Happy belated New Year to our subscribers – after a long holiday break, Goulash is finally back! Although I’m writing the newsletter from cold but sunny Brno while finishing a tasty Pilsner goulash, this issue’s scoops are mostly coming from Slovakia and Hungary (but I promise to have more Czech content for next time). I’m also happy to share our fresh investigation about Viktor Orbán’s Polish social media propagandist, as well as a short analysis on Poland’s turbulent political developments. If you like our newsletter, please share this subscription link with your friends and colleagues – Szabolcs Panyi, VSquare’s Central Europe investigative editor
Back in 2016, when the soon-to-be founders of VSquare gathered in Warsaw to discuss our cross-border initiative, we worked to come up with a name. Although we eventually settled for VSquare (standing for V4, the Visegrád Four countries), the runner-up name for our site—proposed by Investigace’s Pavla Holcová—was goulash. But no brainstorming session is ever really wasted, and the name will be served as our new newsletter.
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. To kick off 2024, we take a deep dive into the murky world of Central European foreign policy making.
WHILE FICO IS BUSY WITH DOMESTIC ISSUES, SLOVAK FOREIGN POLICY REMAINS UNCHANGED
Since Hamas’s deadly terrorist attack on Israel on October 7, national security services in the European Union have been picking up some worrying intel and sharing information with each other on possible violent activities masterminded by Russia, according to three Central Eastern European sources with ties to intelligence services. The fear is that Russia would try to take advantage of the Middle Eastern conflict and the turmoil it has caused within the EU by making attempts to sow even further division in European societies through so-called false flag operations. What security agencies are assessing—and have been trying to prevent—is a scenario in which Russia’s FSB would use people from the Caucasus to carry out violent activities in the European Union during the holiday season, or in early 2024. These possible violent activities would primarily target Germany.
According to one source, Russia would likely involve Chechen or Dagestani individuals—meaning Russian citizens with Muslim backgrounds. “I’m afraid that something very bad could happen,” another source remarked, adding that German authorities are aware of the threat and allied agencies are working together on prevention. Russia’s goal would be, of course, to create a distraction so that EU governments focus less on the war in Ukraine. Note: Russia has a long history of carrying out false flag attacks in Central Eastern Europe. It’s worth reading our previous stories on how pro-Russian Polish far-right activists, disguised as Ukrainian nationalists, firebombed a Hungarian minority center in Uzhgorod—and how it later turned out that it was orchestrated by a Kremlin-linked German far-right politician.
SLOVAK AMBASSADORS ARE SPARED, THE STRATCOM TEAM IS NOT
Consequently, there is no change in key ambassadorial postings in places like Brussels or Washington, DC. In the Visegrád region, Slovakia’s ambassadors to Prague and Warsaw (who took over relatively recently in 2022 and 2023, respectively) are also expected to be left in place. But perhaps nothing symbolizes more the unpolitical nature of Slovak diplomacy than the fact that Slovak Ambassador to Budapest Pavol Hamzík, who has been in position since mid-2018 and is known to be also quite critical of Viktor Orbán’s government, has also been renewed in his posting. However, certain parts of the MFA do feel the changing of the guard as the ministry’s strategic communication department practically ceased to exist, one former high-ranking diplomat pointed out. “That unit stopped its anti-disinformation activities, and the minister gave interviews to media previously considered as pro-Kremlin disinformation channels,” the source added.
HUNGARY MAY BE THE LAST COUNTRY TO RATIFY SWEDEN’S NATO ACCESSION
Speaking of pro-Kremlin actors… “Hungary has repeated a promise that it will not be the last NATO country to ratify Sweden’s application to join the alliance, Swedish Foreign Minister Tobias Billstrom said,” reads a Reuters report from mid-December. Indeed, while it has been stalling Sweden’s NATO bid since July 2022, Hungary’s government has pledged numerous times that it will eventually ratify the accession treaty before Turkey does. But while the process has finally started to speed up in Turkey’s parliament, in Hungary, it’s nothing but crickets. Or even worse: At the end of last year, Katalin Novák, Hungary’s Orbán loyalist president, cautiously indicated her worries in multiple official meetings that Hungary may unfortunately end up being the last country to vote on the Swedish accession, according to sources familiar with these discussions. Novák also added that her impression is based on conversations with Fidesz MPs and senior Fidesz politicians, including Speaker of the Parliament László Kövér. Novák’s office did not deny this, writing only that she believes “there are more arguments for accession than against,” and that “the sovereign Hungarian Parliament has the power to decide” on it, when presented with our request for comment.
That is also exactly what Hungarian government officials tell their foreign counterparts, pretending that the governing party MPs are acting independently of them, and that these MPs are simply unhappy with Sweden. Most recently, it was Orbán himself who said that a vote in parliament is not happening because Fidesz MPs are “not very enthusiastic” about it. In some private conversations, however, these MPs themselves acknowledge that they are simply waiting for orders from Orbán. “I honestly don’t know what will happen to Sweden’s NATO accession. Only Viktor knows it,” a senior Fidesz MP who is actually in charge of the accession procedure told a well-connected foreign policy expert, as the expert later recounted to me. The expert also added that his government contacts are not worried about further reputational damage within the NATO community mostly because “we have nothing to lose—our reputation can’t be any worse anyway.” (As for why Orbán is still blocking Sweden’s NATO membership, you can read our previous analysis here.)
ORBÁN’S NEW CHINESE BUSINESS DEALS ARE KEPT UNDER WRAPS
Meanwhile, Hungary’s cozying up to China continues—in the most opaque way possible. On October 16, 2023, during his visit to the Belt and Road Forum in Beijing, Viktor Orbán published a short video on Facebook in which he bragged about “having signed ten agreements of an economic nature” with China. Since he sounded so proud of this achievement, I thought it would be a great idea to share these documents with Hungarian taxpayers, too, and so filed a number of public information requests with all relevant ministries, asking them to provide me with copies of all ten agreements. Hungary’s MFA refused my request, claiming, among other things, that publishing these documents would endanger internal decision-making procedures. One starts to wonder why that might be so.
HUNGARY TO SPEND EU FUNDS ON BOOSTING EUROPEAN EV MANUFACTURERS’ CHINESE COMPETITOR
Let’s wrap up this newsletter’s scoop section with a good example of such opaque deals. Shortly after Orbán returned from his Beijing trip, news broke that China’s leading EV manufacturer, BYD, will build its first European car factory in Hungary—allegedly, this was one of the main topics of the prime minister’s negotiations in China. Knowledgeable Polish and Czech foreign policy experts with whom I spoke pointed out that, while Hungary’s other major Chinese automotive industry investment, CATL’s battery plant in the city of Debrecen, is less problematic (it would blend into European car manufacturer’s supply chain), BYD will be a direct competitor to them. But there’s much more to the story. How did the Orbán government convince BYD to choose Hungary as their new location? Partly through offering to spend Hungary’s EU funds on paving BYD’s way to domination of the local and, eventually, EU market.
In November 2023, the government announced it would spend €240 million from Hungary’s REPowerEU funds on heavily subsidizing the purchase of EVs, as well as on installing EV charging stations. Multiple business sources with knowledge of the industry have long told me that they suspected a deal between Hungary and BYD, and that the EV purchase subsidies are actually tailored for the Chinese company. A former senior Hungarian government official eventually acknowledged the same to me. This means that Hungary would essentially use EU funds to guarantee purchase orders for BYD’s new plant, helping the Chinese not only to quickly dominate the Hungarian market, but also to get a foothold in the EU market—at the expense of both European manufacturers and EU taxpayers, of course
Got a nice scoop to include in our Goulash newsletter? Contact me at [email protected]
NEW ON VSQUARE
It’s not an easy task in Poland these days to paint a favorable picture of Viktor Orbán, arguably the EU’s most vocal Russia-friendly politician, but a Polish “fan” account on X/Twitter, “Viktor Orbán PL,” tries to do it anyway, and with great dedication. And it’s paying off: The account is not only followed by prominent far-right Polish politicians but, for example, by former prime minister Beata Szydło, too. The Polish account has been producing 1.5 posts a day on average, closely following—and translating—official Hungarian government propaganda. But who is behind the account? Well, that’s what my colleague Konrad Szczygieł and myself have found out. Spoiler: the handler of the “Viktor Orbán PL” account knows the Hungarian leader in person, has shaken his hand, but claims that he’s not on his payroll. Read it here.
Just as this newsletter was sent out, my Hungarian colleagues at VSquare’s local partner Direkt36 have received the annual Transparency-Soma Award for best Hungarian investigative journalism. In a series of articles plus a great documentary, Kamilla Marton and Zsuzsanna Wirth investigated Hungary’s failing hospitals and how hospital-acquired infections are spreading – while the Orbán government is more interested in covering it all up than actually trying to solve the crisis. Szívből gratulálunk!
BREWING IN THE BOTTOM
POLAND’S MESSY STRUGGLE WITH ILLIBERAL HOLDOVERS. The past few weeks of Polish internal politics have been closely watched and studied by academics researching illiberalism, and for good reason. This is the first time that a democratically elected government is trying to dismantle a 21st century “illiberal regime” from which it inherited a handful of zombie institutions—bodies that try to mimic democratic institutions while actually being captured and controlled by the old guard. During its recently-ended eight years reign, the Law and Justice government either filled formerly independent institutions with party loyalists, or, when it couldn’t succeed with that, created parallel institutions, the legality of which has been questioned not only by the former opposition but also by the European Union. The latter here is crucial as the Law and Justice government built its politics on attacking—and alienating—both EU institutions and the bloc’s major players.
But what happened after the new government came in? In late December, Poland’s new minister of culture Bartłomiej Sienkiewicz—a descendant of famous Polish writer Henryk Sienkiewicz—fired the leadership of Poland’s public media bodies, as they had been operating as Hungary-style state propaganda outlets for years. In doing so, Sienkiewicz circumvented a Law and Justice-captured institution (the National Broadcasting Council, or KRRiT), a move that was subsequently denounced as illegal by another Law and Justice-led institution, the Constitutional Tribunal.
Then, in early January, a Polish court convicted two figures for abuse of power. These two individuals were MPs, but they were also former Law and Justice interior minister and anti-corruption bureau head Mariusz Kamiński and his deputy, Maciej Wąsik. The case against them had previously been stalled for political reasons while their own party was in power. Even before the sentence became final, Duda pardoned both politicians. Again, their final sentencing was deemed illegal by the Constitutional Tribunal as well as by Andrzej Duda, the Law and Justice holdover institution and the president. Duda, at the height of the conflict, even tried to harbor them from the police inside his presidential palace. However, when Duda left the building, police went in and eventually captured the two convicted former MPs.
While the Polish public is seriously divided, mostly along party lines, over who is morally right and on interpretations of what is legal, illegal, or even illegal but morally right, there is a somewhat different lesson to be drawn from this messy struggle by foreign observers like myself. First, whatever the legal interpretation is within Poland, in terms of successfully enforcing one’s interpretation, what matters at the end of the day is what is understood as legal by the international community: in Poland’s case, this primarily means the European Union. And this is where the former Law and Justice government’s policies are now backfiring. The party, now in opposition, has not only lost the necessary domestic power (majority in parliament, control over the police, etc.) to be able to enforce its own interpretation of the law, but also, and more importantly, it has lost any kind of international credibility and support within the EU. The party’s newly discovered sensitivity for the Rule of Law and due processes sound inauthentic and opportunistic. It’s a lesson for parties in power: if you don’t respect the Rule of Law when you’re in charge, nobody will believe that you revere it when you’re not
If you like our scoops, stories and exclusive analysis, here are some more articles from our partners!
MORE TO READ FROM OUR PARTNERS
KOČNER’S SURVEILLANCE OF JOURNALISTS TRIED AT COURT. It’s been six years since the murder of Jan Kuciak, but it’s only now that a spin-off of the murder case is put on trial. ICJK.sk’s article explains how former Slovak intelligence officer Petr Tóth secretly surveilled not only Kuciak but 30 other journalists, and who else may have been involved. (Text in Slovak.)
CZECH COMPANY RECONSTRUCTING FOOTBALL STADIUMS IN BOSNIA AND HERZEGOVINA HAS ITS CONTRACTS INVESTIGATED BY LOCAL PROSECUTOR’S OFFICE. In 2021, the Bosnian Football Association’s new leader promised massive investments into stadiums. It all ended in a remarkable corruption case with Czech involvement, as investigace.cz’s new story reveals. (Text in Czech.)
NEW ROUND OF GOVERNMENT FUNDING FOCUSED ON FIDESZ-LINKED, YOUTH ORIENTED GONGOS. Prime Minister Orbán’s ruling party is struggling to appeal to younger voters—so it started pouring public money into pro-government NGOs focusing on the younger generation, Atlatszo.hu writes. (Text in English and Hungarian.
This was VSquare’s 12th Goulash newsletter.
I hope you gobbled it up. Come back soon for another serving, and check previous newsletter issues uploaded online here!
SZABOLCS PANYI & THE VSQUARE TEAM
VSquare’s Budapest-based lead investigative editor in charge of Central European investigations, Szabolcs Panyi is also a Hungarian investigative journalist at Direkt36. He covers national security, foreign policy, and Russian and Chinese influence. He was a European Press Prize finalist in 2018 and 2021.