The report highlights that Hungary’s system of checks and balances has been undermined, thereby also weakening the integrity of the bodies examined. Even where legislation enacted provides adequate grounds of independence, it is doubtful that control institutions such as the State Audit Office or the new organs of judicial administration can operate free of interference in practice.

Corruption risks arising from the symbiotic relationship between the political and the business elite, commonly voiced doubts regarding the independence of control institutions, and the lack of transparency in the legislative process together signal that the Hungarian state has been captured by powerful interest groups.

The “National Integrity Study” assesses the performance of, and corruption risks in, 13 institutions and sectors, from politics and judiciary to media and business. The integrity system is assessed the second time in Hungary with research currently ongoing in 25 European countries.

Party financing and the business sector face the most alarming corruption risks

The two NIS pillars that face the most alarming corruption risks are still party financing and the business sector. Rules on party and campaign financing do not ensure transparency and accountability, with the result that political parties finance their operations though funding obtained from opaque, non-identified sources.

In the business sector the economic crisis and the fast paced legislative process have created an even more chaotic environment for companies than that was earlier the case; companies face heavy regulatory burden and unpredictable state interventions. High corruption risks are present in common business transactions such as bankruptcy, liquidation, procurements, and obtaining official permits.

TI has compiled a broad list of recommendations

Among the most crucial steps to take are the need to reduce political influence on independent institutions, tighter regulation of party and campaign financing, effective protection for whistleblowers and the implementation of a comprehensive anti-corruption programme covering all sectors and institutions concerned.

„Hungary's weak integrity system undermines economic stability, and blocks efforts aiming to re-build confidence among the players of economy. The government should implement a systemic and effective anti-corruption program besides the one focusing on integrity in the central administration”– emphasized Noémi Alexa, executive director of TI adding that the anticorruption organization is ready to support the government’s work with expertise, proven techniques and best practices.

National Integrity Study 2011"

Source: transparency.hu