February 22, 2017 / 5:19 PM / 5 months ago

Hungary central bank chief says major NATO ally tried to topple government

3 Min Read

BUDAPEST, Feb 22 (Reuters) - A major NATO ally of Hungary's tried to topple the Hungarian government and the central bank in 2015 and the collapse of brokerage Quaestor the same year was part of that plot, National Bank of Hungary Governor Gyorgy Matolcsy said on Wednesday.

He did not name the country, and the central bank declined to comment when asked to respond by Reuters.

Quaestor collapsed early in 2015 after it was found to have issued at least 150 billion forints ($500 million) more than it was allowed under its issuance programme.

Two other brokerages faced regulatory action within weeks, and the scandal weighed on the forint.

"It fits into the activity conducted from the Budapest embassy of a large NATO ally country, that aimed to topple the government and the central bank and started in the autumn of 2014," Matolcsy told parliament.

The central bank, as financial supervisory authority, suspended the brokerages' licences.

Matolcsy, a close ally of authoritarian Prime Minister Viktor Orban's, has been head of the National Bank of Hungary since 2013. Orban came to power in 2010.

The bank has cut its main interest rate to a record low of 0.9 percent since then, and carried out a massive funding for lending programme to boost the economy.

Socialist lawmaker Attila Mesterhazy called on Matolcsy to name the country as an issue of "national sovereignty" and his party called for a parliamentary committee to be set up to investigate the issue.

"I demand that the central bank governor clarify which of our allies he has just accused," Mesterhazy said, noting that it could not be Russia, which does not belong to NATO.

Mesterhazy said that Matolcsy might have referred to the United States in that case.

Orban's government has had smooth relations with its main NATO allies, Germany and Britain.

Orban's diplomatic spats with the United States since he came to power in 2010 have included a travel ban on six Hungarian officials in 2014 over corruption allegations. The move was seen as another warning to Budapest to reverse policies Washington regarded as threatening democratic values. (Reporting by Krisztina Than; Editing by Louise Ireland)

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