Viktor Orbán and the Hungarian National Bank

On October 18 József Dancsó, a Fidesz member of the parliamentary committee on the budget, seemingly out of the blue suggested that another point be added to the already set agenda. The committee was supposed to discuss next year’s budget. Instead Dancsó demanded that András Simor, governor of the Hungarian National Bank, should produce proof that he in fact sold his company, which had been registered in Cyprus. Also, Simor should show proof that he repatriated the 900 million forints that, according to Dancsó, the company was worth and that he paid taxes on this amount. The committee vote on the proposal was 19 yeas and 7 nays. All opposition members, including Jobbik, voted against the proposal.

The opposition claimed that the Fidesz and Christian Democratic members of the committee dragged the topic of Simor’s business affairs into the work of the committee in order to divert attention from the 2012 budget that has tremendous problems. For starters, that the numbers don’t add up. Péter Szijjártó, the deputy chairman of the committee, was perhaps the loudest in his demand that Simor show the documents to the committee. In turn, Simor claimed that because of his position he has immunity rights and therefore the committee is not entitled to demand information on his financial affairs. In any case, he said, he had already given details of his financial situation in 2009 and 2010 when he made all available information public.

Almost a month went by when the same committee brought up Simor’s case again. Péter Szijjártó insisted on November 7 that Simor should produce the proof within two days or else. He accused Simor of “threatening the Speaker of the House.” Originally, he was supposed to produce the documents by October 30 and nothing happened. Never mind that the press department of the Hungarian National Bank made the documents available on the premises and informed the committee that Simor had sent the documents to László Kövér. But Simor still insisted that the committee had no right to investigate his financial affairs.

 

The inimitable Péter Szijjártó

Szijjártó was furious and wrote a letter to the committee on immunity urging them to investigate Simor’s right to parliamentary immunity. László Kövér provided this second parliamentary committee with the documents Simor had sent him. The committee members began to read the documents but, according to the chairman of the committee, György Rubovszky, a lawyer, “they couldn’t figure them out although there were five of them trying to find their way among the documents.” So, Simor must appear before the committee on December 20th and explain the details.

 

György Rubovszky didn’t understand the financial statement

By now, it is becoming evident that way back in October the main goal of the Fidesz-Christian Democratic MPs was not to divert attention from the state of the budget but to prepare the ground for negotiations with the Hungarian Central Bank’s governor concerning the use of “money lying around there,” as Viktor Orbán put it last Friday.

I’m coming to the conclusion that Matolcsy’s growth plan has been in the making from at least the middle of October. Yes, it is basically a useless document, but it still takes time to put together 177 pages of text and several graphs, even if they are about “intercontinental turntables” and “red bananas.” And surely it must have been obvious to Viktor Orbán and György Matolcsy that for a stimulus package money must be found and that the money could come only from the central bank. The problem, however, is that it is unlikely that András Simor would gamble on Matolcsy’s terribly vague and unrealistic plan.

András Simor who still hanging in there

Therefore, Fidesz forces began to harrass him and “wage total war,” as Népszava called the attack on Simor, in order to make the national bank a willing partner in the Matolcsy-Orbán duo’s cockeyed plan. However, as long as Simor is at the head of the bank it is very unlikely that they will succeed.

Right after he won the elections Viktor Orbán made it clear that “Simor must go.” But Simor turned out to be a hard nut to crack. Even taking away about 75% of his very high salary, a salary approved by the way by the Fidesz government when their man, Zsigmond Járai, became the governor, didn’t do the trick. He refused to budge. Orbán desperately wants to get rid of him, but Simor stubbornly refuses to step down. The next best thing is to try to blackmail him or at least make him look like a crook.

Interestingly enough, simultaneously with this attack on Simor, Matolcsy has been in constant touch with him about making the forint assets of the Hungarian National Bank available to Hungarian banks. There is no word on whether Matolcsy is making any headway with Simor. If Matolcsy’s search for extra funds is in any way tied up with his crazy growth plan and is not simply a request for a backstop for the country’s banks, I doubt that he will get very far. Moreover, I doubt that any such decision would meet with the approval of the IMF and the EU. Although I’m sure that Orbán would like to have this deal between the government and the central bank a fait-à-complis before negotiations begin.

András Simor and Ferenc Karvalits, one of his deputies, will be part of the negotiating team and I can’t see them as advocates for the Hungarian demand for a “precautionary credit line,” which still seems to be the government’s goal. That is, in my opinion, a non-starter. The IMF wouldn’t approve the kind of stimulus package that is outlined–or rather isn’t outlined–in Matolcsy’s growth plan. Especially if they have the opportunity to read it, though I’m sure that Matolcsy’s ministry is not in any hurry to translate it.

So, this is where things stand now. Meanwhile, the Hungarian government doesn’t seem to be eager to start negotiations with the IMF. I wonder why.

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Paul
Guest

How come Orbán can’t just sack Simor? Is he the one person in Hungary OV can’t get rid of?
And if the answer is that the law doesn’t allow OV to sack him, why doesn’t he change the law? He does so in every other case.

florian
Guest

What does Simor know that we do not I wonder?

Ron
Guest

Sorry guys off-topic again.
Kamaras Istvan (KNDP), one of the main advisers to Semjen Zsolt (KNDP), asked asylum in Canada.
http://index.hu/belfold/2011/12/08/emigralt_semjen_fotanacsadoja/

Ron
Guest

It seems that Dopeman, a rapper, will be prosecuted, because he used the Hungarian hyme in his rap song.
http://www.mon.hu/nyomoznak-dopeman-himnusza-miatt/1857834

Ron
Guest

Fellegi offers to resign in order to lead the IMF talks.
http://www.bloomberg.com/news/2011-12-08/hungary-s-fellegi-resigns-from-ministry-job-for-imf-talks-1-.html
MVM the state electricity company wants to spend HUF 100 billion to set up mobile telephone company together with Hungarian Post and Development Bank
http://www.bloomberg.com/news/2011-12-08/hungary-may-squander-400-million-on-mobile-provider-kbc-says.html
So basically the telecom provider provide the government with money to set up competitor. That can not be good.

Eva S. Balogh
Guest

Ron: “Kamaras Istvan (KNDP), one of the main advisers to Semjen Zsolt (KNDP), asked asylum in Canada.”
That’s more than interesting. Some Canadian Hungarians are rather active in Roma affairs because of the large numbers that arrive in Canada. I called their attention to the article.

Eva S. Balogh
Guest

Ron: “Fellegi offers to resign in order to lead the IMF talks.”
Leaving the sinking ship. This is what it sounds to me.

Paul
Guest

My question wasn’t rhetorical (1st post, above). Does anyone know the answer?

Ron
Guest

Paul: He can change the law and appoint who ever he wants, but he can only do it after the term of the current one expires.
The Head of the National Bank, any National Bank is considered to be “independent”, so that he or she can make decisions to stabilize the economy and not only national, also international. Some of them are regulated in treaties.
His function is regulated by law.
http://www.mnb.hu/Root/Dokumentumtar/MNB/A_jegybank/kt-funkcio/2008_evi_LXXV_tv.pdf

Ron
Guest

In the comment above re. Kamaras Istvan. My first thought was he is leaving a sinking ship. But now I am not so certain about this.
Today, on the Contrarian Hungarian an article of a court case re. Roma who beat up what seems to be some far right activists.
http://thecontrarianhungarian.wordpress.com/2011/12/08/a-hate-crime-case-from-hungary-retried-and-revisited/#more-1803
I condemn violence in general. And my first reaction was they got what they deserve.
However, the OECD report relating to the hate crimes against Roma list at least 40 crimes in 2008 and 2009 alone.
http://www.osce.org/odihr/68545 (page 56 to 64)
These are serious crimes. I assume petty hate crime (if such a thing exists) is not included in there. I wonder how much that may be.
I change my position to self defense.

Peregrine
Guest

It may be in order for people to realise that Hungary is seeking financial assistance from the IMF *and the EU*. This means that the EU will take an active role in shaping the conditions of the possible programme, too.
In addition, I really don’t understand why people think there are no Hungarian speakers in the EU and the IMF. It is true that documents get processed faster if they are translated into English, but the EU and the IMF will not be kept in the dark just because a document may only be available in Hungarian for a while.

Odin's Lost Eye
Guest
Mr Cameron’s main objection is the tax on Financial Transactions. This tax would be paid to the EU. and the U.K. (City of London) would pay the bulk of these. There are also rules which restrict the activity of Financial Services and other institutions. M. Sarkozy would not give any easement on this clause because it was in the French Interest to ‘gut’ the City of London. There are also certain doubts about the maintenance of principles of ‘Free Trade’ and open competition. Mind you this does nothing to solve the present crisis. This all started by Greece concealing the extent of its sovereign debt when it joined the Euro.s. The problem is someone will have to pay them! Some 1 and An – you are both correct. The Viktator will never give up ruling this land. So far we have only seen the beginning of his Rule. I suspect that the New Constitution will become the ‘Holy Constitution’ etc. Ron I do not think that the Viktator gives a fig about becoming isolated. What he is worried about is gulling more money (for him and his mates) out of the EU. To my mind is just why did Tamás… Read more »
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