1. When a Western Wind Blows

Since the regime change, there has been a consensus that resources supporting fundamental rights, freedoms, and pluralistic democracy have arrived to Hungary from the West. This has changed in recent years. In the early 1990s, anyone could be proud to receive a scholarship or other support from the Soros Foundation, but today, even receiving such support from USAID, the largest international aid organization of the U.S. government, carries political risk. The explanation for this astonishing shift likely comprises numerous factors. For the purposes of this analysis, it is sufficient to note how much the world has changed in roughly thirty years: the optimism surrounding and following the dissolution of the Soviet bloc has ended. The human rights and anti-authoritarian zeitgeist, fueled by awareness and guilt over the horrors of World War II, has largely dissipated. These changes are global, but they more profoundly affect those regions of the world where the aforementioned values still require cultivation.

One of the first actions of Donald Trump who was inaugurated on January 20, 2025, was to suspend the activities of USAID and other governmental organizations, the organization coordinating U.S. government foreign aid. This decision was met with widespread criticism in the United States and the international community too. Regardless of political persuasion, it can be generally accepted that the American efforts aimed at promoting progressive values and the global community have, for the time being, come to an end for a while. In this context, the precise outcome of the legal dispute concerning these funds is not particularly relevant.

The western wind, which had been prevalent for thirty years, has subsided in Hungary as well. The Prime Minister announced in his state of the nation address that Hungarian organizations receiving U.S. funding would be eliminated. A special government commissioner was assigned to this issue, but the specific legal measures to be taken remain unclear. The essence, however, lies in the shift in trend, which, of course, has been ongoing in Hungary since 2017, or even 2014.

2. Not a Legal Issue

Unfortunately, this issue is not legal; if it were, there would be no issue at all. In 2017, there was no talk of elimination in the so-called NGO law, only of requiring civil organizations that utilize foreign, Western funding for their operations to disclose this fact on their public platforms. The Court of Justice of the European (CJEU) Union has already determined in this regard that:

‘the systematic obligations imposed on the associations and foundations falling within the scope of the Transparency Law to register and present themselves under the designation ‘organisation in receipt of support from abroad’ must, as Hungary accepts, be understood in the light of the preamble to that law, whose content was recalled in paragraph 83 above.

In that context, the systematic obligations in question are liable, […] to have a deterrent effect on the participation of donors resident in other Member States or in third countries in the financing of civil society organisations falling within the scope of the [relevant] Law and thus to hinder the activities of those organisations and the achievement of the aims which they pursue. They are furthermore of such a nature as to create a generalised climate of mistrust vis-à-vis the associations and foundations at issue, in Hungary, and to stigmatise them. [117-118.]’

Finally, in the decision the CJEU determined that Hungary’s NGO Law illegally restricted civil society organizations receiving foreign funding. The law, which required registration, declaration, and publication of foreign support exceeding a threshold, and imposed penalties for non-compliance, was deemed a discriminatory restriction on the free movement of capital. CJEU found that the law created a climate of distrust towards these organizations. Furthermore, the Court concluded that the law violated the rights to freedom of association, privacy, and data protection under the EU Charter, as Hungary’s justifications for the restrictions were deemed invalid.

Petra Bárd and Joelle Grogan, writing on Verfassungsblog, summarized and commented this decision by emphasizing that the Hungarian authorities intended solely to stigmatize the affected associations and foundations. The contested provisions create a climate of distrust towards them, which is likely to deter natural or legal persons residing or established in other Member States or third countries from providing them with financial support.

Bárd and Grogan emphasized that the Court explicitly used the phrases “climate of distrust” and “generalized climate of mistrust” at numerous points in the judgment. The authors interpreted the Court’s decision as stating that the contested measures are not isolated examples of poor legislation, but rather represent a broader pattern in which “legalistic autocrats” deliberately use legal regulation to reduce or eliminate any degree of dissent or disagreement in the public and political sphere.

Bárd and Grogan conclude that, regarding the infringement of fundamental rights enshrined in the EU Charter of Fundamental Rights, the Court found that Hungary had also failed to fulfill its obligations under Articles 7, 8, and 12 of the Charter. The dissuasive/deterrent effect of the systemic obligations imposed on associations and foundations falling under the scope of the contested 2017 legislation is such that the legislation must be found to violate the right to freedom of association, the right to respect for private and family life, and the right to the protection of personal data. 

The EU Court, referring to the extensive jurisprudence of the European Court of Human Rights, has thus determined that foreign funding itself does not render an activity illegal. If an activity is lawful, then neither it nor the organization performing it, nor the individuals working on it, can be stigmatized. This is inconsistent with the right to freedom of association, the right to respect for private and family life, and the right to the protection of personal data, as guaranteed in the EU Charter of Fundamental Rights. 

Of course, the US government’s decision cannot be compared to this argument, since they did not prohibit certain organisations from accepting funding, nor did they even stigmatise them for doing so. The twin governments of the US have made a decision to siphon off resources used for certain values or perceived values. Beyond this of course the ‘free flow of capital’ argument does not work in the American context either. Although it should be noted that the manner in which resources are being siphoned raises rule of law issues overseas as well.

3. A Political Issue

The Hungarian government is fully aware of the above decision. Nevertheless, it promises to eliminate organizations, associations, and foundations that have received the aforementioned U.S. funding, regardless of how it was used.

The CJEU may, of course, reaffirm this in connection with the Commission’s infringement procedure, but this could take years, as evidenced by the fact that the judgment concerning the 2017 legislation, which was ultimately found to be illegal, was only delivered in 2020. In this regard, it is important to note that that the Hungarian Constitutional Court has done virtually nothing to protect the organizations concerned and the rights mentioned in the Charter, which, of course, are also part of the fundamental rights catalogue of the Fundamental Law. This, too, is part of the political reality.

Therefore, the question is not what is legally correct, but rather how large a segment of society can be convinced of this. This means that the protection of fundamental rights currently requires primarily social and political work, rather than legal work. We must convince our fellow citizens that tolerance, diversity, awareness-raising, civil society organizations, equal opportunities, and the rule of law are not mere slogans, but the pillars upon which a peaceful and good life rests. Of course, government measures could have a very positive effect if social solidarity increases and Hungarian citizens financially support the activities of the affected civil organizations, or if there is more volunteer work in the supported organizations. This process seems to be starting.

Of course, it is possible that the government’s current measures will remain merely communicative and that there will be no concrete legal steps. This is, in fact, irrelevant in the sense that even this communication violates the EU Charter, according to the cited CJEU decision, as it is capable of stigmatization.

The real question is whether another historical tragedy is needed for the protection of democratic values and fundamental rights to become important again, both at home and in the US. While there is no wind in the sails, those fighting for fundamental rights and a pluralistic, democratic society must row even harder. It will be arduous work, but one can become very strong in rowing. However, historical experience shows that new winds always rise.

Attila Szabó graduated as a lawyer from the University of Debrecen in 2015, and in 2018 he obtained a degree in European Law (LLM) at the postgraduate course of Pázmány Péter Catholic University. He passed the Bar exam in 2021. He also successfully defended his PhD thesis on the rule of law at the University of Szeged in February 2025. Since 2017 he has been working at the Hungarian Civil Liberties Union, where he focuses on the protection of first-generation political freedoms, the right of assembly, freedom of expression and association. Since 2024 he has been the head of the Legal Aid Service of the organisation.