Pirates to buy government debt?

Pirates of the world, unite! Somalia isn't your true haven, and Citigroup isn't the big deal - Hungary is! Hungarian 'pirates' want to buy Hungary, and Hungarian debt. In the midst of a political war, a motion that appears to sanction money laundering as a state activity appears to enjoy five-party support, writes Andras Mozer in his newest editorial.

The money is being invested in Hungary or in the ethnic-Hungarian areas of neighbouring countries. What else could happen to those thousands of billions of forints - what better fate for the Ft153bn stolen from Postabank, the sums missing from K&H Bank or the Ft1bn stolen for each kilometer motorway built?

We can't be sure about it, but it's worth asking whether the money behind the purchase of Ferencvaros's football stadium is 100 per cent British, especially when we discover that Andras Szasz, a name remembered from the Postabank affair, is involved in the transaction.

The K&H affair showed us how this all works. You park the money with offshore companies, and then invest it in buildings in Hungary and Romania (hotels, shopping centres) - in fact the money is often invested by the very same companies that are suspected of having syphoned it off in the first place. There's no end to these "foreign" investors.

But now these transactions have reached a new level, one which makes the Somali pirates look like small time players. Hungary's pirates are buying not Hungary, but Hungarian sovereign bonds. Strangely, even as the political parties war with each other, one proposal enjoys support from all five parties. It would turn the state itself into a vehicle for money laundering. A proposed change to tax laws would allow offshore companies to claim a 75 per cent tax discount on purchases of government bonds, so long as the owners held on to them for at least two years. In return for this "noble gesture," APEH would not investigate, and nor would anybody initiate a criminal investigation.

EU require that no discounts be available on revenues from criminal acts, but of course Hungary's criminal justice system has rarely handed down convictions in the kind of cases described above.

András Mózer