György Matolcsy, MNB Governor, has a “Personal Issue”, not professional concerns regarding Economy Minister Marton Nagy.
György Matolcsy, Governor of the National Bank of Hungary (MNB), speaking last week to the Hungarian Economic Association in Nyíregyháza (screen shot).
“Somewhere we've lost our way again: György Matolcsy yet again slams the Orbán government,” independent economic newsite hvg.hu headlined its piece last Thursday on the central bank governor's address to economists in Nyíregyháza.
Not for the first time in recent years, Mr Matolcsy lambasted the government for what he deems a string of poor economic policy decisions, including a costly, delayed reaction to inflation which has hurt consumers and household savings, all of which has been “anti-middle class”.
And in a head-on clash with current government policy – think China battery plants and German auto factory investment - he contended such foreign investments offer poor returns in comparison to domestic industries.
In contrast, a focus on domestic, knowledge-based sectors is needed to improve long-term competitiveness and should be the order of the day, along with a determined effort to control the budget deficit.
Now these are pretty serious points, even if, in earlier years, Matolcsy himself may have been 'on the other side' of the argument, such as budget balancing.
The the governor, of course, owes his very influential (and very well remunerated - according to hvg he began to pick up HUF 6 million a month from January 2023) position to his many years as the favoured economist of Viktor Orbán.
That, however, seems to be a thing of the past, and the man who has the prime minister's ears on matters economic today is Economy Minister Márton Nagy.
Indeed, Nagy's swift rise to most-favoured money-man status appears to have upset Matolcsy, as well it might: Nagy was formerly his underling at the central bank.
At least, that is what anyone can read between the lines when it comes to the government's response to Mr Matolcsy's complaints.
For, according to Balázs Orbán, the prime minister's political adviser, the reason for all this kerfuffle is simple: György Matolcsy has a “personal problem” with Márton Nagy rather than a professional one, he told government-friendly outlet Mandiner after the Matolcsy tirade.
This story, rapidly picked up by other news media, cites the adviser as saying that the dispute, though a burden for the Hungarian economy, would disappear after March next year, when Matolcsy's terms at the MNB comes to a close.
“Until then, we can handle it, no sweat,” Mandiner quoted the PM adviser as saying, before - ignoring any of the issues raised by Matolcsy in detail - he switched to favourite issues such as government economic goals, immigration and the war in Ukraine.
So there you have it, Mandiner readers: it's just a personal spat, move along please, nothing to see here.
Really?
The central bank governor itemises a series of economic policy criticisms, and this is merely dismissed as a “personal problem”.
Moreover, the Prime Minister himself, just three days later, declared at the annual Fidesz picnic in Kötcse that the country needs a “new plan for economic growth” to realise 3.5% expansion next year - though naturally without revealing any hard details of how this will be achieved.
But there you have it: as many repeatedly say, Hungary is a country of no consequences. And this episode is a perfect example of that.