Péter Medgyessy

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

Péter Medgyessy
Medgyessy in 2014
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	MSZMP (until 1989) Independent (1989–present)
Spouse	Katalin Csaplár
Children	Gergely Ildikó Anita
Profession	Economist
Website	www.medgyessy.hu

Péter Medgyessy (pronounced [ˈmɛɟɟɛʃi ˈpeːtɛr] ; born 19 October 1942) is a Hungarian politician and former Prime Minister 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 a while. 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, 3 October 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 had withdrawn from nomination. The party won the 2002 elections against conservative Fidesz and incumbent Prime Minister Viktor Orbán by a small majority, and on 27 May 2002, the Hungarian Parliament elected Medgyessy as the new Prime Minister of Hungary.

Medgyessy with President of Poland Aleksander Kwaśniewski, 20 July 2004.

Magyar Nemzet, a newspaper affiliated with the opposition party Fidesz, revealed in June, 2002 that Medgyessy had been acting 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. After a small hesitation, Medgyessy admitted to being a secret agent saying that in the line of duty, he strived to securing Hungary's membership in the International Monetary Fund, which the Soviet Union was opposed to. However, under the circumstances, this sparked controversy all over the country. At first, leaders of the coalition partner SZDSZ had expressed their support for Medgyessy's dismissal as Prime Minister, but the Socialists persuaded them to let Medgyessy stay in office. In light of this, János Kis, the founding president of SZDSZ, left the party in July 2002, referring to the SZDSZ's decision as being in conflict with his moral values. In the aftermath of these events, demonstrators blocked traffic across the Elisabeth Bridge led by György Budaházy demanding that a new tally of the parliamentary election results be conducted.

Medgyessy with George W. Bush on 15 July 2004 at White House

One of the main campaign promises of MSZP was "The Welfare System Change." In implementing this, the Medgyessy government announced a 100-day action program that provided a 50% increase of wage to public employees and a HUF 19,000 allowance to pensioners on a single occasion. Academic scholarships and pensions which had not reached the amount of the minimum wage were also increased. These measures cost HUF 190 billion on the exchange rate. Fidesz and MDF MPs also voted in favour of the bill. During this time, Medgyessy's approval rating was the highest. As a result, the government adopted a second 100-day program afterwards. According to the later critics, the two programs caused HUF 817 billion excess spending in the state budget, while, according to a 2009 report from the State Audit Office, the total annual cost of the 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 prime-ministership, a referendum was held on 12 April 2003 about whether or not, Hungary should join the European Union. All of the major political parties in Hungary, the trade unions, business organisations, churches and media were in favour of Hungary's membership of the EU. In celebration of the results of the referendum held on both banks of the Danube, Medgyessy announced that Hungary is set to 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", which included partnerships and contacts in the European organizations. The European Parliament also called Medgyessy's proposal "anti-democratic" in March, 2004. In the election held in July, 2004, the Hungarian Socialist Party was heavily defeated by Fidesz. After that Medgyessy gradually lost support of the government coalition MSZP-SZDSZ. Word got around MSZP that the party could not win another parliamentary election with him against Viktor Orbán, meanwhile Ferenc Gyurcsány who then was a minister responsible for sports, youth and children in his government, came forward as a potential candidate for prime minister.

Before his resignation, he had fallen out with the coalition partner Alliance of Free Democrats (SZDSZ) accusing them of getting involved in corruption cases and was about to relieve SZDSZ delegate Minister of Economy István Csillag from duty. In response to this, SZDSZ withdrew its support from him after which he declared his resignation, in order to prevent a parliamentary motion of no confidence. His party, the MSZP accepted it that day. 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

Medgyessy was ridiculed by certain segments of the Budapest press because of his allegedly weak rhetorical abilities. In this vein a book appeared with the title of "Medgyessyizmusok" (Medgyessyism, in analogy to Bushism) in 2004.

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.

Medgyessy was also a co-signatory of "the letter of 8", signed by eight European leaders, supporting the U.S. position on Iraq.

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 Legion 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