DAVOS (BLOOMBERG) - Budapest-born billionaire George Soros said Hungarian Prime Minister Viktor Orban has dragged his nation into a phase in which the interests of the people are being "exploited by a mafia state".

Soros, speaking at a dinner taking place on the sidelines of the World Economic Forum in Davos on Tuesday (May 24), said he has a rule against discussing Orban and their personal differences in public.

Still, he said the Hungarian leader has turned the way he runs his country in "a very clever construction".

Earlier on Tuesday, Orban launched his new government by declaring a state of emergency in Hungary.

He also pushed through a constitutional amendment allowing his government to rule by decree in situations including when war breaks out in a neighbouring state.

Orban, the EU's longest serving head of government, has clashed with the bloc over issues ranging from opposing an EU ban on Russian oil over the war in Ukraine to immigration and the rule of law.