Hungary’s new law conceals central bank use of money

EPA/TAMAS KOVACS

Governor of the National Bank of Hungary Gyorgy Matolcsy, has set up six educational foundations, granting them about $856m in 2014.

Hungary’s new law conceals central bank use of money


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Hungary’s parliament on March 1 passed an amendment curbing public access to information on the use of money by central-bank affiliates and doubling the pay of the bank’s governor, who is reportedly a close ally of the prime minister.

As reported by The Wall Street Journal, the amendment to the Central Bank Act, by the governing-party dominated parliament, stipulates that money the bank allocates to its various educational foundations “loses its nature as public funds,” thus public access to information about its use can be limited.

Furthermore, access to information about companies fully or majority-owned by the central bank may also be limited to protect financial and exchange-rate-policy-related interests and because of competition concerns, the amendment also states.

Opposition parties have heavily criticised the National Bank of Hungary for what they describe as a purchasing splurge in recent years on prime downtown office buildings, several palaces, and a country mansion to serve as a holiday and training resort for its employees. The central bank has also bought various art collections and paintings, including a piece by the Italian Renaissance master Titian, reported The Wall Street Journal.

The new rules about central-bank disclosure, which passed parliament in expedited handling, will also apply to related lawsuits and investigations already under way, the amendment states.

Bertalan Toth, a member of parliament for the opposition Socialist party who has launched several legal suits to obtain such information, said that the amendment “is just a smokescreen from the government to hide how much they steal”.

The far-right Jobbik party said that it will challenge the new disclosure rules at the constitutional court, claiming that the changes mean the central bank may “manage public funds in secret”.

In a separate report, the Reuters news agency noted that Hungary’s central bank, run by Viktor Orban’s ally, Governor Gyorgy Matolcsy, has set up six educational foundations, granting them about $856m in 2014. It also partly or wholly owns business units such as the Budapest Stock Exchange where it bought a majority stake last November.

“It’s clear what this is all about: you submit bills each week to parliament in order to avoid being held accountable in 2018 [when the next election is due],” said Andras Schiffer, leader of the small green liberal opposition party LMP. “These laws will go to the rubbish bin in 2018, and those who stole public money based on such laws will go to prison.”

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