A technocrat from the countryside

‘I proposed Mihály Varga for the post of central bank president and he accepted,’ Orbán said in the usual Friday morning interview for public radio. The proposal is already in parliament. The Prime Minister praised his Finance Minister as ‘the economic politician and economist with the greatest wealth of experience in Hungary’.

The Finance Minister nominated to succeed György Matolcsy wrote on social media that he was honoured by the Prime Minister’s request. He said he was happy to take on the new challenge in order to fight for the stability and advancement of Hungary in this position as well.

The technocrat from the countryside

Mihály Varga was born in Karcag (Jász-Nagykun-Szolnok County) in 1965. He studied domestic trade at the Budapest University of Economics (now Corvinus University) and worked for various companies and taught classes at the Szolnok School of Economics in the 1990s.

At the end of 1988, Varga joined Fidesz, whose party organisation he founded in Szolnok County. He has been a member of parliament for the current governing party since 1990. From 1994 to 2013, he served as party deputy with a brief interruption. In parliament, he led the special committee on the so-called bank consolidation and – again in opposition – the budget committee from 2002 to 2010, while also serving as Fidesz deputy whip.

During the first Orbán government, Varga was Secretary of State in the Ministry of Finance from the outset and was first appointed Minister of Finance in 2001. In the second Orbán government, he initially held the post of State Secretary in the Prime Minister’s Office from 2010. In mid-2012, he was appointed minister without portfolio to lead the talks on the repayment of the IMF and EU bailout loans following the bankruptcy of the Gyurcsány government. From March 2013, Varga continued his work in the government as Minister of Economy – his predecessor Matolcsy moved to head the central bank at the time. After five years in this position, Orbán made him his deputy prime minister in his fourth government in May 2018; as finance minister, he was also responsible for shaping economic policy. Márton Nagy, former Vice President of the MNB, took over the latter role in the fifth Orbán government from mid-2022.

Probably the better choice

Nagy resigned from the central bank in 2020 in a dispute with MNB President Matolcsy; since then, the personal duel between these two men has poisoned the harmony that previously prevailed in the control centres of economic policy. Although Orbán had also brought Nagy into play as a possible successor to Matolcsy, observers considered Varga to be the favourite for several reasons. The finance minister is regarded as a sober technocrat who will lead the National Bank without any escapades. Like Matolcsy, Nagy wants to shine as a strategist and is constantly announcing new plans – the Prime Minister is expected to grant him far-reaching powers to shape economic policy as early as January. From the perspective of the MNB’s specialised apparatus, whose expertise is undisputed, the ‘career changer’ Varga is also likely to be more agreeable than the ‘returnee’ and Matolcsy rival Nagy.