Dear FO° Reader,
Greetings again from the United States. This week, we turn our eyes to Europe, and more specifically to Hungary. Just a few months ago, a titanic shift took place in the nation where the ruling Fidesz party, headed by Viktor Orbán, lost its 16-year hold on power.
As discussed in our previous coverage, Fidesz faced many corruption scandals and spent much of its time trying to reshape the country into a Catholic-values nation with heavy ties to Vladimir Putin’s Russia. While Hungary is a member of the EU, this stance complicated its relationship with the organization, which heavily opposed Moscow’s invasion of Ukraine.
Via Shutterstock
Now, under the leadership of Prime Minister Péter Magyar and the Tisza Party, things have shifted. Magyar has pushed Hungary back towards the EU’s orbit, but this is not a simple task. Institutions, including corrupt ones, have a habit of enduring. The road back to liberal democracy can be harrowing, and it will take time and effort for Tisza to achieve its goals.
Sources:
2026 Hungarian parliamentary election – Wikipedia
Power Shifts in Hungary and Bulgaria May Affect the EU | Fair Observer
Out with the old
To begin with, the new administration pushed several Fidesz officials and supporters out of power. These include former Hungarian President Tamás Sulyok and four out of five leaders of Hungary’s national security services, among others. This was part of a campaign promise by Magyar, who swore to voters that he would stamp out the rampant corruption of Orbán’s government.
Magyar has dubbed this initiative “Operation Cleansing Fire” and plans to continue, though he also warned supporters of the risks. In a speech to Parliament, Magyar compared hardline Fidesz loyalists to the Italian mafia of the 1990s. He expressed that they might try to strike back against officials investigating them with threats and violence. Still, this did not deter Magyar, and he established the National Asset Recovery and Protection Office, an agency specifically tasked with tracking down stolen or abused public assets and protecting them from further abuse.
As for the billionaires who profited from Fidesz’s rule, they appear quite unhappy with the change in leadership, but are largely untouched for the moment. While rumblings and political chest-pounding from the Tisza Party say they were planning to flee the country after the election, no official reports confirm their departure or any criminal charges, though there are reports of them moving assets out of Hungary.
Sources:
Hungary parliament votes to remove president from office | BBC
Telex: Magyar announces “Operation Cleansing Fire” | Telex
PM Magyar Fires Heads of Four of Hungary’s Five National Security Services | Hungarian Conservative
Hungary’s Parliament Adds Safeguards to Asset Recovery Office | Human Rights Watch
Orbán’s oligarchs on edge as Hungary poised to launch wealth tax | The Guardian
Hungary to Introduce a Wealth Tax for Millionaires | UA.NEWS
Orbán associates rush to move wealth out of Hungary after election defeat | The Guardian
Magyar and Orbán’s approval ratings
Having been in power since 2010, the Fidesz party had proven itself to be deeply unpopular with Hungarians by the end of its rule. During his tenure in power, Orbán turned Hungary into what he proudly called an “illiberal state,” winning adulation from MAGA Republicans and other populists such as Putin. He also presented himself as a “defender of Hungary’s Christian heritage against mass immigration and global elites,” according to The Economist’s coverage of the 2026 election.
Since his defeat, however, Orbán’s support has dwindled, including within his own Fidesz party. A leaked internal questionnaire asked party members to decide the direction of their future through a political rebrand, dissolution or the outright removal of party members such as Orbán himself.
In contrast, Magyar’s party maintains a 68% approval rating in polls this summer, with some analysts attributing this to the internally weakened state of Fidesz. The governing party has hit political speedbumps, with the approval rating dropping from earlier polls, partly due to communication errors over selecting a new presidential candidate. Nonetheless, Tisza sustains a high level of public trust as it speedily implements policy changes to achieve its goals.
Sources:
Can Viktor Orban be beaten? | The Economist
Fidesz weighs a future without Orbán and even dissolution after historic defeat | Euronews
Magyar’s first 100 days in office: Hungary’s transformation gathers pace | OSW Centre for Eastern Studies
Tisza pivots away from Orbán’s foreign policy
In a noticeable break from the pro-Kremlin foreign policy of Hungary’s previous prime minister, Magyar has gone so far as to “formally condemn” Russia’s war in Ukraine and proclaim Hungary’s support for Ukraine’s territorial integrity. Furthermore, in June 2026, Magyar lifted a two-year veto previously imposed by Orbán, which prohibited the reimbursement of EU countries for weapons sent to Ukraine. This is part of Magyar’s broader attempt to reset relations with the EU and Ukraine.
In April 2026, Magyar also approved a $106 billion loan package to Ukraine to help the country meet its economic and military needs for two years. The prime minister also approved a new raft of sanctions against Russia over the war in Ukraine. Despite these attempts to realign with mainstream European policies, Hungary’s deep reliance on Russian energy means it cannot completely sever ties with Russia, concurrent with the change in government.
Sources:
Hungary declares Russia a ‘threat’, breaking with Orbán policy | POLITICO
Hungary lifts two-year block on Ukraine arms reimbursements | POLITICO
EU approves a $106B loan package to help Ukraine after Hungary lifts its veto | PBS News
Magyar’s first 100 days in office: Hungary’s transformation gathers pace | OSW Centre for Eastern Studies
Following the money
Aside from its ties with Russia and Hungarian oligarchs, Fidesz’s support declined with the many corruption accusations against the party. These ties are just as hard to untangle, and while most of Magyar’s reforms have come quickly, there is still a large legacy of financial mismanagement left in Orbán’s wake. Magyar has accused the former prime minister of hiding the true budget deficit, with Orbán’s government publicly declaring 2026’s at 5%, while Magyar’s reckoning put it at roughly 8%. This coincides with claims that Orbán’s government left out roughly €800 ($930) million from the state budget.
The new government is now aiming for a 7.5% budget deficit in 2026. Droughts hitting the country do not help this goal, as climate change and historical water drainage practices raise potential costs. The government’s current estimates say that the country’s debt will rise to 77.5% of GDP by the end of the year, though they hope to see it fall in the coming years.
Furthermore, Budapest has met the conditions to unlock previously frozen funds they intend to use for development. Hungary has secured the release of €10 ($11.6) billion in COVID recovery funds that the EU froze over corruption concerns.
Sources:
Orbán hid half of Hungary’s budget deficit, new PM says | Financial Times
Hungary Targets Euro Criteria by 2030 | Hungarian Conservative
Hungary drained its waters for generations. Now drought is exposing the cost | ABC News
Almost EUR 800 million missing from Hungary’s state budget: Did Orbán’s government fake the numbers? | Daily News Hungary
‘Budget of reality’ to bring Hungary back into EU’s fold | Euractiv
Hungary says it has met all conditions to unlock full €10bn EU Recovery Fund | Euronews
The long and winding path
Hungary and Magyar seem to be on an upward trend, and in keeping their steady pace, the ruling party hopes prosperity may yet return to the nation. Of course, they still find themselves in a difficult geopolitical place between the EU and Russia as a result of Orbán’s government policies, and still have plenty of ground to cover. However, with things progressing at such a rapid pace, many hope for continued economic and policy improvements.
Casey Herrmann and Alexandros Ouzounis
Assistant Editor
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