Hungary's ruling elite is bracing for a major realignment as Prime Minister Viktor Orban is seeking to contain mounting political and economic pressures, a year before the momentous 2026 elections, with polls showing Fidesz trailing behind Tisza Party. Hungary's veteran leader is facing challenges on multiple fronts, including the cost of living crisis, the scandal over the possible misuse of central bank foundation funds. Meanwhile, his European isolation is deepening, and relations with the Trump camp appear to have cooled, reports Radio Free Europe (RFE).

One of the most striking details in the report, among many other noteworthy revelations, is that a prominent construction tycoon could be arrested in the coming weeks. Without naming names, RFE writes that the businessman is well-connected to the inner circles of the ruling party, who has played a major part in state-funded tenders. Opposition leader Peter Magyar and independent MP Akos Hadhazy, the organiser of recent demonstrations in Budapest over the tightening of right of assembly, have independently pointed to the same possibility, probably from sources within Fidesz.

Both politicians have warned that this could just be a part of the show to divert attention from other high-profile corruption cases and the cost of living crisis.

Comments by Fidesz strongman Janos Lazar foreshadow the impending clampdown on some of their own people, oligarchs. Speaking at a public forum last week, the Minister of Construction and Transport surprised his audience by saying that "There is a growing sentiment within Fidesz that those who 'latched on like ticks' and abused the system must now be removed and brushed off."

His comments have since been amplified in a party-backed social media campaign. This reinforces the view that it reflects the view of his party. The message is clear: excesses within the ruling elite will no longer be tolerated.

Faced with growing discontent over economic stagnation and the opposition's rising momentum, Fidesz ministers and Prime Minister Viktor Orban himself set off on a country tour with the aim of "strengthening dialogue with voters", copying Peter Magyar, who has been holding mass town hall meetings across the country.

According to RFE, Arpad Habony, the influential shadow strategist of the prime minister, has also found himself sidelined following a series of costly miscalculations. The recent firing of one of his confidant from the Cabinet Office, overseen by Antal Rogan, could also be linked to these developments.

Sources indicate that Habony's involvement in Donald Trump's campaign backfired after he allegedly issued "an irrationally high invoice," for his services prompting a direct complaint from one of Trump's closest advisors to Orban.

According to RFE, former US ambassador to Hungary David Cornstein lobbied for Habony to be brought into Trump's campaign team in 2024. This did not materialise, as a Republican congressional staffer said that "Orban's name could damage the Trump campaign." Habony had been privately boasting about his trips to Florida and his meetings with members of the Trump campaign team.

The consulting firm of the Fidesz spin doctor, which has worked on campaigns in Poland, Slovenia and Macedonia, was eventually given some role in the campaign last year, but RFE did not provide details.

Additionally, a covert operation planned by Hungary's Counter Terrorism Centre (TEK) in the Bosnian Serb enclave triggered concerns in Washington, which could have also played a part in apparent cooling of ties.

US officials feared that Hungary's involvement in Bosnia-Herzegovina could potentially destabilise the Balkans. According to reports, Hungarian special forces planned a covert operation to rescue separatist Bosnian Serb leader, Milorad Dodik, if he was arrested following a court ruling.

The Hungarian government denied any involvement saying the staff of 70 people were deployed in what was a joint exercise and training, however regional sources insist that the operation was aimed at assisting the pro-Russian Bosnian Serb leader.

The US-Hungarian diplomatic chill could be a temporary phenomenon as Orban failed to condemn US tariffs on European automakers, a move detrimental to Hungary's flagship, export-oriented automobile industry.

According to RFE, Arpad Habony was also instrumental in brokering the gigantic €12bn development promised by UAE-based Eagle Hills to build a new city district in a rust zone near the centre of Budapest. The project, initially branded as "Mini Dubai," but later rebranded to "Grand Budapest" for a more appealing image, was set to feature skyscrapers reaching up to 500 metres, luxury apartments and even a mosque.

The ambitious plan collapsed after the Budapest municipality exercised its right of first refusal on parts of the site. The ruler of the United Arab Emirates reportedly expressed frustration over the lack of preparation during Viktor Orban's visit to the country in late January, further damaging Habony's standing.

RFE's article also elaborated on the fallout of the scandal surrounding the central bank. In a report published in mid-March, Hungary's State Audit Office (ASZ) found serious financial mismanagement in foundations set up by the MNB, leading to losses worth hundreds of billions of forints.

The ASZ filed a criminal complaint in the case and suggested that the intricate network used by the MNB's asset manager Optima was designed to conceal financial assets. According to independent media, the business circle of Adam Matolcsy, the son of former MNB governor Gyorgy Matolcsy, has enriched themselves through the schemes, buying luxury homes in New York, Switzerland and Dubai. Valasz Online learned that Adam Matolcsy oversaw the operations of the companies under the alias "Petra Kovacs".

According to RFE, Gyorgy Matolcsy has secured immunity from prosecution despite the enormous losses incurred by the MNB foundations. Adam Matolcsy has been spreading the word weeks ago that an agreement between his father and the prime minister was imminent.

Pro-government media has framed the MNB scandal as an internal matter for the central bank, avoiding direct attacks on Matolcsy and the entourage. Many outlets have not even reported the report of the state audit office, let alone the financial implications.

In a recent interview with Index.hu, Matolcsy dismissed the ASZ report as "factually incorrect, unethical and methodologically unfounded," insisting that "not only has the national bank's foundation wealth remained intact, but it has actually grown."

Close associates of Adam Matolcsy have already relocated abroad, with key figures settling in Dubai and London. The arrangement ensures that legal proceedings linked to allegations of embezzlement will be prolonged indefinitely, effectively neutralising any immediate legal risks, Radio Free Europe writes.

According to media speculation, Matolcsy's immunity may also stem from his insider knowledge of the financial wealth of the Fidesz elite.