The economy minister-designate of Hungary’s next government Gyorgy Matolcsy criticised the work of all financial regulators in state control in an interview printed in national daily Nepszabadsag on Tuesday.
Matolcsy said that “the National Bank of Hungary has committed serious professional errors and has not learned from them”. He added that not only Governor Andras Simor but all members of the Monetary Council should resign because of the decisions they made over the past year and a half.
The incoming minister criticised the central bank and the financial market regulator PSZAF. He blamed the central bank for upsetting the balance of its objectives from October 2008 and keeping only the fight against inflation in view, “a battle which it has lost”.
Hungary’s annual inflation was 5.9 percent in March 2010.
Matolcsy said that informal talks with the IMF and EU officials about modifying Hungary’s budget deficit target of 3.8 percent of gross domestic products were already under way.
Both organisations expect the incoming government to announce a new economic policy. Should this policy provide an authentic picture of the actual situation and envisage appropriate measures, the outcome of talks will be positive, he added.
Matolcsy said that the new deficit target could fall to between 5 and 6 percent of GDP, narrowing his own early May projection for a 4.5-6.5 percent band.
How is it we have inflation, the currency only
recently “devalued” slightly, while the cost of
petrol since last year has appreciated by at least
15% and doesn’t seem to drag other items up 1/2 as
much?
Perhaps Matolcsy is right that MNB have failed to
get inflation down; but people’s incomes (if they’re
still employed) aren’t going up. Just their
disposable income has gone down.
How Hungary’s government and financial institutions
function at all is a mystery. In the provinces nobody gives a fuck about either. They live their lives the same way as communities did in the tenth century. Local administrations are certainly antediluvian.
It appears that, in Hungary, they like to play both ends against the middle and, fuck the “middle man”
if at all possible.