Bloomberg News

Hungary’s Orban Seeks ‘Total’ Central Bank Takeover, Simor Says

December 15, 2011

Dec. 15 (Bloomberg) -- Hungarian Prime Minister Viktor Orban is seeking a “total takeover” of the central bank with a bill aimed at regulating the institution, Magyar Nemzeti Bank President Andras Simor told the news website Index.

The draft law breaks EU rules and harms the central bank’s independence, Simor said, according to a transcript of the interview posted on the website today.

“This is the latest and almost total takeover of the central bank, since the law vacates and eliminates the mandate of the current president and vice presidents,” Simor said.

The Economy Ministry this week submitted the bill, which would expand the rate-setting Monetary Council to as many as nine members from seven, according to the draft posted on Parliament’s website. The central bank chief would have to cede powers, including naming vice presidents, which would belong to the prime minister and the country’s president.

Hungary may create a new institution through the merger of the central bank and the financial regulator, in which Simor would be a deputy chief, according to a separate ruling-party proposal. Legislators will vote on this tomorrow.

The plan may be aimed at “deflecting attention” from the central bank bill, Simor said.

--With assistance from Andras Gergely in Budapest. Editors: Balazs Penz, Alan Crosby

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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