Hungarian president questions bill closing central bank's books to public scrutiny

By bne IntelliNews March 9, 2016

Hungary's president has sent the government's controversial bill seeking to partially close the books of the central bank to public scrutiny to the constitutional court for review, his office reported on March 9.

Parliament passed on March 1 a bill submitted just the previous day by an MP from the ruling Fidesz party that raises the pay of top officials at the central bank. More controversially, the legislation hands the MNB discretion to withhold data from public scrutiny, in particular pertaining to its spending and the companies it owns.

However, despite being a close ally of Prime Minister Viktor Orban – and therefore Magyar Nemzeti Bank head Georgy Matolcsy - Janos Ader blocked the passage of the bill. The proposed law provoked fury from the opposition, who point out that it seeks to limit information on public money.

The bill gives the MNB the power to withhold information on its companies, if it judges that dissemination would harm the interests of monetary or foreign exchange policy. Six educational foundations, which were granted HUF245bn in 2014, are now fully controlled by their curators, and so their assets no longer qualify as public assets ruled by the laws of public disclosure, the bill states.

The bill would also put the finances of the Budapest Stock Exchange – which after being taken over by the central bank last year approved a new strategy for its medium term development on March 9 – out of reach.

"Having examined the legislation, I have found that the changes are not in line with the constitutional provisions on the handling of public funds and on the freedom of public information," Ader said in a statement on his website.

The MNB posted a record profit of HUF95bn (€309mn) in 2015, despite a spate of purchases – mainly of property and fine art – over the past couple of years. Critics point out that the funds are public, and that should the MNB record a loss, Hungarian taxpayers would have to foot the bill.

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