Orbans

Hungary’s corporate landscape is undergoing its most significant transformation in decades as businesses that flourished under former Prime Minister Viktor Orban adjust to a new political order led by Prime Minister Péter Magyar. Companies that once benefited from close ties to the previous government are now restructuring their operations, while investors and foreign firms are watching for signs of a more competitive business environment.

The shift follows Magyar’s decisive election victory in April, ending Orban’s 16 year rule and ushering in an administration that has pledged to curb political favoritism, increase transparency in public procurement, and align Hungary more closely with European Union governance standards.

Construction Giants Shift Strategy

One of the clearest signs of the changing business climate comes from Market Építő, one of Hungary’s largest construction firms, which has historically secured major government backed infrastructure projects, including football stadiums.

Chief Executive Sandor Scheer said the company is preparing for a future less dependent on large public contracts.

“We are preparing for a shift where, instead of large scale projects, we will have a higher volume of smaller scale projects, and housing and infrastructure construction will become dominant,” Scheer told Reuters.

The company, which has been linked to Orban ally Istvan Garancsi, generated roughly one quarter of its revenue from public contracts during the previous administration.

End of the Crony Capitalism Model?

For years, Orban’s political allies built powerful business empires through access to state spending, public tenders, and favorable regulations across sectors including construction, banking, telecommunications, and real estate.

Analysts believe companies that relied heavily on government infrastructure spending now face the greatest risks.

Daniel Hegedus, Deputy Director of Berlin’s Institute for European Politics, said construction and road building companies closely tied to Orban’s political network could struggle to survive as contracts become more competitive.

Some firms, analysts warn, may disappear entirely if they fail to adapt to a marketplace where political connections carry less influence.

Government Pushes Transparency Reforms

Prime Minister Magyar has moved quickly to introduce anti corruption legislation designed to satisfy long standing European Union concerns over Hungary’s procurement system.

A 2024 OECD survey found Hungary had an unusually high number of single bidder public procurement contracts, while research by Hungarian anti corruption think tank CRCB concluded there was clear evidence of political favoritism in state tenders during the Orban era.

The reforms are also intended to unlock billions of euros in suspended European Union funding that has been tied to improvements in governance and transparency.

Markets React to Political Transition

Investors have already responded to the changing political landscape.

Several companies widely viewed as benefiting from their proximity to the previous government have experienced significant share price declines since Magyar’s election.

Among those affected are construction and energy group Opus Global, real estate developer Appeninn, telecommunications company 4iG, and MBH Bank.

The declines contrast with a broader rally in Hungary’s stock market, reflecting optimism that a more transparent business environment could attract greater international investment.

Companies Defend Their Business Models

Despite the uncertainty, businesses linked to the previous administration reject suggestions that their success depended solely on political connections.

Market Építő says its financial strength and diversified operations provide long term stability regardless of political change.

Road construction giant Duna Aszfalt, whose owner became one of Hungary’s wealthiest businessmen during Orban’s tenure, also expressed confidence in its future.

The company stated that it had successfully competed against international firms even before Hungary’s democratic transition in 1990 and remained prepared for a more competitive marketplace.

Meanwhile, telecommunications firm 4iG denied benefiting from political favoritism, while MBH Bank said its procurement practices fully complied with both Hungarian and European Union regulations.

Review of Previous Government Contracts

The Magyar administration has also begun reviewing spending commitments approved under the previous government.

One early decision was to suspend an extension of a southern Hungarian highway and request that Duna Aszfalt repay funds received before the election for the project.

The move signals a broader willingness to scrutinize public contracts awarded during Orban’s administration and reassess government spending priorities.

Foreign Investors Could Benefit

Political analysts believe the reforms could reshape Hungary’s investment climate by creating more opportunities for international firms that previously struggled to compete with politically connected domestic companies.

Greater transparency in public procurement, combined with stronger oversight, may improve investor confidence and encourage new foreign investment into sectors previously dominated by companies with close government ties.

However, the transition is also expected to produce significant disruption as businesses adapt to a competitive environment driven more by market forces than political relationships.

What Comes Next

Hungary is entering a new phase in which political change is reshaping corporate power as much as government itself. Companies built around privileged access to state contracts now face growing pressure to compete in a more transparent marketplace, while new reforms seek to restore confidence among investors and European partners.

Whether these changes produce lasting economic modernization or simply redistribute political influence will depend on the implementation of Magyar’s reform agenda. For Hungary’s business elite, however, the era of relying on political proximity for commercial success appears to be drawing to a close.

With information from Reuters.

The raft of proposed changes includes a new constitution and anti-corruption office, and the ousting of the president.

Hungary’s Prime Minister Peter Magyar has launched a wide-ranging reform drive aimed at pulling the state out of the captivity into which it was forced by former Prime Minister Viktor Orban.

In a fiery speech to parliament on Monday, Magyar announced a raft of economic, political and legal measures dubbed “Operation Cleansing Fire”. The plan will see the Tisza Party government install a new constitution, purge the country’s institutions, establish a new anti-corruption office, and unseat the president.

“We will free our country from the captivity of the political and economic mafia that has ruled for the past 16 years,” Magyar said.

Magyar took office in April, unseating the former prime minister after 16 years of rule. Orban’s Fidesz party had spent that time using its majority to seize control of virtually every lever of power in Hungary. It was also accused of organising systemic corruption, pushing Hungary closer to Russia, and sowing discord within the European Union.

Tisza now faces a daunting task to untangle that web, to rid Hungary of corruption and to remove key Orban allies throughout the power pyramid.

The proposed changes are part of a reform race for Magyar’s government. Using Tisza’s constitutional majority, he is pushing to fulfil a deal with the EU to implement reforms that would unlock a total of 16.4 billion euros ($19bn) in funds – frozen due to rule of law concerns during Orban’s reign – by the end of August.

Key to that drive is the removal of President Tamas Sulyok. Magyar has called on the head of state – appointed by Orban – to resign, and on Monday proposed a constitutional amendment for his removal.

The president of Hungary has few formal powers, but can slow the adoption of legislation by returning it to parliament or forwarding it to the Constitutional Court.

Sulyok has maintained he had no political agenda. Fidesz lawmaker Gergely Gulyas called Magyar’s speech on Monday “slanderous and appalling”.

Magyar’s plans would see the election of a new president, for a maximum of five years, if Sulyok is removed.

A constitutional review, complete with public discussions, would, meanwhile, kick off in September and be subject to a referendum.

Other changes would set an age limit of 70 for judges at the Constitutional Court, forcing Orban ally Peter Polt to retire as head judge, and limit lawmakers’ terms to 12 years.

Citing figures that corruption has cost Hungarians 8 to 10 percent of gross domestic product in recent years, Magyar vowed that Hungary’s top talent would field the new anti-corruption authority.

“The best police officers, the best investigators and the best experts will work for this agency,” Magyar said.

Earlier this month, the Hungarian parliament passed a constitutional amendment limiting prime ministerial terms to eight years, effectively preventing Orban from returning in the future.

MPs also voted to scrap a provision underlying the establishment of the so-called Sovereignty Protection Office, which was created in 2023 to protect Hungary from “foreign influence” and was used to investigate critics of Orban.

Closing the office was among the priorities that rights group Human Rights Watch recommended in April, alongside “moving quickly to meet the rule of law milestones” required for the EU funds, including judicial independence and anti-corruption safeguards.