Miklós Németh (, born 24 January 1948) is a retired Hungarian
economist
An economist is a professional and practitioner in the social sciences, social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
and politician who served as
Prime Minister of Hungary
The prime minister of Hungary () is the head of government of Hungary. The prime minister and the government of Hungary, Cabinet are collectively accountability, accountable for their policies and actions to the National Assembly (Hungary), Par ...
from 24 November 1988 to 23 May 1990. He was one of the leaders of the
Socialist Workers' Party, Hungary's
Communist
Communism () is a sociopolitical, philosophical, and economic ideology within the socialist movement, whose goal is the creation of a communist society, a socioeconomic order centered on common ownership of the means of production, di ...
party
A party is a gathering of people who have been invited by a Hospitality, host for the purposes of socializing, conversation, recreation, or as part of a festival or other commemoration or celebration of a special occasion. A party will oft ...
, in the tumultuous years that led to the collapse of communism in
Eastern and
Central Europe
Central Europe is a geographical region of Europe between Eastern Europe, Eastern, Southern Europe, Southern, Western Europe, Western and Northern Europe, Northern Europe. Central Europe is known for its cultural diversity; however, countries in ...
.
He was the last Communist Prime Minister of Hungary.
Early life
Németh was born into a poor Catholic peasant family on 24 January 1948 in
Monok, the birthplace of the revolutionary
Lajos Kossuth
Lajos Kossuth de Udvard et Kossuthfalva (; ; ; ; 19 September 1802 – 20 March 1894) was a Hungarian nobleman, lawyer, journalist, politician, statesman and governor-president of the Kingdom of Hungary during the Hungarian Revolution of 1848, r ...
. He was of
Swabian origin on his maternal side, the Stajzs had been resettled by the aristocrat
Károlyi
The House of Károlyi is the name of an old and prominent Hungarian nobility, Hungarian noble family, whose members held the title of Count in Kingdom of Hungary, Hungary, awarded to them on 5 April 1712 by Charles VI, Holy Roman Emperor. They clai ...
family in the 18th century. Németh's grandfather was
deported
Deportation is the expulsion of a person or group of people by a state from its Sovereignty, sovereign territory. The actual definition changes depending on the place and context, and it also changes over time. A person who has been deported or ...
from Monok to the
Soviet Union
The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...
in Autumn, 1944, and only in 1951 was he able to return home. His father András Németh, a devout Catholic, fought in the
Battle of Voronezh and survived
the Soviet offensive by the
Don River
The Don () is the fifth-longest river in Europe. Flowing from Central Russia to the Sea of Azov in Southern Russia, it is one of Russia's largest rivers and played an important role for traders from the Byzantine Empire.
Its basin is betwee ...
in early 1943. He returned to Hungary in 1946. That kind of dual identity was present in Németh's political life, since he had a Christian family background behind his Communist party career. For instance, when he married Erzsébet Szilágyi in 1971, they also had a church wedding after their
civil marriage
A civil marriage is a marriage performed, recorded, and recognized by a government official. Such a marriage may be performed by a religious body and recognized by the state, or it may be entirely secular.
History
Countries maintaining a popul ...
. Németh was 8 years old during the
Hungarian Revolution of 1956
The Hungarian Revolution of 1956 (23 October – 4 November 1956; ), also known as the Hungarian Uprising, was an attempted countrywide revolution against the government of the Hungarian People's Republic (1949–1989) and the policies caused by ...
. He had just isolated experiences about those events; his parents listened to
Radio Free Europe
Radio Free Europe/Radio Liberty (RFE/RL) is a media organization broadcasting news and analyses in 27 languages to 23 countries across Eastern Europe, Central Asia, the Caucasus, and the Middle East. Headquartered in Prague since 1995, RFE/RL ...
,
1848
1848 is historically famous for the wave of revolutions, a series of widespread struggles for more liberal governments, which broke out from Brazil to Hungary; although most failed in their immediate aims, they significantly altered the polit ...
flags were erected in the main square of the village, and the local party secretary was arrested and revolutionaires forced him to recite
Lord's Prayer
The Lord's Prayer, also known by its incipit Our Father (, ), is a central Christian prayer attributed to Jesus. It contains petitions to God focused on God’s holiness, will, and kingdom, as well as human needs, with variations across manusc ...
. Németh could not have known the whole truth of the events due to state propaganda and concealment until his studies in the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
.
After finishing elementary school in
Szerencs, in 1962 Németh attended
Berzeviczy Gergely School of Trade and Catering in
Miskolc
Miskolc ( , ; ; Czech language, Czech and ; ; ; ) is a city in northeastern Hungary, known for its heavy industry. With a population of 161,265 as of 1 January 2014, Miskolc is the List of cities and towns in Hungary#Largest cities in Hungary, ...
, where theologian and historian Gábor Deák was one of his teachers. He took his final exam in 1966, after that he was admitted to the
Karl Marx University of Economics. Uniquely in the academic system of the communist era, the university had a certain degree of autonomy due to the powerful and influential rector Kálmán Szabó, who had participated in the preparation and production of a major economic reform, called the
New Economic Mechanism in 1968, which introduced some market and capitalist elements to the Hungarian economic system. Under this reformist leadership, a new economist intelligentsia emerged, instead of
Orthodox Marxist
Orthodox Marxism is the body of Marxist thought which emerged after the deaths of Karl Marx and Friedrich Engels in the late 19th century, expressed in its primary form by Karl Kautsky. Kautsky's views of Marxism dominated the European Marxist ...
experts, which were already acquainted with the Western mainstream curriculum and they had the opportunity to study abroad.
Németh graduated in 1971, after that he became an assistant lecturer, later a full-time university professor. Németh won a scholarship of
International Research & Exchanges Board to the United States for the 1975/76 semesters, where he subsequently attended
Harvard University
Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...
. He learned
decision theory
Decision theory or the theory of rational choice is a branch of probability theory, probability, economics, and analytic philosophy that uses expected utility and probabilities, probability to model how individuals would behave Rationality, ratio ...
,
cost–benefit analysis
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits ...
and
business law
Commercial law (or business law), which is also known by other names such as mercantile law or trade law depending on jurisdiction; is the body of law that applies to the rights, relations, and conduct of persons and organizations engaged in ...
. Németh later was accused by hard-line communist leaders who said that the
Central Intelligence Agency
The Central Intelligence Agency (CIA; ) is a civilian foreign intelligence service of the federal government of the United States tasked with advancing national security through collecting and analyzing intelligence from around the world and ...
(CIA) had recruited him during his Harvard year, however he called these charges "nonsensical".
Early career
Returning home, Németh left the University of Economics and worked for the National Planning Office (OT) from 1977. He also joined the
Hungarian Socialist Workers' Party
The Hungarian Socialist Workers' Party (, , MSZMP) was the ruling Marxist–Leninist party of the Hungarian People's Republic between 1956 and 1989. It was organised from elements of the Hungarian Working People's Party during the Hungaria ...
(MSZMP) during this time. He was a theoretical researcher until 1978, when he was transferred to the office's Economics Department. There his role was preparation of shortened plan documents on industrial, agrarian, social etc. surveys, drafts which were dispatched to the
Council of Ministers
Council of Ministers is a traditional name given to the supreme Executive (government), executive organ in some governments. It is usually equivalent to the term Cabinet (government), cabinet. The term Council of State is a similar name that also m ...
. According to Németh, he then became familiar with the economic reality and the true extent of the huge
public debt
A country's gross government debt (also called public debt or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occu ...
. The Communist regime and the
Hungarian National Bank
The Hungarian National Bank ( , MNB) is the central bank of Hungary and as such part of the European System of Central Banks (ESCB). It was established in 1924 as a successor entity of the Austro-Hungarian Bank, under the economic assistance ...
led a double bookkeeping, even the majority of the party's Political Committee had no information on the real data. Németh began working for the Socialist Workers' Party Economic Department in 1981. He and
Ferenc Bartha negotiated with Alan Whittome and
Jacques de Larosière
Jacques de Larosière de Champfeu (; born 12 November 1929) is a French former civil servant who served as the president of the European Bank for Reconstruction and Development from 1993 to 1998. He previously served as the governor of the Banque ...
, representatives of the
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) in 1982, but Németh also took part in a conference to resort to loans from
China
China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
, bypassing the Soviets.
Németh was appointed Head of Economic Department in 1986, when
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet and Russian politician who served as the last leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
became leader of the Soviet Union. Németh, who knew the new Secretary-General earlier, anticipated that a new period would go with social, political, and economic reforms. Németh was promoted to the
Central Committee as Secretary in charge of Economic Policy in June 1987. In May 1988, he was elevated to the
Politburo
A politburo () or political bureau is the highest organ of the central committee in communist parties. The term is also sometimes used to refer to similar organs in socialist and Islamist parties, such as the UK Labour Party's NEC or the Poli ...
. During that time, long-serving Secretary-General
János Kádár
János József Kádár (; ; né Czermanik; 26 May 1912 – 6 July 1989) was a Hungarian Communist leader and the General Secretary of the Hungarian Socialist Workers' Party, a position he held for 32 years. Declining health led to his retireme ...
was replaced by Prime Minister
Károly Grósz
Károly Grósz (1 August 1930 – 7 January 1996) was a Hungarian communist politician, who served as the General Secretary of the Hungarian Socialist Workers' Party from 1988 to 1989.
Early career
Grósz was born in Miskolc, Hungary. He jo ...
, who tried to establish a "technocratic" government and commissioned Németh to negotiate with
Deutsche Bank
Deutsche Bank AG (, ) is a Germany, German multinational Investment banking, investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange.
...
aimed at getting a one billion
Mark
Mark may refer to:
In the Bible
* Mark the Evangelist (5–68), traditionally ascribed author of the Gospel of Mark
* Gospel of Mark, one of the four canonical gospels and one of the three synoptic gospels
Currencies
* Mark (currency), a currenc ...
loan.
Prime Minister of Hungary
In the summer of 1988, Secretary-General Grósz announced his intention to resign from his position as Prime Minister to focus entirely on the organization of the party. Unlike the previous practice, he nominated four candidates,
Rezső Nyers
Rezső Nyers (; 21 March 1923 – 22 June 2018) was a Hungarian politician who served as Minister of Finance of Hungary from 1960 to 1962. For a few months in 1989, he was the country's last Communist leader.
Political career
Rezső Nyers ...
,
Imre Pozsgay
Imre András Pozsgay (''Pozsgay Imre'', ; 26 November 1933 – 25 March 2016) was a Hungarian Communist politician who played a key role in Hungary's transition to democracy after 1988. He served as Minister of Culture (1976–1980), Minister o ...
, Ilona Tatai and Pál Iványi to the post to discuss with local party committees, trade unions and the Patriotic People’s Front. As Grósz was aware of the disastrous economic situation and impending insolvency, Németh was also nominated for the position because he had established a reputation of being an economics expert. Finally the elderly Nyers withdrew himself from candidature in favor of Németh. He took the oath on 24 November 1988, at the time he was the world's youngest head of government until the election of
Pakistani Prime Minister Benazir Bhutto
Benazir Bhutto (21 June 1953 – 27 December 2007) was a Pakistani politician who served as the 11th prime minister of Pakistan from 1988 to 1990, and again from 1993 to 1996. She was also the first woman elected to head a democratic governmen ...
in December 1988.
Németh became Prime Minister from a relatively low position as he had never held any ministerial or state secretary posts in the previous governments. He also "inherited" some influential ministers from the Grósz Cabinet (i.e. Frigyes Berecz and
István Horváth), which led to the presumption within the party that Németh was Grósz's sidekick in those months. As there had not yet been created a budget for the next year, the system was not sustainable without budget cuts, according to Németh, Grósz's goal was to make his Prime Minister a
scapegoat
In the Bible, a scapegoat is one of a pair of kid goats that is released into the wilderness, taking with it all sins and impurities, while the other is sacrificed. The concept first appears in the Book of Leviticus, in which a goat is designate ...
, protecting his power and the communist ideology. Conflicts between hard-line and reformist wings widened when Grósz gave a speech in the
Budapest Sportcsarnok
Budapest Sportcsarnok was an indoor arena in Budapest, Hungary. The arena had a seating capacity for 12,500 spectators and opened in 1982. It was primarily used for basketball, figure skating, volleyball and other indoor sporting events until it ...
in which he made mention of the sharpening of the
class struggle
In political science, the term class conflict, class struggle, or class war refers to the economic antagonism and political tension that exist among social classes because of clashing interests, competition for limited resources, and inequali ...
and hinted at the possibility of the looming threat of
the White terror's return to Hungary. Németh gradually decoupled himself from the party leadership. Grósz, who had no idea that his successor would be self-propelled, even bugged Németh's telephone and the latter's staff later found
covert listening device
A covert listening device, more commonly known as a bug or a wire, is usually a combination of a miniature radio transmitter with a microphone. The use of bugs, called bugging, or wiretapping is a common technique in surveillance, espionage and ...
s in the Prime Minister's residence.
Over the coming months the hard-line wing got permanently weakened; the Political Committee and the Patriotic People's Front renounced their right to nominate candidates for ministerial positions; and by 10 May 1989, Németh managed to completely revamp the composition of his cabinet. He transformed the cabinet into a "government of experts" whose members were destined to make the transition from one-party dictatorship to democracy. Reformists
Gyula Horn
Gyula János Horn (5 July 1932 – 19 June 2013) was a Hungarian politician who was the Prime Minister of Hungary from 1994 to 1998.
Horn was the last Communist Minister of Foreign Affairs (Hungary), Minister of Foreign Affairs of Hungary. He p ...
,
László Békesi,
Csaba Hütter,
Ferenc Glatz
Ferenc Glatz (born 2 April 1941) is a Hungarian historian and academician. He has served three terms as the president of the Hungarian Academy of Sciences.
Biography
Ferenc Glatz was born in Csepel on 2 April 1941. He attended school in Csepe ...
and Ferenc Horváth became members of the cabinet then. After that the Németh government was placed under the authority of the
National Assembly
In politics, a national assembly is either a unicameral legislature, the lower house of a bicameral legislature, or both houses of a bicameral legislature together. In the English language it generally means "an assembly composed of the repr ...
instead of the Socialist Workers' Party.
Transition to democracy
After being promoted to Prime Minister in November 1988, Németh made a controversial decision to allow East Germans, who had long been restricted from traveling, to pass through Hungary on their way to
West Germany
West Germany was the common English name for the Federal Republic of Germany (FRG) from its formation on 23 May 1949 until German reunification, its reunification with East Germany on 3 October 1990. It is sometimes known as the Bonn Republi ...
. This decision is widely regarded as a contributing factor to the fall of the
Berlin Wall
The Berlin Wall (, ) was a guarded concrete Separation barrier, barrier that encircled West Berlin from 1961 to 1989, separating it from East Berlin and the East Germany, German Democratic Republic (GDR; East Germany). Construction of the B ...
on 9 November, 1989. He became Hungary's first post-Communist Prime Minister after the
Hungarian Socialist Workers' Party
The Hungarian Socialist Workers' Party (, , MSZMP) was the ruling Marxist–Leninist party of the Hungarian People's Republic between 1956 and 1989. It was organised from elements of the Hungarian Working People's Party during the Hungaria ...
was transformed into the
Hungarian Socialist Party
The Hungarian Socialist Party (, ), commonly known by its acronym MSZP (), is a centre-left to left-wing social-democratic and pro-European political party in Hungary.
It was founded on 7 October 1989 as a post-communist evolution and one of t ...
, on 7 October, 1989, a left of centre
social democratic
Social democracy is a Social philosophy, social, Economic ideology, economic, and political philosophy within socialism that supports Democracy, political and economic democracy and a gradualist, reformist, and democratic approach toward achi ...
party - of which Németh was a founding member. Following the passing of constitutional amendments by parliament on 23 October 1989 that removed the Constitution's communist character, Németh became the first (provisional) Prime Minister of the Third Hungarian Republic, and the new leader of Hungary as such.
After premiership
He left office on 23 May 1990, after suffering defeat by
József Antall
József Tihamér Antall Jr. (, ; 8 April 1932 – 12 December 1993) was a Hungarian teacher, librarian, historian, and statesman who served as the first democratically elected prime minister of Hungary, holding office from May 1990 until his d ...
in Hungary's
first free elections following the fall of Communism. He was an independent MP for
Szerencs until April 1991. Németh subsequently served as Vice President of the London-based
European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development, shortened to EBRD ( French: ''Banque européenne pour la reconstruction et le développement'' or ''BERD''), is an international financial institution founded in 1991 in Paris. As a multilat ...
, the financial institution established by the international community to assist the countries of eastern and central Europe and the former
Soviet Union
The Union of Soviet Socialist Republics. (USSR), commonly known as the Soviet Union, was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 until Dissolution of the Soviet ...
in their transition to democratic market economies. In 2000, he left the EBRD to return to Hungary.
He attempted to become the PM-designate of the opposition
socialist party
Socialist Party is the name of many different political parties around the world. All of these parties claim to uphold some form of socialism, though they may have very different interpretations of what "socialism" means. Statistically, most of th ...
, but was unsuccessful, as
Péter Medgyessy was appointed to that role. Medgyessy later became
Prime Minister
A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...
.
In 1993, Németh also received an Honorary Doctorate from
Heriot-Watt University
Heriot-Watt University () is a public research university based in Edinburgh, Scotland. It was established in 1821 as the School of Arts of Edinburgh, the world's first mechanics' institute, and was subsequently granted university status by roya ...
.
In 2007, Németh was commissioned by the
UN Secretary-General
The secretary-general of the United Nations (UNSG or UNSECGEN) is the chief administrative officer of the United Nations and head of the United Nations Secretariat, one of the United Nations System#Six principal organs, six principal organs of ...
Ban Ki-moon
Ban Ki-moon (born 13 June 1944) is a South Korean politician and diplomat who served as the eighth secretary-general of the United Nations between 2007 and 2016. Prior to his appointment as secretary-general, Ban was the South Korean minister ...
to investigate the illegal use of bounty by the
United Nations Development Programme
The United Nations Development Programme (UNDP) is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human development. The UNDP emphasizes on developing local capacity towar ...
(UNDP) to
North Korea
North Korea, officially the Democratic People's Republic of Korea (DPRK), is a country in East Asia. It constitutes the northern half of the Korea, Korean Peninsula and borders China and Russia to the north at the Yalu River, Yalu (Amnok) an ...
. Prior to this, the
Central Intelligence Agency
The Central Intelligence Agency (CIA; ) is a civilian foreign intelligence service of the federal government of the United States tasked with advancing national security through collecting and analyzing intelligence from around the world and ...
had informed Administrator
Kemal Derviş
Kemal Derviş (; 10 January 1949 – 8 May 2023) was a Turkish economist and politician who was head of the United Nations Development Programme. He was honored by the government of Japan for having "contributed to mainstreaming Japan's developm ...
that the North Korean regime counterfeited and reprinted sent banknotes, which was part of their food aid. Németh led the three-member inquiry committee which determined the existence of this unauthorized use of funds, and distribution branches in
Cairo
Cairo ( ; , ) is the Capital city, capital and largest city of Egypt and the Cairo Governorate, being home to more than 10 million people. It is also part of the List of urban agglomerations in Africa, largest urban agglomeration in Africa, L ...
and
Macau
Macau or Macao is a special administrative regions of China, special administrative region of the People's Republic of China (PRC). With a population of about people and a land area of , it is the most List of countries and dependencies by p ...
. In June 2008, the 380-page report was published.
For his role in the unification of Germany and Europe, in June 2014 Németh received the Point Alpha Prize. Németh also participated in the celebration of the 25th anniversary of the fall of the Berlin Wall, alongside
Mikhail Gorbachev
Mikhail Sergeyevich Gorbachev (2 March 1931 – 30 August 2022) was a Soviet and Russian politician who served as the last leader of the Soviet Union from 1985 to dissolution of the Soviet Union, the country's dissolution in 1991. He served a ...
,
Lech Wałęsa
Lech Wałęsa (; ; born 29 September 1943) is a Polish statesman, dissident, and Nobel Peace Prize laureate who served as the president of Poland between 1990 and 1995. After winning the 1990 Polish presidential election, 1990 election, Wałę ...
and German politicians. In an interview, Németh said that the demolition of the Berlin Wall happened all of a sudden, but momentum had been building for months that led up to the event, as in March 1989 Gorbachev had promised that the Soviets would not act violently after the opening of the Hungarian border with Austria.
References
Sources
*
*
{{DEFAULTSORT:Nemeth, Miklos
1948 births
Living people
People from Monok
Hungarian economists
Prime ministers of Hungary
Members of the Hungarian Socialist Workers' Party
Hungarian Socialist Party politicians
Members of the National Assembly of Hungary (1985–1990)
Members of the National Assembly of Hungary (1990–1994)
Harvard University alumni