"The Financial Times has published its ranking of the European Union’s best finance ministers. Hungary’s FinMin Péter Oszkó ranks 17th of the 19 "contenders". The FT’s list shows how each of the European finance ministers was ranked politically, on economic criteria, on credibility and overall.The 19 ministers were judged according to their political skills and the performance of their economies. In the former category the finance ministers were ranked "according to the swiftness with which they grasped what action was required, their effectiveness in implementation, and their star potential on the international stage. The "economic test" looked at how their economy had performed during the crisis, its robustness and balance, and the control kept on fiscal policy. There was also a "credibility test", taking account of the financial markets’ perceptions of an economy’s reliability."
The winner this year is Christine Lagarde, France’s finance minister. "The judges loved her performances on the international stage when it came to regulation and the future of banking," the FT said, adding that the French economy has also been among the most resilient in the industrial world.
The runner-ups are Peer Steinbrück (Germany) and Didier Reynders (Belgium).
Hungary’s Péter Oszkó was judged to be the third worst finance minister of the 19 examined, according to FT. The last two in the ranking are George Papaconstantinou of Greece and Brian Lenihan of Ireland.
"Balancing the budget and simplifying the tax code are big challenges but Mr Oszkó may not have to tackle them for long: the opposition centre-right Fidesz party is expected to win by a landslide in parliamentary elections next year," the FT commented the overall ranking of the minister.
In the "political" ranking Oszkó finished on the 16th place ahead of Eduard Janota (Czech Republic), Fernando Teixeira dos Santos (Portugal) and George Papaconstantinou (Greece).
In the "economic test" Oszkó came in 11th, while he finished last in the credibility ranking.
Portfolio.hu viewpoint:
It is not our job to defend Oszkó, but it is hard to take this ranking seriously. We already find it hard to grasp what the benchmark is when the developed world appears to be in a spending craze. If the core task of the finance ministers were standing guard against such behaviour, Oszkó would not fare bad at all in the EU, to say the least. If the main aspect were being anticyclical, Oszkó - who has been in office since April - cannot really be criticized for the country has been (is) clearly on a forced track with entirely different challenges that is exactly proven by the IMF credit facility and the related crisis management programme.
We do not wish to address the individual rankings one by one, but we still raise our brows seeing that Greece’s finance minister, whose fiscal policy infuriates euro zone institutions, finished before Oszkó in the economic ranking. The categories in the economic ranking were (i) the change in GDP during recession, (ii) the fiscal deficit in 2009, (iii) forecast reduction in fiscal deficit, (iv) the change in the jobless rate between 2007 and 2011 (fcast) and (v) the deviation of the current account from balance.
In the credibility ranking the FT looked at the average yield over the previous year on a 10-year government bond - the higher the yield (or cost to the borrower) the less "creditworthy" the economy was assumed to be, and therefore the lower its rank in the category.
Now we could go into the factors that affect the 10-yr benchmark yield, different determinations and external impacts. But we will not, this "methodology" is so utterly absurd. The best use of the FT ranking may be at to show how nice it is to be finance minister in each country, but it is obviously ill-suited to represent professional performances."
Source: Portfolio Online Financial Journal
18.11.2009