s MoD for comment, and while their reply only confirmed the hack and stated that an investigation is underway, they did not deny the suspension of military procurements.

ORBÁN-BACKED MEDIA GROUP RESTRUCTURES FOLLOWING FAILED TVN BID IN POLAND

Last time we reported that the Orbán-linked TV2 Group’s ambitious bid to snatch up Poland’s leading TV network, TVN, was bound to fail. Unsurprisingly, Donald Tusk’s government wasn’t too thrilled about the idea and even nudged the US government to take notice (TVN, after all, is currently American-owned). Polish media, of course, didn’t miss a beat, spotlighting not only the cozy ties between TV2’s owners and Orbán but also some alleged links to Russia. Industry insiders familiar with the media scene in Poland and Hungary told me that TV2’s labyrinthine ownership structure was the perfect pretext to reject the bid. After all, Hungary’s ruling elite is practically a master class in using private equity funds as homegrown offshores, camouflaging who’s really pulling the strings. (But, as usual, my great colleague Zsuzsanna Wirth at Direkt36 had already peeled back a few layers of that onion.) 

Now, after this little wake-up call, TV2 Group seems to be scrambling to tidy up its ownership in preparation for more successful foreign acquisitions in the future. The alleged plan is to get rid of current majority owner József Vida—a mid-level player in Orbán’s orbit—and replace him with someone who can put on a better respectable media tycoon face. In other words, someone who could play the part of Hungary’s late Andy Vajna, the Hollywood producer turned media mogul, who gave TV2 its initial shine. The top choice, I hear, is someone with deep ties to Germany’s conservative business and political elite. The hope is that, with this new yet still Orbán-loyal owner, TV2 Group can finally march into foreign markets like a modern-day Genghis Khan. (TV2 Group didn’t reply to my request for comment.)

CHINESE CAMPUS PLAN DUMPED IN FAVOR OF ORBÁN-LINKED DORM PROJECT

Back in spring 2021, I stumbled upon a Hungarian government draft plan to spend €1.5 billion — mostly funded by Chinese loans — on building a Budapest campus for Shanghai’s Fudan University. The catch? The project would be handled under textbook Belt and Road terms: Chinese companies, Chinese labor, and Chinese materials. Naturally, this caused an uproar, especially because the government had originally earmarked the same location for Student City, a development meant to provide dormitories and affordable housing for low-income Hungarian students. After a wave of protests, the government finally scrapped the Fudan project… and conveniently shelved plans for Student City as well. Fast forward three and a half years to this week, when the Hungarian government — facing dwindling support from younger voters — announced a sudden revival of the Student City project for 12 thousand students. For some reason, they did this without revealing a single detail regarding finances.

After speaking with sources close to the government and politicians from Budapest, here’s what I learned: they’re still eyeing the same Southern Pest site along the Danube, meaning that the suspended Fudan project is now officially dumped. The price tag can’t be lower than Fudan’s original €1.4-1.5 billion estimate (HUF 500-600 billion). However, the financing remains a mystery. As I’ve previously reported, Hungary’s state budget is stretched thinner than a strudel, so it’ll almost certainly require a foreign loan. One government-connected source hinted that the project would likely be a public-private partnership (PPP). But this time, instead of Chinese firms, the real winners are expected to be Hungarian companies owned by Viktor Orbán’s inner circle, such as Bayer Construct group (the firm that not only owns a Budapest luxury penthouse for former Orlen CEO Daniel Obajtek but also keeps him on the payroll). My requests for comment from both the government and Bayer Construct went unanswered.

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EUROPE CAN HELP REDUCE CORRUPTION IN KAZAKHSTAN. JUST TIGHTEN THE CONDITIONS FOR FINANCIAL AID, SAYS A LOCAL JOURNALIST. Despite Kazakhstan’s restrictions on media freedom and rising corruption, Western governments remain eager to maintain high-level contacts, as demonstrated by the recent visit of the Czech foreign minister and his meeting with President Kassym-Jomart Tokayev. In this interview with Investigace.cz, Kazakh journalist Dzhamilya Maricheva argues that EU countries should take a different approach. (Text in Czech.)

SMER ATTACKED THE AUTHOR OF THE TEXT ABOUT THE RECONSTRUCTION OF THE SLOVAK GOVERNMENT OFFICE. Xenia Makarova, co-author of a recent article by the Investigative Center of Ján Kuciak (ICJK.sk) and the Stop Corruption Foundation, was personally confronted by the head of the Slovak Government Office, Juraj Gedra. He went so far as to use an edited video to attack the journalist’s credibility and the article’s findings, even placing paid Facebook advertisements against her. (Text in Slovak.)

ATLATSZO.HU REJECTS THE ALLEGATIONS MADE IN THEIR REPORT AND FILES A LAWSUIT AGAINST THE SOVEREIGNTY PROTECTION OFFICE. VSquare’s Hungarian partner Atlatszo.hu has formally disputed the findings of the Sovereignty Protection Office’s “investigation report” titled “The Impact of Átlátszó’s Activities on Hungarian Sovereignty.” Atlatszo.hu asserts that the report (essentially accusing them of being agents of U.S. intelligence) is baseless and, in several instances, contains outright falsehoods. Consequently, Atlatszo.hu is initiating a defamation lawsuit. (Text in Hungarian and English.)

ORBÁN FAMILY’S LUXURY HOTEL PROFITS FROM EU LEADERS’ BUDAPEST SUMMIT. The Dorothea Hotel — owned by Prime Minister Viktor Orbán’s son-in-law — has been specifically recommended to attendees of the 7-8 November European Political Community and informal EU summits, according to Direkt36’s investigation. (Text in Hungarian and English.)

This was VSquare’s 30th Goulash newsletter. I hope you gobbled it up. Come back soon for another serving. 

Still hungry? Check the previous newsletter issues here! 

SZABOLCS PANYI & THE VSQUARE TEAM