IMF still open for talks with Hungary.

By bne IntelliNews July 23, 2010
There is still a slight chance for re-opening the talk between the IMF and Hungary, but the contry would need to make radical changes in its attitude towards the fiscal reform and the central bank wage ceiling, according to IMF representative in the country, Iryna Ivaschenko, quoted by Dow Jones . She underlined that the main differences between the IMF and the government concerned the approach of the government to the fiscal adjustment as well as the planned violation of the National Bank of Hungary (NBH) independence through the introduction of wage caps in the bank. Earlier, PM Viktor Orban practically rejected further negotiations with the IMF on the issue, emphasising that the cabinet would coordinate and discuss its budgetary plans only with the EC. Ivaschenko, however, pointed out that the IMF and the EC were joint lenders to the country and consequently, separate negotiations could not be led. The key requirements of the IMF for continuing the talks with the government centered around the preparation of sustainable fiscal reforms rather than measures with a temporary and unsustainable nature. She referred to the new financial sector tax, but also noted that the argument applied to a new tax on telecom and energy companies, which was reportedly considered by the government, as well. Ivaschenko pointed out that the IMF was not aware of plans for such taxes, and noted that ad-hoc measures were not desirable as they limited the transparency and predictability of the tax system and impaired economic growth. In a related statement, economy minister Gyorgy Matolcsy stressed that the government strategy could not be applied while the country lacked financial independence. He noted that the policy to achieve independence would lead to the gradual reduction of the government debt below the 60% of GDP benchmark level. Matolcsy reiterated that major structural reforms would be carried out in 2011 and 2012, regarding the public administration and the tax system, arguing that they would lay the ground for a period of expansion. The minister projected that GDP could thus reach 105% of the EU average by 2030.

Read in IntelliNews Pro
Get IntelliNews Pro

Related Articles

Assets of Hungarys investment funds up 3.2% m/m in Feb 2013.

Hungary's investment funds had aggregate assets of HUF 3.657tn (EUR 11.98bn) as of end-February 2013, up by 3.2% m/m, MTI news agency reported citing data from the association of investment funds ... more

Hungary's number of employees down 0.6% y/y in Jan 2013.

The number of employees in Hungary's public and private sectors fell for the tenth straight month in January 2013 declining by 0.6% y/y to 2.574mn, the statistics office informed. The decline ... more

Hungarys MVM clears deal for purchasing E.ONs local units.

The assembly of state-owned Hungarian Electricity Works (MVM) has approved the purchase of the local gas business of German power utility E.ON, Hungary AM reported, citing local daily Magyar ... more

Follow Us On

Most Read

  1. Iran vs Israel: Who is better equipped for war?
    6 days ago
  2. Saudi Arabia to scale back plans for Neom city
    10 days ago
  3. Oil continues to flow to Israel via Turkey despite Erdogan’s vehement speeches on plight of Gaza
    5 months ago
  4. BREAKING: Iraq, Syria and Jordan close airspace amid Iranian strike on Israel
    6 days ago
  5. Russia’s war economy boosted by rising oil prices
    4 days ago
  1. Russia could pay off its entire external debt tomorrow, in cash
    20 days ago
  2. Speculation swirls of “Men in Blue” in Crocus City Hall terrorist attack linked to FSB
    25 days ago
  3. Albanians campaign on social media to keep bus bridge created in freak accident
    1 year ago
  4. UBN: Russia could take the Baltic states in 48 hours
    30 days ago
  5. BRICS announce a blockchain-based payment system to create a common currency
    23 days ago

Reports

Dismiss