Constitutional Court blocks law to hide central bank spending

The court ruled that legislation allowing the MNB to classify the way its foundations spend public money was against the Constitution because public spending must be transparent. The court further ruled that the legislation was against the Constitution because it would have made the finances of the foundations secret with a retroactive effect, according to reports. 

The legislation to classify the central bank spending was pushed through Parliament on March 1 in an expedited procedure after a journalist sued to gain access to details of the spending by the MNBʼs Pallas Athene Domus Animae Foundation.

In a rare break with the wishes of the government that appointed him, Hungarian President János Áder on March 9 declined to sign that legislation, as well as a measure to make the operations of the Post Office confidential. Áder referred the legislation to the Constitutional Court, charging the court with determining whether the proposed law would violate the Hungarian Constitution. The court gave their ruling today.

Meanwhile, the government had appealed to block the journalistʼs request for information. But yesterday the Supreme Court ruled against the government, saying existing laws require the MNB to reveal its spending. Since the Constitutional Court ruled today that a new law to allow the MNB to keep spending confidential would be unconstitutional, the central bank apparently needs to open up the books of the Pallas Athene Domus Animae Foundation.

The foundation was set up with the stated purpose of creating a school to teach the “unorthodox economics” promoted by central bank Governor György Matolcsy, but it has also been buying landmark properties around Budapest.

As for the legislation on Post Office spending, the Constitutional Court ruled that Magyar Posta does have the power to make business secrets confidential, if the confidentiality does not go against the freedom of information rules in the Constitution.