Péter Medgyessy

Péter Medgyessy
Prime Minister of Hungary
In office 27 May 2002 – 29 September 2004
President	Ferenc Mádl
Preceded by	Viktor Orbán
Succeeded by	Ferenc Gyurcsány
Member of the National Assembly
In office 15 May 2002 – 15 May 2006
Minister of Finance
In office 1 March 1996 – 8 July 1998
Prime Minister	Gyula Horn
Preceded by	Lajos Bokros
Succeeded by	Zsigmond Járai
In office 1 January 1987 – 15 December 1987
Prime Minister	György Lázár Károly Grósz
Preceded by	István Hetényi
Succeeded by	Miklós Villányi
Personal details
Born	(1942-10-19) 19 October 1942 Budapest, Hungary
Political party	Independent (MSZMP until 1989)
Spouse(s)	Katalin Csaplár
Children	3
Profession	Economist
Website	www.medgyessy.hu

The native form of this personal name is Medgyessy Péter. This article uses the Western name order.

Péter Medgyessy (Hungarian pronunciation: [ˈpeːtɛr ˈmɛɟːɛʃi]; born 19 October 1942, Budapest) is a Hungarian politician and was the fifth Prime Minister of the Republic of Hungary from 27 May 2002 until 29 September 2004. On 25 August 2004 he resigned over disputes with coalition partner Alliance of Free Democrats, but remained caretaker Prime Minister for a 30-day period as required by the Constitution, and a few additional days until his successor Ferenc Gyurcsány was confirmed by Parliament.

Family and studies

He was born into an old Transylvanian noble family in Budapest on 19 October 1942. An ancestor of the family, Miklós Medgyessy de Medgyes worked as a penman for Prince Gabriel Bethlen in the 17th century. Péter Medgyessy's father, Béla Medgyessy was a recorder in the General Assembly of Cluj until the Second Vienna Award, when Hungary reassigned the territory of Northern Transylvania from the Kingdom of Romania. The family moved to Budapest, where Béla Medgyessy worked for the Ministry of Domestic Trade. His mother Ibolya Szolga was an interpreter.

Medgyessy studied theoretical economics at the Corvinus University of Budapest (then called Karl Marx University of Economic Sciences). He graduated in 1966, then returned to receive his doctorate. He is fluent in French and Romanian, and knowledgeable in the English and Russian languages.

He is married to Katalin Csaplár. He has a daughter born in 1969 and a son born in 1970 from a previous marriage. His adopted child is Anita Tornóczky, a well-known anchorwoman in Hungary.

Political career

Early career

Between 1966 and 1982, he held various senior positions in departments of the Ministry of Finance. In 1982, he became Deputy Minister of Finance, and in 1987, he became Minister of Finance in the cabinet of György Lázár. He also held the position in the Károly Grósz administration. As minister, Medgyessy had a significant role in the preparation of two-tier banking system and banking reform. He was replaced by Miklós Villányi on 16 December 1987.

Medgyessy and Péter Bacsó in 1994, Balatonszárszó

Between 1987 and 1990, Medgyessy was the Deputy Prime Minister for Economic Affairs in the Károly Grósz and Miklós Németh cabinets. He brought the law of new capitalist-style tax system to the National Assembly of Hungary. Besides the ministerial position, Medgyessy was also elected a member of the Central Committee (KB) of the Hungarian Socialist Workers' Party (MSZMP). After the dissolution of the ruling communist state party in October 1989, he did not join the newly founded successor organization, the Hungarian Socialist Party (MSZP).

After the end of communism in Hungary, Medgyessy retired from politics for some years. From 1990 to 1996, he was CEO and Chairman of various Hungarian banks, including Paribas Bank Inc. and Hungarian Investment and Development Bank. After Gyula Horn took over the Hungarian government in 1994, he was appointed head of the premier's Advisory Board. Medgyessy later returned to his previous position as Minister of Finance, in March 1996, when he replaced Lajos Bokros, who resigned after the controversial Bokros package. After his term ended, he became Chairman of the Board of Directors of the Inter-Europa Bank, and Vice President of Atlasz Insurance Company; he held these positions from 1998 to 2001. He also taught at College of Finance and Accountancy for fifteen years beside bank official positions. He served as President of the Hungarian Economic Association.

He received the Commander's Cross with a Star of the Order of Merit in 1998, and the highest French decoration, the Chevalier of the Legion of Honour in 2000.

Prime Minister of Hungary

Medgyessy and SZDSZ leader Gábor Kuncze in 2001

The Hungarian Socialist Party (MSZP) nominated him as their non-partisan candidate for prime minister during the seventh congress of the party in June 2001, after former Prime Minister Miklós Németh and MP Sándor Nagy withdrew from nomination. The party narrowly won the 2002 elections against conservative Fidesz and incumbent Prime Minister Viktor Orbán, and on 27 May 2002, the Hungarian Parliament elected Medgyessy as the new Prime Minister of Hungary.

Medgyessy with President of Poland Aleksander Kwasniewski.

Magyar Nemzet, a newspaper affiliated with the opposition party Fidesz, revealed in June 2002 that Medgyessy had acted as a counterespionage officer under the code name D-209 in the III./II. section of the then Ministry for Internal Affairs prior to 1989. Medgyessy admitted to this, stating that his duties lay in the defense of Hungary from the KGB and securing Hungary's International Monetary Fund membership, which the Soviet Union opposed. However, given the political climate of the time, this is highly controversial. Initially, leaders of coalition partner SZDSZ has expressed they support initiation of Medgyessy's dismissal, however Socialists persuaded them to stay Medgyessy as PM. As a result, founding president of SZDSZ János Kis, referring to moral dissension, left the party in July 2002. Unveiling of Medgyessy's past caused mass protests against the cabinet in Budapest, when Elisabeth Bridge was placed under blockade by rioters led by György Budaházy.

Medgyessy with George W. Bush in June 2004 at White House

MSZP won the elections under the slogen of "Welfare System Change", and Medgyessy, unlike his predecessors, has fulfilled his promises. His government announced 100-day action program which provided 50% wage increase to public employees, 19,000 HUF single supplement to pensioners. Academic scholarships and pensions which has not reached the amount of the minimum wage were also increased. These measures cost 190 billion HUF on then exchange rate. Fidesz and MDF MPs also voted the law. Medgyessy's approval rating was the highest during this time, as a result the government adopted a second 100-day program later. According to the later critics, the two programs caused 817 billion HUF excess spending, while, according to a 2009 report from the State Audit Office, total annual cost of housing subsidies rose from roughly HUF 50 billion (EUR 184.14 million) a year in 2000 to HUF 255 billion (EUR 939.14 million) in 2005.

Under his premiership the 2003 Hungarian European Union referendum took place on 12 April 2003 to decide whether Hungary should join the European Union. All of the major political parties in Hungary, the trade unions, business organisations, churches and media supported membership of the EU. Medgyessy announced the result at a celebration on the banks of the Danube telling them 'Allow me to officially announce that the Hungarian republic will be a member of the European Union.'

In early 2004, Medgyessy proposed a joint electoral list with the participation of all parliamentary parties for the upcoming European Parliament election. The coalition partner SZDSZ and all opposition parties rejected Medgyessy's idea. However, during a meeting of leaders of the four parliamentary groups, all parties agreed to a "national minimum", partnerships and contacts in the European organizations. The European Parliament also called Medgyessy's proposal as "anti-democratic" in March 2004. In the election in June 2004, the Hungarian Socialist Party was heavily defeated by Fidesz. After that Medgyessy gradually lost support in the government coalition of MSZP and SZDSZ.

On 19 August 2004, due to impaired confidence in him by the coalition partner Alliance of Free Democrats (SZDSZ), which strongly opposed the replacement of Minister of Economy István Csillag, he declared his resignation preventing a parliamentary motion of no confidence. His party, the MSZP accepted it on the same day, so in effect the government bowed out, which is without precedent in the history of Hungary's young democracy. The resignation took effect on 25 August, and in accordance with the Hungarian Constitution he became "acting Prime Minister" for the next 30 days. In the meantime his successor, Ferenc Gyurcsány, acted on his behalf. Medgyessy stepped down as Prime Minister in August 2004 and was succeeded by Gyurcsány.

Controversies

He was one of the primary humour sources for the press because of his weak rhetorical abilities and his style during his governance. From his mistakes and his bad draughtings a book was published with a title of Medgyessyizmusok (Medgyessyism, in analogy to Bushism).

Medgyessy with Vladimir Putin

Referring to Hungarian exporters' interests, he opted to decrease the central value of the floating exchange rate range of the forint. Investors regarded this as an incomprehensible step and a flawed piece of economic policy and started selling forints and Hungarian government bonds, which led to considerable interest rate hikes by the National Bank of Hungary.

Fulfilling the promise of "Change of welfare regime", the slogan of his campaign in the 2002 elections, the Medgyessy government increased wages of civil servants by 50%, and increased allowances for university students and pensioners, the latter group also receiving a one-time pension supplement. Economists criticised this move, calling it an irresponsible drain on the budget, amounting to nearly 190 billion Forints, in their opinion purely to increase the administration's popularity.

During his government, political attacks were launched against some independent senior civil servants who had been appointed by the previous Viktor Orbán cabinet. Court rulings subsequently established that the head of the Hungarian Energy Office and the chairman of the Hungarian Statistical Office were removed from their positions unconstitutionally and illegally. The chief of the Hungarian Financial Supervisory Authority was removed without legal challenge, however without any material basis related to his performance in office.

Life since government

After his resignation, he continued to serve as a Member of Parliament in the role of travelling Ambassador, "to make sure Hungary can become a successful member of the most important international alliances including the European Union", as he stated. He did not run as MP in the 2006 parliamentary election. He was called back from travelling ambassador position by Ferenc Gyurcsány in mid-2008, after he openly criticized the government in some of his interviews.

Medgyessy was interviewed by Index.hu on the occasion of tenth anniversary of his resignation on 27 August 2014, where he called his successor, Gyurcsány as "Trojan Horse" and "traitor". According to Medgyessy, he was removed from the position of Prime Minister after a secret agreement between MSZP and SZDSZ leaders, László Kovács, Ildikó Lendvai, Katalin Szili and Gábor Kuncze. He also said he would do 100-day action program again, however he felt sorry for not revealing his D-209 agency past just before the 2002 elections.

Awards and merits

He received the Commander's Cross with a Star of the Hungarian Order of Merit in 1998, and the highest French decoration, the Chevalier of the Legion of Honour in 2000. In 2002 he received the Grand Cross of the Belgian Order of the Crown and the Gold and Silver Star of the Japanese Order of the Rising Sun, and in 2003, the Grand Cross of the Order of the Merit of Chile and the Royal Norwegian Order of St. Olav. In 2004 he became a Grand Officer of the French Lggion of Honour and received the German Federal Cross of Merit.

Selected publications

• Csizmadia, Ervin: A Medgyessy-talány. A nemzeti középtől (a) végig. Századvég Kiadó, Budapest, 2004.
• Csizmadia, Ervin: "Elképzeltek maguknak egy miniszterelnököt". Csizmadia Ervin interjúja Medgyessy Péterrel (interview). Századvég Kiadó, Budapest, 2004.
• Medgyessy, Péter: Polgár a pályán. Kossuth Kiadó, Budapest, 2006.
• Perger, István (ed.): Medgyessy. Ringier Kiadó, Budapest, 2004.

External links

• Official site

Political offices
Preceded by István Hetényi	Minister of Finance 1987	Succeeded by Miklós Villányi
Preceded by Lajos Bokros	Minister of Finance 1996–1998	Succeeded by Zsigmond Járai
Preceded by Viktor Orbán	Prime Minister of Hungary 2002–2004	Succeeded by Ferenc Gyurcsány