Hungarian government refused to become a member of the European Startup Nations Alliance (ESNA) aimed at supporting startups in the EU. The reason is that the declaration needed to be signed to join it contains a clause mentioning gender diversity, Sifted reports.

  • The ESNA is a forum of the EU governments that was created in 2021 to maintain and develop startup-friendly policies. Monitoring the progress and sharing best practices in policy areas, such as changing national rules on stock options or tech visas, are among its goals. To date, ESNA has nine members — Austria, Bulgaria, Romania, the Czech Republic, Estonia, France, Portugal, Slovenia, and Spain.
  • The ESNA’s entry prerequisite is signing the EU Startup Nations Standard of Excellence (SNS). It is a list of recommendations for governments on implementing startup-friendly policies. So far, 26 EU governments and Iceland signed the declaration. Viktor Orban’s conservative government isn’t among them.
  • The reason for Hungary’s refusal is one of the clauses in the declaration that mentions gender diversity. The clause states that the governments need to pay attention and act on supporting diversity and inclusion in their startup policies. Basically, the governments are recommended to encourage startups to hire people regarding diversity of ethnicity, gender, religion, age, and sexual orientation.
  • On April 6, the Hungarian government confirmed that the problem in the clause is the wording of “diversity of gender.” For years now, the conservatives of the country have been promoting “traditional social values”, promoting discrimination against minorities and opposing the term “gender.” It seems that these policies may now also affect the Hungarian startup ecosystem.
  • However, the Hungarian startup ecosystem is on the rise, Sifted writes. In 2022, the Startup Hungary’s report showed 60% increase in raising capital in comparison to 2021 — it is over €180 million in total. At the same time, startup founders claim that there are regulatory issues, such as bureaucracy, not favorable tax and stock option regimes, which obstruct their startups’ growth.