Hungarian central bank sacks official in charge of foundations

By bne IntelliNews June 28, 2016

The Magyar Nemzeti Bank (MNB) has laid off Norbert Csizmadia, the managing director in charge of fiscal coordination and responsible for the Hungarian central bank's controversial foundations, local media reported on June 28.

Csizmadia's exit from the MNB follows a scandal over the spending of public money by the six foundations. The government closed ranks as pressure mounted on MNB Governor Gyorgy Matolcsy in recent weeks, and Csizmadia now looks to be a scapegoat, sacrificed as public attention is turning away from the controversy.

The MNB told Magyar Nemzet that Csizmadia is leaving the central bank because “the organisational and the operational rules of the MNB are being changed,” and his position will be scrapped. At the same time, he will continue working as the president of one of the foundations, PAGEO.

Following a Constitutional Court ruling that blocked the government's attempt earlier this year to remove the foundations’ spending from public scrutiny, it was revealed that they spent around HUF20bn without announcing public procurement. The foundations received HUF245bn (€790mn) in 2014 from the MNB, officially to promote financial literacy and conduct economic research. However, a significant amount of funds were granted to people close to Matolcsy and other allies of Prime Minister Viktor Orban.

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