Hungary begins revamping university boards to unlock EU funding

Hungary has begun recruiting new members for boards overseeing its foundation-run universities as part of efforts to meet the European Commission’s conditions for unlocking frozen funds, despite plans to phase out the controversial governance model within a year.

The move is aimed at quickly satisfying the commission’s concerns over how the universities are governed, while buying time to design a permanent replacement, higher education experts said.

It comes after the commission in May reached an agreement with newly elected prime minister Péter Magyar to unblock €16 billion (£14 billion) in European Union funds frozen under his predecessor, Viktor Orbán, over rule-of-law concerns. The deal depends on a series of reforms, including the gradual phasing out of the public interest trusts (PITs) that were created under Orbán and now oversee many public institutions, including universities.

Judit Lannert, minister of education and children’s affairs, confirmed in a post on Facebook that Hungary’s education ministry had opened applications for the boards of trustees and supervisory boards of the PITs. University senates will help evaluate candidates, with applications due by 18 July.

Under the government’s plans, the foundations will continue operating during a one-year transition period, after which a new governance model is expected to replace them. Rather than attempting to negotiate an entirely new university governance model with Brussels before the 31 August deadline, the government has opted to reform the existing one for now. 

“This is a good decision [by the government]...revamping is an easier way to satisfy the EU’s expectations,” said Gergely Kováts, associate professor at Corvinus University of Budapest, whose research focuses on higher education governance. 

“Designing a new governance model and making the EU accept it is much riskier and much more difficult. [The government] would run out of time. But you also cannot leave the old boards in place. So you try to find new members.”

Under Fidesz, Orbán’s party, universities were not formally involved in selecting members of boards of trustees or chancellors, and appointments were often criticised for lacking transparency.

“Tisza, the new governing party, is trying to differentiate itself by announcing an open call and asking senates to rank and give an opinion on applicants,” he said. 

“The application process has a symbolic message – we involve the institutions in selecting the boards, we respect institutional autonomy and we are more transparent,” Kováts said. “It also has a practical significance, as the governing party might not suddenly be able to find more than 100 board candidates.”

The government is also restoring decision-making powers to university senates, requiring foundation universities to establish new senates by October, with a majority of elected internal members. 

The new board trustees are expected to oversee foundations whose powers will be reduced before ultimately winding up the foundations themselves if the government’s timetable goes ahead as planned, Kováts explained. 

Their responsibilities could include supervising the institutions during the transition, auditing the outgoing boards and overseeing the dissolution of the foundations. “It remains an interesting question how attractive this call for applications will be,” he added. 

He also pointed to another issue. Although new senates will be established by October next year, the current senate members will evaluate applicants for the new boards.

In institutions where management has significant influence over the senate, it remained unclear how the government would treat recommendations from those bodies, said Kováts.

The Hungarian Academy Staff Forum (HASF), which represents university employees, welcomed the reforms as an interim step but said they should ultimately lead to the restoration of universities as state budgetary institutions.

“We regard the announced solution as temporary, opening the way for the restoration of state universities with the broadest possible involvement of those concerned,” HASF president Viktor Olivér Lőrincz said. 

Lőrincz said Hungary’s foundation model never fundamentally transformed university financing because institutions continued to rely overwhelmingly on public money but operated outside the stricter financial and governance rules that apply to state institutions.

He added that replacing trustees alone would not be enough to restore faith in university governance. Although the government plans to reconstitute university senates, he said broader reforms were needed, including changes in university leadership and governance structures.

“In the long term…[governance should not be] returned to those rectors who represented the interests of the previous Hungarian government against the European Union in relation to the Erasmus and Horizon programmes,” Lőrincz said.

“In our view, a complete renewal of leadership is needed both at the universities returning from the foundation model and at the state universities.”

seher.asaf@timeshighereducation.com