Hungary's Central Bank governor vying for life-long mandate

Hungary's Central Bank attempted to persuade the country's ruling parties to use their parliamentary majority to amend legislation and enable Gyorgy Matolcsy to remain Central Bank governor until the end of his life, Vilaggazdasag reports.

ECONOMY DECEMBER 6. 2022 14:12

The information obtained by the Hungarian economic daily throws new light on the claims made on Monday by Central Bank Governor Gyorgy Matolcsy, who sharply criticised the government’s economic policy. The paper found out that, at a previous leadership meeting held by the ruling party’s the parliamentary group, it was disclosed that the top management of the Hungarian National Bank (MNB, or Hungary’s Central Bank) had recently contacted them with a request. They wanted to win the governing parties’ support in granting a life-long mandate to the central bank governor. The parliamentary group did not support this, and neither did it endorse the proposal that MNB’s current governor should be able to remain in office for three terms. Thus, none of these proposals was included in the amendment to the Central Bank Act, which is currently before parliament. The recent critical remarks uttered by MNB’s governor may be attributed to his personal grievance, according to sources.

Because Mr Matolcsy did in fact make strong claims before parliament’s economic committee meeting on Monday. According to press reports, the head of the central bank said, for example: “We have to face the fact that the Hungarian economy is in a near-crisis situation”. He also added, “We are in trouble, in many ways we are in trouble because of our own decisions,” then he went on to specify who caused the problems. “After 2010, we did not make the right decisions, and after 2021, the government made bad decisions”.

It’s worth revisiting the suggestion that the faction had received from MNB, the paper says. According to the Central Bank Act, the chairman of the organisation is appointed for a six-year term by the president of the republic on the prime minister’s recommendation. The legislation states that any person can be central bank governor for a maximum of two terms. Gyorgy Matolcsy has led the MNB since March 2013, and began his new six-year mandate in March 2019 at the head of the organisation that is key to the domestic economy and finances. His mandate, therefore, expires in 2025.

Under the central bank’s proposal, Gyorgy Matolcsy could have stayed as MNB’s president for at least another six years, until 2031, or even longer, until the end of his life. Matolcsy is now 67 years old, which means that if the idea is implemented, he could continue to lead the organisation for decades.

The paper contacted the parliamentary group leader of Hungary’s bigger ruling party regarding the matter.



economy, Hungary, scandal