Economy
IMF discussed stand-by arrangement with Hungary - Rice
"During the first part of 2012 we discussed with the authorities policies that could be supported by a Stand-by Arrangement, which the authorities had expressed the intention to treat as precautionary," Rice told a perss briefing on Thursday.
"Now, as we have stated in recent weeks, these discussions have been put on hold," he added.
“Hungary asked for a flexible credit line and finally the IMF said 'no'," Reuters cited Orbán as telling a seminar in Brussels on Wednesday.
"The negotiations are still open but now we are very close to that 'no'," he said, adding the IMF told Hungary the country needed loans, not a flexible credit line.
When asked by a journalist whether Orbán was lying and the IMF did not in fact reject his request for an FCL, Rice reiterated that they have discussed a programme that can be supported by as a Stand-By Arrangement, "which is the facility tailored for countries with needs similar to Hungary's."
Two weeks ago, Mihály Varga, Hungary’s chief aid negotiator, said the government wants to secure a deal which Poland has, as Warsaw requested no actual financial assistance only security that in case of trouble they can turn to the IMF. (Poland was one of the first countries to take advantage of a new IMF lending tool, the Flexible Credit Line (FCL), established in March 2009 and enhanced in August 2010. Warsaw has never tapped the facility and there are no policy conditions attached to using it, should authorities need to access the credit line.
"Now, as we have stated in recent weeks, these discussions have been put on hold," he added.
“Hungary asked for a flexible credit line and finally the IMF said 'no'," Reuters cited Orbán as telling a seminar in Brussels on Wednesday.
"The negotiations are still open but now we are very close to that 'no'," he said, adding the IMF told Hungary the country needed loans, not a flexible credit line.
When asked by a journalist whether Orbán was lying and the IMF did not in fact reject his request for an FCL, Rice reiterated that they have discussed a programme that can be supported by as a Stand-By Arrangement, "which is the facility tailored for countries with needs similar to Hungary's."
Two weeks ago, Mihály Varga, Hungary’s chief aid negotiator, said the government wants to secure a deal which Poland has, as Warsaw requested no actual financial assistance only security that in case of trouble they can turn to the IMF. (Poland was one of the first countries to take advantage of a new IMF lending tool, the Flexible Credit Line (FCL), established in March 2009 and enhanced in August 2010. Warsaw has never tapped the facility and there are no policy conditions attached to using it, should authorities need to access the credit line.
Flexible Credit Line
The FCL is available to countries with very strong fundamentals, policies, and track records of policy implementation and is particularly useful for crisis prevention purposes. FCL arrangements are approved for countries meeting pre-set qualification criteria.
The FCL is a renewable credit line, which could be approved for either one or two years. Two-year arrangements involve a review of eligibility after the first year. If the country draws on the credit line, the repayment period is between three and five years.
There is no cap on access to Fund resources under the FCL, and access is determined on a case-by-case basis. Qualified countries have the full amount available up-front, with no ongoing conditions. There is flexibility to either draw on the credit line at the time it is approved, or treat it as precautionary.
The FCL is a renewable credit line, which could be approved for either one or two years. Two-year arrangements involve a review of eligibility after the first year. If the country draws on the credit line, the repayment period is between three and five years.
There is no cap on access to Fund resources under the FCL, and access is determined on a case-by-case basis. Qualified countries have the full amount available up-front, with no ongoing conditions. There is flexibility to either draw on the credit line at the time it is approved, or treat it as precautionary.
