Central bank ploughs money into teaching economics

(MTI) – The National Bank of Hungary plans to inject 200 billion forints (EUR 638m) into four foundations with the aim of “strengthening the quality of higher education”, central bank governor Gyorgy Matolcsy told online newspaper vs.hu.

The central bank plans to launch new courses in economics intended as alternatives to the “failed neoliberal studies” taught elsewhere, Matolcsy told the paper’s Thursday issue.

Business weekly HVG said the central bank had ploughed the equivalent of one and a half times the annual budget of Hungarian public higher education “to promote its own unorthodox teachings”.

According to the Central Statistical Office, state spending on higher education came to 123.5 billion forints last year.

Matolcsy told vs.hu that Hungary’s university education in economics and finance needs an upheaval, and to help this aim new institutions and teachers of a new intellectual leaning are needed.

Matolcsy emphasised that the money earmarked for this purpose would come out of the central bank’s profits and the taxpayer was not liable in any way.

Asked whether the bank planned more real estate purchases similar to Eiffel Palace in Budapest or a provincial wellness hotel, Matolcsy said this would be the case if a positive investment opportunity or a solution to a functional need was found.

As a result of the 24-month base rate easing cycle, the central bank was able to save 280 billion forints in two years, Matolcsy told the paper. In addition, it helped save the business sector hundreds of billions of forints through lower interest rates, and in the longer term, central budget savings of over 300 billion forints could be achieved thanks to lower government bond yields.

He said because of the 280 billion forint savings, the central bank was able to finish in the black in 2013 and expects to do the same in the coming years.

The opposition E-PM party alliance said in response to HVG’s article that Matolcsy “is running amok, and it is in our shared interest to stop him”.

Levente Papa, the party’s economic spokesman, told a press conference that the way the central bank had created its foundations and the magnitude of their financing was “unprecedented”. The bank has put its own managers on the foundation’s boards of trustees, including Matolcsy himself, Papa said. The amount spent on the foundations is the right size for a monetary stimulus package, he added.

Source: http://mtva.hu/hu/hungary-matters