Miklós Németh

Miklós Németh [ˈmikloːʃ ˈneːmɛt] (born 14 January 1948, in Monok, Hungary) is a Hungarian economist and politician, who served as Prime Minister of Hungary from 24 November 1988 to 23 May 1990. He was one of the leaders of the Socialist Workers' Party, Hungary's Communist party, in the tumultuous years that led to the collapse of communism in Eastern and Central Europe. He was the last Communist Prime Minister of Hungary.

Németh was born into a poor Catholic peasant family on 14 January 1948 in Monok, the birthplace of revolutionary Lajos Kossuth. He was of Swabian origin on maternal side, the Stajzs were settled down by the aristocrat Károlyi family in the 18th century. Németh's grandfather was deported from Monok to the Soviet Union in autumn 1944, where from he returned home only in 1951, while his father, András Németh, a devout Catholic fought in the Battle of Voronezh and survived the disaster at Don River. He returned to Hungary in 1946. That kind of dual identity was present in Németh's political life, the Christian family background behind his Communist party career. For instance, when he married Erzsébet Szilágyi in 1971, there were also a church wedding after civil marriage. Németh was 8 years old during the Hungarian Revolution of 1956. He had just isolated experiences about the events; his parents listened Radio Free Europe, 1848 flags were erected in the main square of the village, and the local party secretary was arrested and freedom fighters forced him to recite Lord's Prayer. Németh could not have known the whole truth of the events due state propaganda and concealment until his studies in the United States.

After finishing elementary school in Szerencs, Németh attended Berzeviczy Gergely School of Trade and Catering in Miskolc since 1962, where theologian and historian Gábor Deák was one of his teachers. He took his final exam in 1966, after that he had been accepted at 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 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 experts, which had 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 full-time university professor. Németh won a scholarship of International Research & Exchanges Board to the United States for 1975/76 semesters, where he subsequently attended Harvard University in Boston. He learnt decision theory, cost–benefit analysis and business law. Németh later was accused by hard-line communist leaders that Central Intelligence Agency (CIA) recruited him during Harvard year, however he called these charges as "nonsensical".

Returning home, Németh left the University of Economics and worked for the National Planning Office (OT) since 1977. He also joined the Hungarian Socialist Workers' Party (MSZMP) during this time. He was a theoretical researcher until 1978, when he was transferred to the office's Economics Department. Here his role was preparation of shortened plan documents on industrial, agrarian, social etc. surveys, drafts which were dispatched to the Council of Ministers. According to Németh, he became familiar with the economic reality then, the true extent of the huge debt. The Communist regime and the Hungarian National Bank led a double bookkeeping, even the majority of the party's Political Committee did not know the real data too. Németh began working for the Socialist Workers' Party Economic Department in 1981. Ferenc Bartha and him negotiated with Alan Whittome and Jacques de Larosière, representatives of the International Monetary Fund (IMF) in 1982, but Németh also took part in a conference to resort to loans from China, bypassing the Soviets.

Németh was appointed Head of Economic Department in 1986, when Mikhail Gorbachev became leader of the Soviet Union. Németh who knew the new Secretary-General earlier, hoped that a new period will occur with social, political and economical reforms. Németh was promoted to the Central Committee as Secretary in charge of Economic Policy in June 1987. Less than a year later he was elevated to the Politburo in May 1988. During that time, long-time Secretary-General János Kádár was replaced by Prime Minister Károly Grósz, who tried to establish a "technocratic" government and commissioned Németh to negotiate with Deutsche Bank in the case of one billion Mark loan.

In the summer of 1988, Secretary-General Grósz announced he intends to resign from his position of Prime Minister to concentrate entirely on the party organization. Unlike the previous practice, he nominated four candidates, Rezső Nyers, Imre Pozsgay, Ilona Tatai and Pál Iványi to the post to consult with county party committees, trade unions and Patriotic People’s Front. As Grósz was aware of the disastrous economic situation and impending insolvency, Németh's name also incurred who has established his reputation with his economic expertise. Finally the elderly Nyers withdrew from candidature in favour 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 in December 1988.

Németh became Prime Minister from 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 a party that Németh was Grósz's sidekick in those months. As there had not yet been 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 as scapegoat, protecting his power and the communist ideology. Conflicts between hard-line and reformist wings widened when Grósz gave a speech on sharpening of class struggle and danger of White terror in the Budapest Sportcsarnok. Németh gradually decoupled himself from the party leadership. Grósz, who had no idea that his successor will be self-propelled, even bugged Németh's telephone and the latter's staff had found covert listening devices in the Prime Minister's residence. Over the coming months the hard-line wing permanently weakened, the Political Committee and the Patriotic People's Front renounced from theirs right to nomination of candidates to the ministerial positions, by 10 May 1989, Németh managed to completely revamp the composition of his cabinet. He transformed it into a "government of experts" whose members were destined to make the transition from one-party dictatorship to democracy. Reformists Gyula Horn, László Békesi, Csaba Hütter, Ferenc Glatz and Ferenc Horváth became members of the cabinet then. After that the Németh government was responsible to the National Assembly instead of the Socialist Workers' Party.

Transition to democracy

After being promoted to Prime Minister in November 1988, Németh took the controversial decision to allow East Germans, long held captive by their country's communist regime, to travel through Hungary en route to freedom in West Germany. This decision is widely credited with helping to bring about the fall of the Berlin Wall on 9 November 1989. He became Hungary`s first post-Communist Prime Minister when on 7 October 1989 the Hungarian Socialist Workers' Party transformed itself into the Hungarian Socialist Party, a left of centre social democratic party - of which Németh was a founding member. Following the passing of constitutional amendments by parliament on 23 October 1989 he served as the first (provisional) Prime Minister of the Third Hungarian Republic - and as such the new leader of Hungary.

He left office on 23 May 1990, after suffering defeat by József Antall 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 financial institution established by the international community to assist the countries of eastern and central Europe and the former Soviet Union in their transition to democratic market economies. He left the EBRD in 2000 to return to Hungary. He attempted to become the PM-designate of the opposition socialist party, but was unsuccessful, as Péter Medgyessy was appointed to that role. Medgyessy later became Prime Minister.

Németh also received an Honorary Doctorate from Heriot-Watt University in 1993.

In 2007, Németh was commissioned by UN Secretary-General Ban Ki-moon to investigate illegal use of bounty by United Nations Development Programme (UNDP) to North Korea. Formerly the Central Intelligence Agency informed Administrator Kemal Derviş that the North Korean regime counterfeited and reprinted the sent banknotes, which was part of the food aid. Németh led the three-member inquiry committee which determined that existence of unauthorized use of funds, distribution branches in Cairo and Macau. The 380-page report was published in June 2008.

For his role in the unification of Germany and Europe, Németh has received Point Alpha Prize in June 2014. Németh also participated in celebration of 25th anniversary of the fall of the Berlin Wall, alongside Mikhail Gorbachev, Lech Wałęsa and German politicians. When Németh recalled the events in an interview, he said the demolition of the Berlin Wall was sudden, but momentum had been building for months, as in March 1989 Gorbachev promised Soviets will not act violently after the open Hungarian border with Austria.