Central Bank’s education programme under scrutiny

Hungary's central bank is spending vast sums on an economics education programme, partly funded by printing new money that must be invested in government bonds, raising questions about whether the move represents a form of backdoor government financing, writes Margit Feher for The Wall Street Journal.

The National Bank of Hungary has spent 200 billion forints (US$830 million) on establishing five foundations to support the higher education of the next generation of Hungarian economists, it said. That sum is equal to about 0.7% of the country's gross domestic product, according to calculations by The Wall Street Journal, and exceeds the government's higher education budget for this year, local media reported.

The education foundations, whose executives and supervisory board members are mostly monetary policy-makers, people close to the governing Fidesz party and other central bank top officials – although they cannot receive an honorarium – can only spend the money on buying government bonds. The foundations will then use the proceeds from those investments to fund themselves and provide the education.
Full report on The Wall Street Journal site