Hungary’s “Eastern Opening Czar” falls out of Orbán’s grace

György Matolcsy, the former governor of the Hungarian National Bank, was a key figure in Hungary’s “Eastern Opening” policy toward Beijing, Moscow, and other non-Western partners. Following his fall from Orbán’s grace, the MNB-funded network of pro-Eastern Opening think tanks is also in trouble.

Key takeaways:

Between 2013 and early 2025, György Matolcsy served as the Governor of Hungary’s National Bank (MNB) and was widely regarded as a key ally of Prime Minister Viktor Orbán. In 2024, he was listed as the 15th most influential person in Hungary by the popular “100 Richest Hungarians” list. Matolcsy played a crucial role in the Hungarian government’s “Eastern Opening” strategy, a policy aimed at fostering closer relations with non-Western partners, particularly Beijing and Moscow. He was also a prominent promoter of various international events linked to this strategy, such as the Eurasia Forum, held annually in Budapest since 2019. At the 2024 Eurasia Forum, the opening keynote speeches were delivered by Matolcsy and Orbán, underscoring their longstanding alliance.

However, despite their decade-long close relationship, reports of growing disagreements between Orbán and Matolcsy began to surface in early 2024. By late 2024, Matolcsy had become increasingly outspoken in his criticism of Hungary’s economic direction, publicly dismissing Orbán’s economic plans as “unrealistic.” In September 2024, it was announced that Matolcsy’s term as Governor of the National Bank would not be extended in 2025, signaling a clear break in their political partnership.

After Matolcsy’s departure from the MNB in March 2025, events took a dramatic turn. Hungary’s State Audit Office launched an investigation into the MNB and several of its affiliated foundations, uncovering significant misappropriations of public funds totaling approximately HUF 500 billion (around €1.25 billion). Among the implicated foundations were those closely linked to Matolcsy’s efforts to promote the “Eastern Opening” strategy, revealing a potentially deep-rooted financial scandal.

The Pallas Athene Domus Meriti (PADME) foundation alone accounted for at least €414 million in mismanaged funds. Another, the John von Neumann University Fund, was found to have misused approximately HUF 127 billion (€315 million), according to the State Audit Office’s reports. 

Promoting “Eastern Opening” from MNB-linked sources

Since the 2010s, the MNB has developed an extensive network of international partnerships, as highlighted on its official website. In addition to its ties with EU financial institutions, the bank has cultivated significant relationships with a range of high-profile Chinese institutions, including the Development Research Center of the State Council, the Chinese Academy of Social Sciences, the China Institute of International Studies, and the Center for China and Globalization. China clearly dominates the list of the MNB’s non-Western partnerships, with fewer connections noted with other countries such as Japan, South Korea, and Turkey. The MNB has also established active relationships with Chinese financial powerhouses such as the China Development Bank and the Asian Infrastructure Investment Bank, as well as signing a cooperation agreement with China’s Securities Regulatory Commission.

In addition to the Eurasia Forum, the MNB also hosts the annual “Budapest Renminbi Initiative” conference, which aims to promote the internationalization of China’s currency. The intellectual backbone of these events has largely been provided by think tanks and research institutes funded through MNB-linked foundations, such as the PADME and the John von Neumann University Foundation.

The PAGEO Research Institute, established in 2015, was one such institution. It was tasked with producing research on East Asian geopolitics to support Hungary’s Eastern Opening strategy. It belonged to the Pallas Athene Geopolitical Foundation (PAGEO), itself part of the PADME foundation. However, despite its initial prominence in publishing analyses of Hungary’s and the Central and Eastern European (CEE) region’s relations with China, PAGEO’s activities appear to have been wound down by 2020, based on the lack of recent updates on its website.

In 2021, another MNB-linked think tank, the Eurasia Center, was established under the auspices of the John von Neumann University (NJE). Located in Kecskemét, a central Hungarian city closely associated with the Matolcsy family, NJE has been directly controlled by a “public trust foundation” since 2020. (The university was established in 2016 by merging two colleges located in the two central Hungarian towns, Kecskemét and Szolnok.) This governance model, which has been criticized for its lack of transparency, led to the university’s exclusion from EU-funded Erasmus+ and Horizon programs in 2022. The leadership of NJE has included several close associates of the Matolcsy family, further highlighting the intertwined nature of these institutions. 

The director of the Eurasia Center is Levente Horváth, a former Consul General in Shanghai and a long-time advisor to Matolcsy. Horváth was also a key promoter of the controversial Fudan University project in Budapest. An outspoken supporter of Chinese geopolitical strategies, Horváth has published extensively on the Belt and Road Initiative (BRI) and has even translated the fourth volume of Xi Jinping’s The Governance of China into Hungarian—a promotional event for the book in 2024 was chaired by the head of the CCP’s Publicity Department, Li Shulei.  Horváth remains active in promoting China’s soft power in Hungary, including through his role as director of the Hungarian-Chinese Youth Friendship Association, which explicitly aims to promote the Eastern Opening and the BRI.

Horváth has also edited several major volumes on China-Hungary relations, including books on the BRI, the 17+1 (later 14+1) China-CEE cooperation framework, and broader China-Hungary ties within the BRI context. These works, often funded by the NJE Foundation, have featured forewords by Chinese ambassadors and endorsements from figures the likes of Chinese President Xi Jinping and Orbán.

Conclusion: Eastern Opening no more?

Hungary’s “Eastern Opening” has been a defining feature of its foreign policy since Viktor Orbán’s return to power in 2010. Under Matolcsy’s leadership, the MNB played a central role in this strategy, using its financial resources to build ties with Beijing and promote a Beijing-friendly narrative in Hungary. However, the recent scandals surrounding MNB-linked foundations and the broader geopolitical shifts brought about by Donald Trump’s return to the White House are likely to influence Hungary’s strategic direction.

The “Eastern Opening” has been a defining feature of Hungary’s foreign policy since Viktor Orbán’s return to power in 2010. Since the mid-2010s, the MNB, with its former Governor Matolcsy and a network of MNB-funded institutions, played a crucial role in building relations with Beijing and producing Beijing-friendly narratives in the country. Whether these activities will be continued or discontinued with a new leadership at the top of the country’s national bank remains to be seen. 

The apparent freezing of controversial projects, such as the Chinese police patrols in Budapest, suggests a potential recalibration. As Hungary seeks to balance its relations between Washington and Beijing, institutions like the Danube Institute, known for its connections to the American conservative movement, may become more prominent than the MNB’s network of pro-Beijing research institutions. This shift could signal a broader realignment in Hungary’s foreign policy, as the country navigates the increasingly polarized landscape of great power competition.