Hungary PM names ex-Shell exec as economy minister

as economy minister, filling the last vacancy in his cabinet, a government spokeswoman said on Wednesday.

Istvan Varga, 52, was head of the oil giant's Hungarian unit last year and emerged as a candidate for the ministry job after the previous nominee, Tamas Vahl, withdrew following criticism over his role as chief of SAP Hungary.

Varga will have to go through committee hearings in parliament before taking office.

Bajnai, who replaced the unpopular socialist Ferenc Gyurcsany as prime minister last week, said he would tackle Hungary's worst economic slump in almost two decades with a team of outside experts.

His government includes some Socialist party stalwarts, as well as outside faces in key positions, such as Peter Oszko, the new finance minister, who left the top job at accounting firm Deloitte's Hungarian unit to work with Bajnai.

The economy minister's office, which was Bajnai's before he became premier, remained vacant when the government took the official oath of office on Monday.

Hungary, which is dependent on a $25.1 billion loan secured from the IMF and the EU last October, has seen exports collapse, industrial output plummet and faces a 6 percent contraction in its economy this year, according to government estimates.

The government plans a 1,300 billion forint ($5.63 billion) austerity package for 2009 and 2010 to keep the budget deficit under 3 percent of gross domestic product, a condition of the IMF deal.

Varga, who will be responsible for the disbursement of European Union funds, was not immediately available for comment.

He spent almost his entire career in the oil business, first at the state monopoly Mineralimpex during the 1980s, then at Shell from the early 1990s.

He is chairman of the Business Council for Sustainable Development in Hungary, a board member at the British-Hungarian Chamber of Commerce, and worked with Transparency International as an advisor, government spokeswoman Bernadett Budai said at a news conference.

(Reporting by Marton Dunai; Editing by Louise Ireland)