* Fidesz to fill half of vacant MPC spots-Socialist source
* Ferenc Gerhardt, Andrea Bartfai-Mager to be nominated
* Both economists held cbank posts under former Gov Jarai
* Picks positive, delay in nominations harmful-analyst
(Releads, adds byline, analyst comment)
By Krisztina Than and Gergely Szakacs
BUDAPEST, March 6 Hungary's ruling party will
nominate two economists with central bank experience to the
Monetary Council on Monday, restoring the functionality of the
rate-setting panel but leaving half of the open spots vacant.
Analysts have closely followed the nomination process for
clues whether the ruling Fidesz party, which shocked markets
with a string of unorthodox measures since taking power in May,
will appoint economists supportive of its pro-growth agenda.
The seven-strong Monetary Council has been reduced to just
three members, Governor Andras Simor and his two deputies,
since the mandates of four policy makers expired on March 1,
leaving the panel without a quorum to make decisions.
Government-sponsored legal changes, sharply criticised by
the European Central Bank (ECB), gave parliament's economic
committee, controlled by Fidesz, the right to fill the
vacancies but so far there are only two candidates for the four
Istvan Jozsa, deputy head of parliament's economic
committee, which is in charge of the nomination process, told
Reuters on Sunday that Fidesz would nominate Ferenc Gerhardt
and Andrea Bartfai-Mager to the rate-setting panel.
Jozsa added that the changes to the nomination rules which
the government pushed through earlier this year, were totally
Antal Rogan, a lawmaker of the ruling Fidesz party and
chairman of the committee, was not immediately available for
comment. The central bank's press office declined comment.
Both economists held posts at the central bank under
previous Governor Zsigmond Jarai, who was succeeded in 2007 by
Andras Simor -- a needle in the eye of the new Fidesz
government for his former investments and conduct of monetary
Jarai currently leads the central bank's supervisory board
and criticised pay levels and communications spending at the
bank on Friday, opening a new chapter in the feud between the
centre-right government and Simor. [ID:nLDE7231TQ]
The nominations, subject to the approval of parliament due
later on Monday, will restore the size of seven-strong Monetary
Council to the minimally required five policy makers.
That would give Fidesz three more weeks to find two other
nominees before the next scheduled policy meeting on March 28.
Parliament's economic committee meets at 0830 GMT on
Central bank Governor Simor holds a news conference about
the bank's finances at 1300 GMT.
Gerhardt, a 66-year-old economist, is deputy chief
executive of Hungarian development bank MFB and worked as a
director at the central bank between 2005 and 2007.
Bartfai-Mager worked at the financial stability department
of the central bank before joining the competition council of
the Hungarian Competition Office in 2007, where she had worked
For a factbox on the nominees, see [ID:nLDE7250KE]
Gergely Suppan, analyst at Takarekbank welcomed the fact
that the nominees both had central bank experience but added
that a further delay in the nomination was detrimental.
"It's good news in terms of this step restoring the
functionality of the council, however, I just cannot understand
what the delay is all about," he said.
"These two names are positive in that they have central
bank experience, especially at the financial stability
department, but the procrastination (about the remaining
appointments) is negative."
Local media has reported Fidesz was having difficulty
filling the vacancies on the Monetary Council after recent pay
Analysts said the new Council was unlikely to embark on an
easing campaign and would act cautiously, taking into account
inflation risks and the forint's exchange rate as a weak forint
would hurt borrowers who took out foreign currency loans.
The central bank raised interest rates 75 basis points to 6
percent NBHI between November and January before pausing last
(Reporting by Krisztina Than and Gergely Szakacs, Editing by