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.

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

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss