Today’s Hungary is in what more and more people are calling a “captured state” as the country’s financial system has ceased to serve its primary function of driving the economy, instead becoming an instrument of Viktor Orbán’s political survival.
The basis of the Fidesz party’s political strategy has become the so-called “electoral clientelism,” i.e. a system where public funds are distributed not on the basis of economic expediency, but to buy the loyalty of specific groups of voters. The “Otthon Start” program, launched in July 2025, is a classic example of such manipulation. On paper, it is assistance to young families, who are given a loan at 3% for 25 years, but it violates the principles of the free market and does nothing but harm. According to this program, the state compensates banks for the difference between the market rate, which in Hungary fluctuates around 7%, and the preferential rate. This means that Orbán’s government spends about $500 million a year in budget funds on interest subsidies, and this is a use of administrative resources for his election campaign, since these programs are launched only during periods of falling ratings for the ruling party.
For the average citizen, this looks like an opportunity to get 50 million forints for a house. However, when hundreds of thousands of people simultaneously receive such benefits, real estate prices instantly skyrocket, negating all the benefits of a low interest rate. Moreover, this surplus of money goes beyond the real estate market and begins to put pressure on the consumer basket. The National Bank of Hungary is forced to fight the consequences of such a policy, but its tools, for example, raising the discount rate, are neutralized by the actions of the government. A paradoxical and illegal situation arises: with one hand the state tries to control prices, and with the other, through the banks MBH and OTP, it increases inflation to please voters.
Another example of Orbán’s abuses is the history of the creation of MBH Bank, which took place through the merger of three banks, as a result of which control over its assets passed to Orbán’s personal friend, Lorinz Meszáros. This is systemic corruption at the state level as the state has given up control of it, keeping only 20% of the shares to hand over the rest to a loyal oligarch. Today, MBH Bank is used as Orbán’s “parallel treasury” and financing far-right parties, for example in Spain and France (Vox and Marine Le Pen).
Another tool of Orbán has become the state-owned Eximbank, whose main task is to help Hungarian companies enter foreign markets, but it is currently performing functions that are not typical of it, in particular, it has become the main creditor of the KESMA fund. This fund is a media empire that unites 476 pro-government media resources, and the use of a state bank to finance a propaganda machine is a violation of democratic standards of freedom of speech. In essence, the authorities are using state credit lines to oust opposition opinions from the information field, which makes the electoral process unequal, since the opposition does not have access to such resources.
In addition to large-scale state programs, there are also more hidden, semi-criminal schemes for withdrawing funds. The so-called “consulting services” are often mentioned in the investigation materials. Banks (primarily MBH and OTP) conclude contracts for huge sums with firms belonging to the Fidesz entourage that supposedly conduct “risk analysis” or “strategic planning”. In reality, millions of forints are paid for these services, which are then legally transferred to party functionaries through dividends to the owners of the firms. This allows Orbán to circumvent the law on political parties, which prohibits direct funding from banks. The money is simply “laundered” through intellectual services, which most often have no real effect.
OTP Bank, as the undisputed leader of the financial sector in Hungary, occupies a special place in Viktor Orbán’s political and economic structure. As the country’s largest private bank, it has become the main instrument for mass outreach to the electorate; hundreds of billions of forints of subsidized loans passed through OTP’s extensive network in 2024–2025. The government is deliberately using the bank’s market capabilities to deliver its pre-election “gifts” to the most remote corners of Hungary, turning standard banking products into instruments of direct political influence. Orbán has effectively nationalized the private bank without buying out its shares, as it finds itself in a situation where its stability directly depends on loyalty to Fidesz, and its resources are used to finance electoral bonuses. Thus, the country’s largest bank has transformed from an independent financial institution into a channel for financing Orban’s political whims, for which the Hungarians themselves ultimately pay through inflation and the depreciation of their savings.
This is why foreign investors perceive Hungary as a country with a high level of political risk, which forces them to withdraw capital from this country and this puts constant pressure on its economy. As a result, a Hungarian who received a “gift” from Orbán in the form of a preferential mortgage, overpays for gasoline and food every day due to the depreciation of the forint, and this is a hidden form of tax that the government shifts onto the shoulders of the entire population in order to secure the votes of a certain part of the electorate.
What is happening in Hungary today is a systemic destruction of the rule of law using financial instruments. Viktor Orbán has built a system where bank credit has become a substitute for the ballot, which creates a dangerous precedent for the whole of Europe, when democratic procedures become only a cover for deep corruption and usurpation of power through financial control.
Using banks as a tool for distributing benefits creates “holes” in their balance sheets. If the state delays compensation, which often happens in conditions of budget deficit, banks find themselves in a situation where their assets do not cover their liabilities, and the situation with MBH Bank, which has become the “purse” of the oligarch L. Meszáros, is particularly worrying. The concentration of loans in the hands of a narrow circle of people connected to the government creates the risk of systemic collapse in the event of a change in the political situation. If the companies of the oligarchs close to Orbán stop receiving government orders, they will not be able to service their debts to the bank, which will lead to a chain reaction in the entire financial system of Hungary.
The government knows this, but it deliberately jeopardizes the stability of the banking sector for the sake of short-term political dividends. Whether Hungarian society will be able to break this circle on April 12 is an open question, but the scale of the abuses already requires a legal assessment and the holding accountable of all those involved in the creation of this corruption network.