Residency bond scheme deemed suspicious

The opposition Socialists have called on the government to immediately terminate its scheme granting permanent residency to foreigners buying a certain amount of state bonds as it is disadvantageous for the country's budget and could pose a threat to safety and security.

Under the scheme launched in 2013, foreign investors buying EUR 300,000 worth of state securities are offered a residency permit that can be extended for five years and which allows free travel throughout the Schengen zone.

Socialist MP Márta Demeter said on Wednesday at a press conference that “the prime minister and ruling Fidesz have been selling Hungary’s security for cash with the scheme under which 16,000 immigrants have so far been lured to Hungary.”

She is quoted by the Hungarian news agency MTI as saying that  “off-shore businesses linked to government officials have so far gained over EUR 100 billion (EUR 319m) on the scheme”. Demeter demanded that the names of all bond holders be published, and referred to press reports suggesting the list includes criminals.

The interior ministry in response rejected the Socialists’ claims as unfounded and “false”, insisting that every single individual who submits an application to buy bonds is subject to scrutiny by four state authorities. These include the national immigration office, the counter terrorism agency, the constitution protection office and the police. The applications are evaluated within 30 days, rather than a period of eight days before, the ministry said.

Several opposition parties claim that the scheme is also disadvantegous for the Hungarian state budget as the bond buyers basically provide a loan to the Hungarian state that will have to pay the money back in a few years' time not only with interests but also including the amount of commission now pocketed by people close to the Orbán government.