Hungary completes first round of financial aid talks with IMF/EU.

By bne IntelliNews July 26, 2012
The Hungarian government has completed the first round of negotiations with the IMF and the EU delegations on a precautionary financial assistance, MTI news agency informed. Talks, which have been held between July 17 and July 25, have been encouraging, the agency cited PM Viktor Orban as telling a press conference. Foreign representatives are expected to draft in early September recommendations on the economic policies, including proposals for changes in the draft bill on the 2013 state budget, which Hungary should meet to receive a loan. Although, no specific results from the negotiations have been provided, the government and the IMF/EU agreed that wage rises and welfare measures could be supported only from economic growth and not from loans. The two sides also had a common stance on the need for optimisation of the state administration. However, some differences remained in terms of the pace of the required reforms, Orban said. The IMF calls for a more rapid progress, which is seen risky by the government. Another disputed question referred to the situation of the financial sector. The IMF considers that restoring the profitability of the financial sector is essential for economic growth, while the government believes the financial sector should take its share from the public burdens. As noted, Hungary will introduce a new tax on financial transactions as of January 1, 2013.
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