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Investing in Illiberalism

Why European Businesses Should End Their Embrace of Hungary and Poland

EU and Polish flags at a demonstration against judicial reforms in Warsaw, July 2017. Kacper Pempel / REUTERS

“Europe,” Emmanuel Macron said last month, “isn’t a supermarket.” The French president was referring to the recent illiberal actions of some central and eastern European states, which he argued had come to rely on the bloc to “dispens[e] credit” in the form of budgetary assistance “without respecting [the EU’s] values.” Though Macron didn’t mention them by name, it was clear that he was referring to Hungary and Poland.

It is easy to understand why Macron made that statement. Hungary and Poland have profited from the EU’s common market and generous investment funds, but they have defied its core democratic norms. In Hungary, Prime Minister Viktor Orban has built what he has called an “illiberal state” by rewriting the constitution, hollowing out democratic institutions, harassing civil-society groups and universities, and pursuing hateful campaigns against migrants, Muslims, and liberal philanthropists such as George Soros. Poland’s ruling

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