Accusations of Embezzlement, Upgrades, Reproaches and Honours in Hungary

Hungary, 08 May - 04 Jun 2016
Governor of Hungarian Central Bank accused of funneling funds to friends and family ++ Fitch upgrades Hungary’s credit rating to investment grade ++ Infringement procedure against Hungary over segregation of Roma children in schools ++ Bocuse d’Or: Hungarian Tamás Széll crowned Best European Chef. by Robert Talo
Governor of Hungarian Central Bank accused of funneling funds to friends and family

The widely read economic news portal Bloomberg has recently published a report about accusations of embezzlement against György Matolcsy, the governor of the Hungarian National Bank (MNB), the country’s central bank. He is accused of funneling funds to friends and family members. Allegedly, Matolcsy has funnelled almost 1 billion euros to six foundations since he took office in 20113. He has also been implicated for rewriting the rules for central banking in the European Union.

According to Bloomberg, the MNB governor has also been criticized for buying expansive work of art and other items unrelated to his mandate. Otilia Dhand, a political risk analyst at Teneo in Brussels, a global advisory firm, pointed out that the activity of Matolcsy goes beyond the usual allegations of crony capitalism – even by eastern European standards.

The green opposition party Another Politics is Possible (LMP) shares this opinion. Experts of the party state that the central bank and its foundations are doing business with offshore companies including property purchases. They say the bank has become a “five-star hotel for offshore knights ”.

György Matolcsy reacted to the accusations by stating that he and the National Bank are under political attack just because of their successes. Meanwhile, the governor enjoys the full support of the pro-government press. Among other things, he is praised for bringing down inflation close to zero and reducing the prime interest rate to just over one per cent.

Fitch upgrades Hungary’s credit rating to investment grade

Fitch, one of the big three credit rating agencies, improved Hungary’s credit rating to investment grade with a stable outlook. The US based agency raised Hungary’s sovereign rating from “BB“ to “BBB-”. However, an upgrade from Standard and Poor’s, another major rating agency, is not expected this year. The upgrade is good news for Hungarian citizens. It means that the state could spend less on debts and would have more financial resources for other purposes. In case of an additional upgrade by a different agency the savings could reach 40 to 60 billion forints (126 to 190 million euro) in the next twelve to eighteen months.

Fitch’s upgrade is the most recent step in the long healing process for Hungary’s financial and economic affairs after the International Monetary Fund (IMF) had bailout the country in 2008. Recession and the nation’s poor credit rating encouraged Hungarian Prime Minister Viktor Orbán (Fidesz party) to nationalize of private pension assets worth 11 billion dollars. Further, he introduce Europe’s highest bank levy. The Hungarian government has shad households of toxic foreign-currency loans, bounded the budget deficit and trimmed the bank tax to improve solvency and improve investment climate.

Infringement procedure against Hungary over segregation of Roma children in schools

The European Commission (EC) has introduced an infringement procedure against Hungary due to the segregation of Roma children in schools, the commission announced on Thursday, May 26.The EC has sent a warning letter to the Hungarian government to bring Hungarian legislation on equal treatment and education in line with EU directives on racial equality.

The commission stated concerns over Hungarian legislation and administrative practices on several accounts. Based on these regulations, Roma children are placed in segregated special classes in disproportionately high numbers. The aim of the procedure is to ensure that Roma children take part in education under the same conditions as children of the Hungarian majority. This determines their participation in work opportunities which is unalterable for the full social integration of the Roma population. Similar procedures had been introduced against Czechia and Slovakia in recent years.

Benedek Jávor, the leader of the opposition party Dialogue for Hungary (PM) welcomed the EC’s measures. “Changing the law is only one step and far from enough”, he stated. The government of Fidesz party and Christian Democratic People’s party should also help practices for integration of Roma children.

However, the national conservative government shows no willingness to change its policy. On the contrary, Janos Lazar, Minister of the Prime Minister's Office, is quoted as saying: “I have no idea where the European Commission gets its information about which child is Roma and which one is not.” He also stated that the infringement procedure was introduced based on reports by Hungarian civil organisations. According to PM Viktor Orbán and his party Fidesz, Brussels is trying to punish Hungary over its stance on migration by refusing to spend integration funding for immigrants .

Correspondent to a survey conducted in the county of Heves in 2003, 98 percent of children in segregated classes were Roma – even though only 12 percent of the county’s population was regarded as Roma.

Bocuse d’Or: Hungarian Tamás Széll crowned Best European Chef

Tamás Széll has won the Bocuse d’Or Europe 2016, the most prestigious European gastronomy award. Performing live in front of hundreds of enthusiastic supporters in the Hungarian capital city of Budapest, the 34 year-old chef outdid 19 competitors. Széll won the unanimous support of the international jury by preparing a leg of deer grilled on charcoal with Hungarian spices, mushrooms and smoked “mangalica” pork fat (Hungarian spring forest theme), a lightly salted Sterlet and langoustine glazed with pickled ramson seeds and brown butter (Hungarian spring revival).

After long months of practice, Széll and 10 other European candidates have earned their qualification for the World Final in Lyon, France in January 2017. The event will also mark the 30th anniversary of this contest that was created by Paul Bocuse, the leader of haute cuisine.

Bocuse d’Or Europe has never been as popular in Hungary before. The enthusiasm and support of many Hungarians have boosted the show and helped in promoting Hungarian gastronomic and cultural assets.

Social Media