The real estate empire of the Hungarian National Bank and its foundations

Back in August 2014 I wrote a post with the title “The Hungarian Central Bank goes on a buying binge.” If I had known what would follow, I would have chosen a more modest description. Spending has continued unabated. Up to that point the Hungarian National Bank had purchased only two pieces of real estate: a former castle-hotel in Tiszaroff for €1.3 million (415 million HUF) and the Eiffel Palace in Budapest for €57.5 million (18 billion HUF). Since then more property was purchased, not directly by the Hungarian National Bank but rather by the foundations the National Bank established. The purchases were made by György Matolcsy not as the chairman of Hungary’s central bank but rather as the CEO of these handsomely-endowed foundations. In my original post on the subject “only” 200 billion forints had been sunk into these foundations. The latest figure I heard was 300 billion.

Matolcsy has expensive taste. He seems to be especially fond of the pricey buildings in the Castle district of Buda. It is here that Matolcsy, or rather his “foundations,” bought three buildings not far from one another, ostensibly for educational purposes.

One of Matolcsy’s foundations, the Pallas Athene Domus Animae Foundation (PADA), purchased the first of the three buildings: the former Buda City Hall (Úri utca 21) that served the city until 1873 when Buda, Pest, and Óbuda joined to create Budapest. The price was 1.85 billion forints. Apparently, Matolcsy is planning to open a tavern, a wine museum, and a restaurant downstairs while a “doctoral school for economists” will be located upstairs. The idea of the National Bank running a tavern is quite a hit in Budapest.

The next building acquired by the same PADA foundation is the Lónyai-Hatvany house (Hunyadi János út 26), which is known to be the most expensive piece of property in Budapest. The foundation paid 11.2 million euros (3.4 billion HUF) for it. It was originally built for Menyhért Lónyai, prime minister between 1871 and 1872. The house was then purchased by Ferenc Hatvany, an art collector and patron of the arts. The place was once filled with paintings by El Greco, Cranach, Courbet, Renoir, Pissarro, Picasso, and the best of Hungarian artists. Many of these paintings were subsequently hidden in various bank safes, but 168 of them were “liberated” by the Soviet troops. They were discovered in 1991 in Nizhny-Novgorod. The building, which is only half-finished, is a replica of the original, which was leveled by a bomb. Apparently, Matolcsy would like to open a restaurant here as well.

The most fascinating story concerns the third building. It was acquired by the Pallas Athene Geopolitikai Alapítvány (PAGEO) and will be transformed into “a research and educational center.” The purchase price was 795 million forints. This building, which stands at the very end of Úri utca (number 72), has a most unusual history. Many old cities, especially those built on hillsides like Buda, had an underground labyrinth through which one could traverse practically the whole inner city. This is especially so in Buda, where there are several fairly large caves. Úri utca 72 is one of those houses beneath which there is an underground labyrinth that connects several larger and smaller caves. In 1936, when the Hungarian government began worrying about the possibility of war reaching Hungary, in great secrecy it purchased the property. It wanted to have a safe place to deposit Hungary’s gold reserves and the Holy Crown. Anyone who’s interested in the details and knows Hungarian should read the story of the “bunker” by Balázs Szabó. Perhaps Matolcsy was inspired by the fact that the underground “bunker” was once in the possession of the Hungarian National Bank.

What we can see: Úri utca 72

What we can see: Úri utca 72

The bunker under the building, according to the photos taken in the 1990s, is in pretty bad shape. But it looks as if the foundation has plans to utilize it in some way. The plans 444 got hold of are too general to know exactly what Matolcsy has in mind, but 444 is almost certain that it will be a three-story structure that will include a wellness center. The reporters detected several jacuzzis, a large swimming pool, and several saunas. That would be the lowest point of the “bunker.” From there a 150-160 m. tunnel, 35 m. underground, would lead to another building on Attila út.

Knowing the paranoia of Fidesz politicians, I wouldn’t be at all surprised if the real purpose of the “bunker” is to provide a safe haven for the treasures of the National Bank as well as a secure retreat for members of the government.

PAGEO denies the very existence of such plans, with or without a wellness center. But somebody drew up plans, and they look like this:

Elevator takes one down to 35 meters

Elevator takes one down 35 meters

The tunnel

Entrances into the bunker complex: Úri utca, Lovas út, Attila út

Entrances into the bunker complex: Úri utca, Lovas út, Attila út

In addition to these valuable properties in the Castle district, I should mention two more buildings in Budapest. One is a four-story building in downtown Budapest (Kálmán Imre utca), which was bought in 2014 for 450 million forints. Of course, the buyer was one of the foundations (Pallas Athene Domus Scientiae Foundation). The other building is a luxury villa on Mátyás Király út in the expensive Svábhegy district in Buda. It is in close proximity to Matolcsy’s official residence. Naturally, it was purchased by a foundation, this time PAGEO. Previously the building was owned by the Budapesti Francia Iskola és Gimnázium.

The Bank is also planning to spend another 411 million forints to add an extra floor to the Eiffel Palace, which was purchased in 2014 for the very inflated price of 18 billion forints. This floor would be the exclusive space of the National Bank. Currently the whole building is rented out to various firms, but this top floor would serve as offices for the highest officials of the bank, including the office of the chairman. There would be conference rooms, a library, a large lecture hall, etc. So, basically, the top echelon of the bank would move to the eighth floor of the Eiffel Palace.

A less glamorous purchase was the building of the County Hospital in Kecskemét. The price of the 2015 purchase was 1.7 billion forints. The building is close to the already existing Technical School of Kecskemét College, established only a few years ago, where Matolcsy is planning to have one of his schools of “unorthodox economics.”

The Hungarian parliament, in near record time, voted to make all transactions of the National Bank and its foundations secret for thirty years. According to all responsible legal scholars, moving public money into private foundations is unconstitutional. Even President János Áder, who rarely has compunctions about bills the Fidesz-majority parliament sends him, was taken aback by the audacity of the whole affair. He had the courage to send the bill to the constitutional court for review. Sometime in April we will find out what the Fidesz loyalists of the court will do. Perhaps they will deem the bill unconstitutional. But even if they rule against the Hungarian parliament, the court is so tainted by now that most critics of the administration will be convinced that the decision wasn’t reached independently but at the order of Viktor Orbán, who came to the conclusion that Matolcsy had gone too far and that his business affairs reflect badly on him and his government.

March 13, 2016
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“…came to the conclusion that Matolcsy had gone too far and that his business affairs reflect badly on him and his government.”

C’mon now, Eva. This sounds like apologist stuff. There ain’t a thing
that Viktor doesn’t know about AND initiates…it may only appear like that from time to time so that he can do the two-step and back off when he thinks the ‘theatre’ of it all demands it.


He secures the most authoritative permission by that. Everything is being done by “best practice”, so how could anyone dare criticise such deals…?


More importantly, it would be interesting to discover who the lucky sellers are getting all these inflated prices for their real estate…


I am on Petofi’s side on this one. Let’s see what happens. As we all know, the exposed results of this lucrative business is the tip of the iceberg, still requiring a detective’s work to uncover. As some Hungaricus put it, MNB is one/ one of the many “money pumps” to siphon out (of control) public funds. We need to dig deeper to understand the scale and the hazards this policy poses to the public, such as manipulation through the exchange rates, through newly acquired government owned banks, ruining the property market (for the sake of very few) with CSOK and other means, turning Hungary into tax paradise, etc. The list just never seems to end. That is one reason why the government is running from Maastricht Treaty like the devil from incense. EURO rules would certainly limit the possibility of such menacing action.


As I noted on my facebook posts, this is going to be THE FÜHRERBUNKER, for the viktor and his Mafia hoodlums and henchmen. Once the people forget the news, construction work will start again in great secrecy.
All dictators are the same, they want to hide underground after their days are over. They think, naturally, that it is better to be in a cave, than swinging at the end of a noose tied to a lamp post.

London Calling! We ain’t seen nothin’ yet! Orban’s plans for the Castle District – and the local park – put Matolcsy’s real-estate greed in the shade. These benefactors of their old family’s positions in the Nomenklatura have given them the chutpah and belief that these assets – otherwise state assets, actually belong to them. This is a form of Noblesse Oblige – but in reverse. A commocracy’s version of it. Just as Pal Schmitt demanded a pension and a residence from the state when he got sacked – even though he has three other properties – and he was sacked through dishonesty. Making Hungary an International laughing stock. (I was outside his Sandor Palace the day he got sacked – marching in and out of the sentry boxes as his redundant car was parked on the square – and the soldiers who used to guard him smoked down a side street – and watched me – I found out after.) When their skys fall in – it will be difficult to prise these possessions from their fingers – the paperwork will disappear – or they have a standby legal device to wrest ownership from the state at the crucial moment.… Read more »


We might expect the same outcome, if it goes on much longer!
Albeit, the Red Army is on the wrong side this time… But don’t worry, the end (of Orbán) may justify the means, whichever way it goes!
As long as it moves forward,that is,


The plan of the undeground structure under Uri u. 5 looks like a spoof, but probably it isn’t. It’s too elaborate. The purpose of it may well be to serve as a hiding place for the top Fidesz echelon. It is not deep, spacious and luxurious enough to be the Führerbunker, as we will see when the plans of that structure with its escape tunnels are eventually leaked.

Imagine the situation that Budapest is in uproar and chaos and all the top Fideszniks are sitting in the catacombs of the Buda Hill with very, very bad consciences and suspecting that every single escape tunnel is known by the people they have cheated for years. They cannot escape without helicopters and Putin has not delivered in time and if he had the helicopters could be easily shot down by small hand held launchers of heat seeking missiles. Spine chilling, isn’t it?


Correction: Uri u. 72


Jean P, I agree with a small addendum: every country has more than one Führerbunkers. Just recall the construction of metro. Well before M1 leaders, including military, had their “hideaway” places.


In a crisis Orban probably will keep his people together in fear of independent initiatives.


My suspicion is that this bunker will be like many other projects of this mafia – it will serve nothing at the end, but shrouded in secrecy as HNBank vault or something, it will be another ripping construction business for the Orban cronies.

György Matolcsy seems totally bought into the Budapest tourist economy as is evident by the restaurants, wine museums, etc planned by his foundation’s acquisitions. Statistics show that the average occupancy of the Budapest hotels was 60.4% in 2012, 3.4% more than in 2011. By 2014 the average occupancy rate for Budapest hotels had risen to 75% with a significant increase in total rooms many of which are in upscale hotels. According to the data I have seen 86% of the hotel occupancy in Budapest is based on foreign tourists. Profits in this sector in Hungary are relatively high because of low wages, even considering various payoffs to Fidesz operatives. Average monthly salaries in the Hotels-Restaurants sector using constant 2005 based US dollars are around $592 a month according to the International Labour Organization, less than one third of the pay in that sector in the UK, but considerably better than Mexico where the average monthly wage in that sector is only around $456. This sector is low wage even in the USA and Trump’s wealth is in part explained by that reality here in the USA too. The European Travel Commission says that between 2014 and 2025, international tourist arrivals… Read more »
Bálint Magyar is absolutely on the money in his claim that the new nomenklatura in Hungary operates exactly like a crime syndicate. The operations of this particular crime syndicate are however quite unique in Europe, in that the syndicate totally controls parliament, the legislative process, the police and the armed forces, the presidency, and the entire court system including the constitutional court. This is truly a turbocharged and systemic Mafia that has become an organically integral element of the very fabric of governance. It outdoes the crude Russian model by a country mile, and the Mafia in Italy or the US are not even in the race when it comes to the level of organized corruption on high in Hungary. And wonder of wonders, Orbán, Matolcsy and Co achieve all this without any murder and mayhem, and without even a murmur of serious protest from the Hungarian public at large. Orbán, Matolcsy and Co leach and loot purely through legislative and legal chicanery combined with keeping Hungarians sedated with nationalist propaganda, whilst robbing the Hungarian public blind, including skimming to their hearts content from the tens of billions of euros Hungary gets in subsidies courtesy of Brussels. Looks to me… Read more »

Let’s not get carried away.
Crime syndicate, yes.
“Oudoes the crude Russian model”… no. Balint certainly makes no such claim. For all its awfulness, Orban’s mafia state isn’t nearly as bad as Putin’s.


Today 1:26 pm

Yes, you are right. A couple of qualifiers were omitted in my haste. What I meant to write was that in the slickness and cunning of its mode of operation, the Fidesz crime syndicate outdoes the Russians by a country mile. After all, the ruling Russian crime syndicate solves its problems with straight-out murder, brute intimidation, kangaroo courts and the steel fist. The oily Fidesz crime syndicate does not seem to need to resort to these systematic Russian ‘refinements’ in order to achieve its equally nefarious objectives of leaching and looting without restraint.


Spot on , with the correction. The Orbán maffia state didn’t need violence to obtain whatever they wanted.
But the thugs and the mental set for the use of violence are there – from the parading of handcuffed G.Simon, through the Lendvay Str and NEOffice thugs episodes to the routine threats and varbal agression (Bayer Bencsik & co) by various officials. All point in the same direction


When you look at Matolcsi’s behavior – buying up Budapest as if the MNB were his personal bank account – you are left with the conclusion that “this guy is nuts”. And then there are his “universities” of wobblynomics. Gosh, ya wouldn’t read about it.

But wait! When his trial comes round for miss-use of public funds, he will be able, with great credibility, to plead, “Not guilty, by reason of insanity”.

Don’t forget folks, you read about it first in Hungarian Spectrum.


Yes bimbi!

We’ve all come to the conclusion that he is doo lully tap.

Remember his ‘pink spots’ (Mongolian and Japanese?) on Hungarian children to prove their Magyar purity?

Watched him try to operate IT equipment?

Watched his interviews?

Yes – many on HS know he’s a dangerous lunatic. With a very limited intellect.

But then again he comes from a family steeped in Nomenklatura power in the past – it’s very difficult to wrest the levers of power from them – Kövér, Orban…… Ader.

Many are still brooding in the villages ruing the demise of Kadar – the coordinating lieutenant’s of the informer system who passed on the information about the ‘bad little communists’ – used to control society – and stop them getting jobs.

The most informative lieutenant – and most faithful – were the Roman Catholic priests who knew the most sensitive family secrets.

Orban won’t open the files – some believe because his father was a top Nomenklaturate.

If you ever visit the Statue Museum near Budapest you can watch a very good film about the dreadful informer system in one of the outbuildings there – if it’s still available.


Orban’s Data Protection System
I have no idea why anyone thinks there are any files still in existence and intact under Orban’s control that he and his accomplices don’t ever want to see the light of day. Does anyone imagine there’s an honest broker somewhere in the BM, guarding them for the day they might have to be divulged? No one who has been paying attention to Orban’s M.O. in every other respect could possibly imagine that…

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Stevan – I think you are mistaken.

I accept that embarrassing documents close to the administration will have been shredded – we know that’s what Simicska was up to when he headed the tax authority.

The systemic informer sytem will have produced much paperwork which would have been too large to ‘process’ and remove.

Too many people people would have been in the ‘circle’ to allow it to be destroyed.

I believe a great deal exists – possibly some of it forgotten for later discovery.

Gy has also said he will open the files when he can – I think it was even in his manifesto?

If he said that to his knowledge – then there must be some files to release.


You guys shouldn’t forget that many of the meetings of the inner circle has no written — or any, for that matter — documentation, since day one.
So, it’s a “thing” to know, and another to prove in court.


Spectator – nobody should forget that much that has already come out about this gang is more than sufficient to start prosecution. There is reams of evidence out there.

The state prosecutor Péter Polt either does nothing, or undertakes investigations that take so long that the statue of limitation passes before anything gets to court.

I think you and Stefan may just be leaving Orban’s and Fidesz’s hubris out of the equation. These lads believe they are there to stay, and that they cannot possibly be touched.

Everything in the past suggests this actually is the case. I remember well that MSZP and SZDSZ jointly promised to investigate and prosecute every case of embezzlement and corruption from the first Orbán government (1998-2002). What happened to that? Happy End.

I also recall that Ibolya Dávid said she personally knew that MSZP and Fidesz had a deal to split profits (and not prosecute one another).

It looks like the profit sharing part of that deal is dead, anyway.


webber: But half of MSZP is being on Fidesz’ payroll already. How difficult would it be to rig any future investigation when the lefties are starved for cash? C’mon.

No. Fidesz is not worried because fideszniks know exactly that they can always get a good deal with MSZP (of the left-wing).

The left-wing is just too wussy and clueless and leftists would sell their on mother for a good deal. They have been waiting for 10 years and now it’s their turn. F*** investigations and justice, they want cash.

Plus, the leftists have no principles. Now they say they would investigate, but who knows what they will actually do? Fidesz always had goals and made no compromises – this is how it won. The leftists never delivered on anything, for them anything is up for sale.

The leftists could never put together a case that will stand before the courts (also rigged, just in case). Don’t worry, Fidesz had this sorted out.


@leggo = troll, ignore please


Do you have any idea how these MSZPniks operate? Have you ever met some of the most influential or even the second, third lines? Have you tried to deal with them? You make a huge mistake dreaming that MSZPniks care the least bit about holding Orban and co. accountable. MSZP has no stated strategy and principles (never has as far as I can remember) – why would anybody be an MSZP member if such person could not get any satisfaction from reaching those ideological goals? I tell you: because they want to make money. They are more modest than the fideszniks, but they want to make it for sure. And Fidesz knows this all too well, MSZP hasn’t ever disappointed.



Dereliction of duty apart, Peter Polt has actively covered up Fidesz’ obviously criminal deeds by taking over ongoing police investigations and closing them or by declining to prosecute even when the police investigation’s final reports recommended so. This is as abuse of office and serving politics, both crimes and not so difficult to prove on the basis of his record.

That goes for many other cases starting with the criminal way of allotting grants to Orban’s Tokai vineyards – “ours won’t be the largest grant won” case. Many of the legal papering over won’t stand in a proper court. I am sure Orban and his cronies can be jailed, a’la Capone, for some lesser crime. I have also some good ideas how to take it from there. I know what I’m talking about.
As I wrote earlier – the only condition is political will, the rest is professional techniques.

And, yes with the ascend of the Orban mafia, dizzy with power and greed, the rumored 70:30 understandings of old died around 2011, so the criminals are uniformly of orange/brownish color.


If all that could be damaging to Fidesz has been destroyed, why has Fidesz not passed lustration legislation. Indeed, why has Fidesz blocked lustration every time it has been brought before parliament?

I understand that quite a lot is stored in a form that is rather difficult to destroy – magnetic tapes, and such.


Beyond me on how all this stuff goes on and not a peep. Looks as if the next qualification for key government positions will be a brokerage license. I mean it can’t hurt. Anyway… this …

“Every day, you’ll have opportunities to take chances and to work outside your safety net. Sure, it’s a lot easier to stay in your comfort zone… in my case, business suits and real estate… but sometimes you have to take risks. When the risks pay off, that’s when you reap the biggest rewards.”
– Donald Trump

The budding Magyar real estate moguls look like they’ve found someone they can emulate. And certainly they’re pushing the risks……..;-)… Things we could see: Viktor inviting Donny for some ‘vacsora’ to glean some real estate tips. The student will learn from the master.


“The student will learn from the master.”

Who’s who?


— And what does it matter, if I may ask?
Just the same, every which way, believe me.
Or whatever, but still….

The same lowlife greedy bastards!

Any objections?

Thank you..!



Don’t overdo it. Trump of whoever can’t do a fraction of what the little fascist could do under the European parliamentary system where executive and legislative power are often in the same hands. E.g. Imagine Ann Coulter (with a law degree) made a Supreme Court Judge. Happened in Orban’s Hungary.

Then all Western democracies have pretty solid checks and balances and most importantly a lot of democrats who vote.

The key differences between Fidesz and Jobbik are highly instructive. Fidesz is essentially a slick crime syndicate dedicated to looting and leaching on the Hungarian public. Its hold on power is a function of legal and legislative chicanery and pushing unrestrained nationalist dreck to sedate the Hungarian public. Jobbik, on the other hand is an undisguised National Socialist or Nazi formation, the inheritor of the mantle of the pre-war and wartime Arrow Cross (Nyilaskereszt) and Hungarist parties, its main political objective being to prosecute its war on Jews, Israel and the Roma, and firmly ally Hungary with Russia, primarily against the EU and the US. Whilst a marriage of convenience between Fidesz and Jobbik is conceivable should Fidesz lose badly and Jobbik gain significantly in 2018, it seems to me that such a coalition would be unlikely to remain a stable arrangement, given the significantly diverging political and economic objectives of the two. Interestingly, until very recently the level of support Fidesz and Jobbik in the Hungarian electorate roughly matched the level of support of the Party of Hungarian Life (Magyar Élet Pártja) and of the Arrow Cross Party, respectively, on the even of WW2. The question is whether the… Read more »

On second thoughts I am not so certain after all that there would be little or no overlap between the political objectives of Fidesz and Jobbik.

In fact, I could easily conceive of a marriage made in heaven between the two, where Fidesz would continue to enjoy a free hand with looting and leaching on a Hungarian public sedated with nationalist dreck, whilst Jobbik would get a free hand with the culture and education portfolios, and with aggressively prosecuting its war on the Jews, the Roma, Israel, the US, the EU and NATO.


Comparing this to the local elections that we just had in Germany:

There is a certain percentage of crazies which vote for Jobbik or in Germany for AfD or NPD or any Nazi type of party …

But the large numbers that used to vote for the Christian Democrats in Germany have have dwindled – so there might be hope in Hungary too!

Not all Fidesz voters are Nazis, they’re just victims of propaganda – ok, they’re rather stupid too to fall for that nationalistic crap …

Even more OT:
I remember very well my frustration 50 years ago – whatever idiocies the CDU would say or do, at least half of the Schwabs would vote for them – for almost fifty years they stayed in power.
And suddenly we got a Green Prime Minister!
So there is or might be hope for Hungary too! Don’t give up!


Re: that ‘1930’s time warp’

Would be fascinating to put Hungary ‘on the couch’ to explore this affectation towards things ’30’s’. Perhaps it incorporates some sort of sustenance that would appear to be ‘life affirming’ in the Magyar consciousness? Of course the ‘dirty stuff’ has to be sanitized or reinterpreted. And indeed this is being done. Such a fine time in the annals of historical reconstruction namely its unerring drive towards the creation of fictions.

One could think with the way things seem to be going that if there was a park to enable visitors to live in say a 30’s virtual reality it would be as successful as a Disney park. It would appear to bring in SRO (standing room only!) crowds. For as we know people love fairy tales and then to hear ‘once upon a times’. There must be something soothing about it in some quarters.


You are missing the point on the foundations.

The foundations’ endowments of HUF245 billion needs to be invested to preserve the value of the endowment and to produce a reasonable income to sustain operations. It is reasonable that some of the investments be in real estate. As the foundations are public bodies, one would hope that the transactions are both transparent and socially responsible.

THE BIG WORRY WITH THESE FOUNDATIONS is the lack of clarity in and control of their management of proposed day to day operations. Each year one may expect the endowment to produce a surplus >HUF5 billion after allocation to reserves. The question has to be “how is that money spent?”. If the funds are well used on apolitical, serious and broad based activities then all well and good. However, with eastern Europe being what it is there may well be money will be misused and siphoned off in various ways.

TRANSPARENCY is the key and the actions of the government to deny public knowledge and awareness is both suspicious and wrong.


How could taking money out of the National Bank to support foundations possibly be “responsible?”
It is unheard of – this is not done in any country I know of.
That money could be – should be – used to reduce Hungary’s national debt. To that, nobody would object.
This is just a waste of public funds for the Bank Governor’s pet projects.


@CONCERNED “You are missing the point on the foundations…”

Spot on. The half baked Fidesz “elite” sees them as an easy way to siphon out public money.

The key here is rather “PURPOSE”. The primitive notion of central bank independence to do anything they wish is flatly wrong.
The HNB is free to choose the means and act, without interference from government or parliament, towards achieving the goals of it’s charter, but has no license to get involved in anything else. Matolcsy would be hard put to prove this in a proper court and should be jailed for misuse of funds, abrogation of duties and abuse of power, perhaps embezzlement.