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Shadow opponents

Of People and Numbers - Eastern Europe in your pocket

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Politicians in Eastern and South-Eastern Europe zero in on non-governmental organisations – disregarding economic reason.

Viktor Orbán’s greatest enemy lives more than 7,000 kilometres away from Budapest. He hasn’t set foot in Hungary in years. Once he paid for Viktor Orbán to study at UK’s Oxford University. Now he is supposedly trying to strip Hungarians and all Europeans of their identity – at least according to the Hungarian prime minister. The man in question is George Soros, founder of the Open Society Foundations, which have been working to strengthen civil society in Hungary since the mid-1980s, and expanded their efforts to the entire region after 1989. He has become public enemy number one in Hungary. Barely a speech goes by without prime minister Orbán attacking the Hungarian-born investor and philanthropist. Soros intends to flood Europe with migrants, Orbán says. His aim is to deprive the continent of its Christian and national identity, the Hungarian ‘Stop Soros’ campaign claims. Hungary now constitutes a category of its own in the European family. Just a few days ago, the majority of the European Parliament voted to initiate rule of law proceedings against Hungary. For the Slovakian and Romanian governments, Soros bashing has also become a useful tactic for drawing attention away from their own problems, a technique they also apply to local branches of foreign NGOs in particular.

The history of NGOs in the region started in the 1990s and involved a great deal of effort. It was difficult for those who came first. They usually entered uncharted territory in the neo-democratic states – which applied to both sides. In the communist era there had been no or little space for a functioning civil society, and the official line was that it was not necessary: the state provided for and took care of its citizens, and it was able to underpin its claim to power with the help of the secret service or (structural) violence – or both – at any time. Which it did. When the communist system collapsed, there was a lack of tradition and legal provisions for civil society.

At the same time, the predominantly Western organisations were facing major challenges: it was necessary to establish new legal frameworks, turn the governance process inside out, carry out economic reforms and promote free media in the respective countries – in short, it was necessary to build states. These efforts were supported by multilateral institutions such as the European Bank for Reconstruction and Development, which focused on infrastructure, and the World Bank, for example, which trained experts, economists, engineers and translators.

Criticism was quick in coming. Objections were raised against the ‘Western imperialism’ while anti-Semitic overtones were voiced just as loudly. Viktor Orbán, who today underpins his rigorous anti-refugee and anti-EU policies with similar codes, was not the first to bring this up. The difference back then was the region’s dependence on financial support without any prospects for other capital sources.

Western NGOs on the other hand, provided not only funding but access to ‘social capital’: highly respected, their grants and certifications became a symbol of quality, which – critics say – did not always result in innovation and implementation but to some extent in the emergence of a scholarship machinery – the art of filing applications.

Today, the NGO sector from the past can no longer be compared with today’s sector – at least in most states to the east and southeast of Vienna. In countries such as the Czech Republic, the non-profit sector accounts for nearly two per cent of the economic output, which, among other things, is also proof of its professionalisation. According to Peter Vandor, who conducts research into the role of civil society at the Vienna University of Economics and Business, this is not least because of the EU: ‘The EU played an instrumental role in the transition; it not only provided funding but also insisted on involving civil society in the decision-making,’ he told the European Fundraising Association, or EFA, in February.

Furthermore, one must not forget the economic progress made in the new EU member states up to the financial and economic crisis, a progress that has picked up again recently. As household income increases, there is more money left to spend on charitable purposes. A contrasting example is Kosovo, where approximately 70 per cent of all donations to charity come from foreign sponsors. 2.5 per cent of the working population works in the third sector. In neighbouring Serbia it is only 0.34 per cent.

In the Republic of Moldova, a post-Soviet state, the situation for NGOs is similar to that 25 ago. While the country had 7,000 registered non-governmental organisations in 2014, only one fourth were engaged in current projects. Most NGOs work in education, followed by social services. Estimates suggest that 80 to 90 per cent of funding comes from foreign countries – the EU and the US government are top of the list of donors. There is little cooperation between the weak private sector and NGOs, and the rapidly changing governments in Chişinău have no money left and little interest in developing a keen-eyed civil society.

The key obstacle to building a functioning NGO sector in the Republic of Moldova is the lack of resources – even though new legislation introduced in 2015 allows taxpayers to designate part of their income tax to social organisations.

More than 240 million euros in income tax are redistributed annually for the public benefit in Eastern Europe.

A few countries of the region have adapted this system. Its aim is to provide social organisations with sufficient resources, while pushing back the political influence that can be exerted through subsidies. The mechanism was originally set up in Italy, where it also contributes to financing the church. Hungary was the first country in Eastern and South-Eastern Europe to introduce it in 1996. Lithuania, Poland, Romania and Slovakia followed. Nearly half of all taxpayers in these countries take advantage of the possibility of designating part of their income tax to NGOs, with models varying from country to country. In Romania you can directly donate to official churches, whereas in Slovakia an organisation must exist for the public benefit to be eligible – the church may only benefit when it serves as a sponsor institution. In Lithuania on the other hand, donations can even be made to public organisations, provided they serve charitable purposes. More than 240 million euros are raised annually through this scheme in these five countries.

In a country where tax laws once served as a source of income to NGOs, former pioneer Hungary has now turned the tables. A new law took effect in September to impose a tax on organisations that ‘support immigration’. They will be taxed 25 per cent of the foreign support value. The Hungarian government wasn’t very subtle when choosing a name for the legislation: it’s dubbed the ‘Stop Soros’ law.

Original in German. Translated into English by Barbara Maya.

This text and infographics are published under the Creative Commons License: CC BY-NC-ND 3.0. The name of the author/rights holder should be mentioned as followed. Author: Eva Konzett / erstestiftung.org, infographics & illustration: Vanja Ivancevic / erstestiftung.org.
Cover picture: © Zoltan Balogh/AP/picturedesk.com


Of People and Numbers – Eastern Europe in your pocket

Fourteen years have passed since the European Union set off towards the east. The initial euphoria first gave way to day-to-day life and has now turned into disillusionment on both sides. In some places people have become or remained strangers, despite visible and hidden relationships, and personal, official and business relationships. Despite the numerous similarities and the value chains that now know no borders. And sometimes precisely because of them.

Of People and Numbers aims to highlight the political, economic, cultural and social realities of life in the newer members of the EU and the accession states of South-Eastern Europe on a small scale and compare them to Western European realities, at least as they appear in Austria. Are the two really always miles apart? When does the view from above fall short?

When preconceptions are put aside, a different world emerges. Of People and Numbers brings this world to you in images, figures and words. A monthly serving of Eastern Europe. Delivered to your smartphone each month.