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Central Bank Head Matolcsy: Hungary Should Follow Estonia’s Example

Márton Jász 2021.02.23.

The head of the National Bank of Hungary, György Matolcsy, recently criticized the government’s approach towards economic policy, claiming that currently the country does not have a unified and clear vision for the future. He added on to this line of thought by arguing that the Estonians performed far better than Hungary in terms of economic catch-up, and that we should follow their example. 

“Why not look for a way to follow the Estonian pattern?” Matolcsy asks in his opinion piece for novekedes.hu.

The reason behind the governor’s argument lies in the fact that between 2009 and 2020, Estonia has caught up to the EU average from 64.6 percent to almost 84 percent. This growth has brought the country closer to the level of developed European countries by almost 20 percentage points.

In comparison to Central European countries, Poland performed with 13 percentage points, Hungary and the Czech Republic less than 10 percent, and Slovakia even dropped 2 percentage points.

But what are the reasons behind Estonia’s astonishing performance?

According to Matolcsy, the performance of Estonians can only be partially explained by the fact that they did not have to deal with high public debt after the regime change. An additional reason could be, he argued, that Estonia had a strong national vision after independence, which resulted in a two-fold strategy.

First, their national policy primarily focused on Western integration, with a breakup from the Soviet imperial past. Secondly, in terms of their economic policy, the Estonians catch-up was “built on the digital revolution” and soon became one of its leaders. Education, companies, households, and public administration have all been digitized. 99 percent of all services provided by the Estonian “digital state” can now be be arranged online.

Central Bank Head Matolcsy: Hungary Does Not Have a Unified and Clear Vision
Central Bank Head Matolcsy: Hungary Does Not Have a Unified and Clear Vision

Today, Hungary does not have a unified and clear vision, the head of the Hungarian National Bank György Matolcsy criticized the government’s economic policy in an article on Növekedés.hu. Matolcsy claims that even though there are many examples of catching up to do in front of us, we do not recognize them. The political leaders […]Continue reading

For Hungary, the Estonian example offers multiple lessons.

“We need a strong vision, a good strategy, a complete digital transition, high investment rate, sustained dynamic productivity growth, wage catch-up, repatriation of workers abroad, low public debt, a strong technology sector, many innovations and world-class universities,” Matolcsy concluded.

Featured image by Zsolt Szigetváry/MTI