To arrest historic population decline Hungary is paying couples generously to have children and build homes. But is the ruling Fidetz party feathering its own nest while cutting out the poor and immig
The most important rationale behind this decision of the government is to keep the core voters of the governmental side happy
Too many empty chairs is all too common a sight in country schools around Europe. Öttömös school in Hungary is no different, and is under threat from dramatic population decrease.
Fewer babies means fewer pupils, so single-class schools pool age groups to keep going. Marta teaches first and third grade together in her tiny class.
To save Öttömös school from closure, the Catholic church stepped in. In the 1960s, 1,400 inhabitants lived in the village. Today it is just half of that.
The mayor invites us to share the plum-filled sweet dumplings with the Öttömös children. In 2005, there were still 104 of them digging into the absolutely delicious canteen food. Today, no more than 50 children attend this school.
An historic decline…
“I would like to recall a personal memory of my childhood. Twenty years ago, when I went to school, every single class had much more than 10 children. But today, on average there are usually just six or seven children in each class – and actually there is even one age group with only three children… and another age group is completely missing: no child at all,” says Mayor István Dobó.
And the problem is becoming worse: 11 children will leave soon, but only three will start school for the first time.
Emese teaches another mixed-age-class: grades two and four. How does she handle this challenging situation?
“The big advantage of mixed-age-classes is that children get used to learning on their own – while in ordinary classes they get more help, so are less used to autonomous learning. With me they are ready to learn on their own already at an early age,” says Emese Ördögné Illés.
…and an historic opportunity?
It is such a beautiful country, but young people leave for work and fewer families have children: rural Hungary is emptying How to reverse the trend? More jobs? Better pay? A wider range of family benefits?
We travelled to the nearby city of Szeged in southern Hungary to meet the Guta family. Both work and have a modest income; the father is an army mechanic, while mother works in university administration. They have two children and are among the first to benefit from a new family support scheme, launched by the government.
Three is the magic number
This lucky family is going to get ten million Forints, or nearly 32,000 euros to make a third child, and as a reward unlocking their personal dream.
Compared to the Hungarian average income level of 800 euros per month this ‘baby bonus’ seems generous. But there is a catch. Only families planning to buy a new flat or to build a house qualify.
The Guta family lives in 60 square meters and space is tight. A third child would turn the flat into quite a cramped place. To make some extra money, Gabor even volunteered for missions in Afghanistan. But finally it was the new family support scheme that triggered the upcoming changes expected to change the Guta family’s life, as mother Erzsébet explains:
“Our dream is an own house with a garden, and our other dream is to give birth to a third child. This new family support scheme enables us to turn our dream into reality and to give birth to a third child.”
Putting families first
The government’s idea is straightforward: promise us you will make babies and you’ll get cash. Couples have to commit to having children to be eligible, and must be married. Couples have four years to fulfil their commitment to have one child, eight to have two children and ten to have three.
“There are several conditions to be matched” explains Erzsébet. “We have to buy the building plot ourselves, we need to have a workplace and furthermore we need to have contributed regularly to the social security system for a long term.”
In the capital Budapest as elsewhere official family policy, such as the development of daycare places, is one of the main pillars of the ruling Fidesz party. In terms of tax allowances, one billion euros are channeled each year towards families, and housing support schemes for families is budgeted for with half a billion euros a year.
Putting family or Fidetz first?
“Somehow it sounds crazy, 10 million Forints for three children. I am wondering if this was a politically calculated decision. Why is the government of Prime Minister Orban distributing such a huge amount of money to families?” asks euronews’ Hans von der Brelie.
To get answers we spoke to Katalin Novák, the Hungarian State Secretary for the Family. Officially she pushes for a better balance between work and family obligations. But compared to other EU countries, in Hungary few mothers with children under six are in employment. A three-child policy will not necessarily change this.
“You want three children for Hungarian families; what is the demographic problem and what is the main solution you propose?”
“We have had a demographic decline now for 34 years. Our answer to our demographic challenge is not migration. We have internal resources we would like to reach and like to focus on. In terms of money, we are spending four percent of our GDP on family support. That is more than the OECD average, which is 2.55%,” says Hungary’s State Secretary for the Family Katalin Novák.
Buying babies or bolstering the vote?
The 10 million Forint package for builders and baby-makers is called CSOK, which means “kiss”. But who will get enjoy this official embrace?
Critics of the Orban government say this is a way of boosting a chronically moribund housing sector that does not supply enough new homes to meet demand.
They also allege it is only builders close to or in favour with Fidetz that will get the contracts.
And there is little love for the jobless, or the poor. Only the middle and upper classes will get access to the scheme. Close to the parliament we have a talk with political analyst and the Director of the Political Capital Institute Peter Kreko:
“The government says: ‘Foreign migrants no, Hungarian babies yes.’ How do you explain this?”
“To put it in a political context, the most important rationale behind this decision of the government is to keep the core voters of the governmental side happy. For this, I think, it is a very good measure. But to reverse the demographic decline, this financial support scheme is, for sure, insufficient.”
Baby boom, housing bust?
Of course such a government measure will have an effect on the housing market as well, an aspect that may have been under-estimated by a government seeking to make quick political capital. What about the money? Do Fidetz’s sums add up?
For those hunting down real estate offers, maybe not. Hungarian real estate listing market leaders have seen the effects. Among them is one of the country’s top experts on money markets: Peter Gergely.
“Ten million forints for three babies; what is the economic impact of this scheme?”
“The negative aspect of this scheme is quite substantial: if you do not want to have three children you still pay the higher price for property.
Real estate prices went up between 10 and 20 percent overnight, so it is a big problem for those who can not get the financial support from the government,” says BankRáció co-founder and economic analyst Péter Gergely.
A bellyful of Orban
Budapest is blessed with many grand old-town buildings. In one we plan to meet a young artist, Zsuzsanna Simon, who has stirred up a buzz on Hungarian social networks.
The photographer is radically opposed to the populist Orban government and the pro-birth-subventions it offers.
Her weapons of protest are a blood-red pen, a bare belly, and a strong slogan: ‘I will not give birth until the government changes.’ Zsuzsanna posts her political body-art-work on social media.
She has been joined by other women who share her feminist approach. Soon, Zsuzsanna will expose photos of her action-writing in a Budapest gallery.
“What is the main reason for your protest?”
“People should be aware of this insulting policy, ordering us how many children we should have. Why do the politicians stick their noses into this? This is our private sphere, they should not make rules about the number of children we should give birth to,” snorts Zsuzsanna.
“What reactions did you get?”
“I got a lot of reactions, both positive and negative ones. But mostly negative: some people send shocking photos and I received also some quite nasty hate-mails, for instance, someone wrote to me, ‘Your race should not give birth to any child’…”
Is granting money for children a good or bad idea? For some modest income families it is a great deal of help. But there is a risk too for those signing up for the 10 million deal. The governmental message is clear: make babies – or give the money back.