Economy
Hungary PM expects IMF/EU talks to conclude in the autumn
As scheduled
The loan talks with the IMF/EU are progressing as scheduled and the government expects a quick conclusion of the negotiations, already in the autumn, Orbán told reporters on Wednesday.
The PM acknowledged that the ball is in now Hungary’s court therefore they will respond to a letter containing the loan conditions of the IMF/EU in the next week or two. Lots of discussions were needed and it was also necessary to "assess how much society can bear," Reuters cited him as saying.
"(But) this means we are close to saying that it could be realistic to have fast talks and a fast completion of talks" during the autumn," he added.
"Of course, there are differences in views and opinions, but I can see an intention to reach agreement on both sides."
According to a report by local newswire MTI, the PM said that despite the differences on some issues the talks are progressing well. They have not yet come to the part when they discuss the size of the backstop but a programme of about EUR 15 bn could be expected.
Orbán stressed that "not even an IMF agreement" could threaten a job protection programme launched in June, which the government plans to partly finance from a new financial transaction tax also levied on the central bank (NBH). The European Central Bank (ECB) said this damaged the central bank's independence.
The Premier also said ECB steps expected on Thursday towards a new bond-buying programme could be a "watershed" for Europe and could also impact Hungarian economic policy.
"It ...can open a completely new chapter... in the history of building European unity," Reuters cited him as saying said.
"Therefore, we need to focus not only on the short term perspective of the IMF/EU agreement but we need to analyse the decision of the ECB in a longer perspective as well.
"There is a new era in economic history, and this is the perspective in which everything has to be reassessed if the ECB adopts the policy of buying government bonds directly."
Cannot do without the IMF
Hungary cannot do without an IMF credit, a financial assistance programme. But this opportunity should not be a reason for concern, it needs to be used cleverly so that the structure of the Hungarian economy can be improved, said Mihály Varga, minister without portfolio leading the aid talks, at a senate meeting of Budapest’s Corvinus University during the opening ceremony on Wednesday.
Varga said the positive market sentiment related to the start of the talks, the decline in country risk and the stronger forint all indicate that the possibility of a new IMF-led programme is an important pillar of confidence in Hungary’s economic policy. There will be no hindrance to continue the negotiations with the Fund, he added.
But when?
At this point it is still unclear when the IMF/EU missions that left Budapest in July after the first round of formal negotiations will be back.
IMF External Relations Director Gerry Rice told a press conference in Washington last Thursday that the IMF has not yet set a date when the negotiations with Hungary continue on a financial assistance programme.
"The Hungarian negotiating mission continues to expect that the parties will stick to the schedule determined earlier and the talks will continue in September," Varga’s office said in a statement on Tuesday.
In view of the above and uncertainties surrounding next year’s budget an increasing number of analysts believe that the talks could drag out.Antal Rogán, head of the parliamentary group of the ruling Fidesz party, said in an interview published in a local paper today that Hungary will reach an agreement on a financial assistance programme with the IMF/EU before the end of this year. He added that the 2013 budget will likely need an adjustment due to the deal.
The loan talks with the IMF/EU are progressing as scheduled and the government expects a quick conclusion of the negotiations, already in the autumn, Orbán told reporters on Wednesday.
The PM acknowledged that the ball is in now Hungary’s court therefore they will respond to a letter containing the loan conditions of the IMF/EU in the next week or two. Lots of discussions were needed and it was also necessary to "assess how much society can bear," Reuters cited him as saying.
"(But) this means we are close to saying that it could be realistic to have fast talks and a fast completion of talks" during the autumn," he added.
"Of course, there are differences in views and opinions, but I can see an intention to reach agreement on both sides."
According to a report by local newswire MTI, the PM said that despite the differences on some issues the talks are progressing well. They have not yet come to the part when they discuss the size of the backstop but a programme of about EUR 15 bn could be expected.
Orbán stressed that "not even an IMF agreement" could threaten a job protection programme launched in June, which the government plans to partly finance from a new financial transaction tax also levied on the central bank (NBH). The European Central Bank (ECB) said this damaged the central bank's independence.
The Premier also said ECB steps expected on Thursday towards a new bond-buying programme could be a "watershed" for Europe and could also impact Hungarian economic policy.
"It ...can open a completely new chapter... in the history of building European unity," Reuters cited him as saying said.
"Therefore, we need to focus not only on the short term perspective of the IMF/EU agreement but we need to analyse the decision of the ECB in a longer perspective as well.
"There is a new era in economic history, and this is the perspective in which everything has to be reassessed if the ECB adopts the policy of buying government bonds directly."
Cannot do without the IMF
Hungary cannot do without an IMF credit, a financial assistance programme. But this opportunity should not be a reason for concern, it needs to be used cleverly so that the structure of the Hungarian economy can be improved, said Mihály Varga, minister without portfolio leading the aid talks, at a senate meeting of Budapest’s Corvinus University during the opening ceremony on Wednesday.
Varga said the positive market sentiment related to the start of the talks, the decline in country risk and the stronger forint all indicate that the possibility of a new IMF-led programme is an important pillar of confidence in Hungary’s economic policy. There will be no hindrance to continue the negotiations with the Fund, he added.
But when?
At this point it is still unclear when the IMF/EU missions that left Budapest in July after the first round of formal negotiations will be back.
IMF External Relations Director Gerry Rice told a press conference in Washington last Thursday that the IMF has not yet set a date when the negotiations with Hungary continue on a financial assistance programme.
"The Hungarian negotiating mission continues to expect that the parties will stick to the schedule determined earlier and the talks will continue in September," Varga’s office said in a statement on Tuesday.
In view of the above and uncertainties surrounding next year’s budget an increasing number of analysts believe that the talks could drag out.Antal Rogán, head of the parliamentary group of the ruling Fidesz party, said in an interview published in a local paper today that Hungary will reach an agreement on a financial assistance programme with the IMF/EU before the end of this year. He added that the 2013 budget will likely need an adjustment due to the deal.
