Hungarian PM reiterates intention to break with IMF when contract expires

10:24, July 24, 2010      

Email | Print | Subscribe | Comments | Forum 

Getting free of the International Monetary Fund (IMF) will be a step towards national self-determination, Hungarian Prime Minister Viktor Orban said Friday.

Returning to a theme he raised in Parliament earlier in the week, Orban said that once Hungary's contract with the IMF expired in October, the country would have nothing more to do with that organization.

Speaking on the all-news television channel HirTV, he said that the salary of the central bank governor, cut earlier this week by Parliament despite IMF and European Union (EU) warnings that the move violated central bank independence, was none of their business.

The IMF and EU negotiating teams walked out on Hungary a week ago after the government refused to yield to their concerns that imposing a tax on banks would slow growth and prevent the country from attaining short-term sustainability. The IMF and EU had granted Hungary an emergency standby loan of 25 billion dollars in 2008, the last portion of which had been due for transfer to Hungary at this time until frozen by the dispute.

Orban again said he was grateful to the IMF and EU for preventing Hungary's financial collapse in 2008. The loan agreement, due to expire in October, contained two specifications, he said -- that the money had to be repaid, and that Hungary's budget deficit would not exceed 3.8 percent of the gross domestic product (GDP) this year. Hungary would meet these conditions, he said, and that would end its ties to the IMF despite suggestions from the latter that it was ready to renew talks if Hungary showed some flexibility.

The EU, he went on, was a different matter entirely, because the EU wanted all members to cut their deficits to below 3 percent of GDP. Hungary is ready to meet that target, he said. "We will bring down the Hungarian budget deficit to below 3 percent," he said.

Orban voiced optimism although two international ratings agencies, Moody's and Standard & Poor's had placed Hungary's credit under review for a possible downgrade earlier on Friday, on the heels of Parliament's decision to go against IMF recommendations. Once the economy is growing and is in equilibrium, the market will be quite willing to lend Hungary money, he said, adding that the country was almost there now.

"When concluding an agreement with the EU on how we -- and all the other countries -- will bring down our deficit to below 3 percent the Hungarian economy's reputation and market opportunities will improve significantly," he said.



  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • A Long March-2FT1 carrier rocket loaded with Tiangong-1 unmanned space lab module blasts off from the launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Sept. 29, 2011. Commander-in-chief of China's manned space program Chang Wanquan announced Thursday night that the launch of Tiangong-1 space lab module was successful. (Xinhua/Wang Jianmin)
  • Chinese President Hu Jintao watches the launch of Tiangong-1 space lab module at Beijing Aerospace Control Center in Beijing, capital of China, Sept. 29, 2011. Other members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, including Wu Bangguo, Jia Qinglin, Li Changchun, Xi Jinping, Li Keqiang and Zhou Yongkang, are also present. (Xinhua/Rao Aimin)
  • The graphics shows the launch procedures of the carrier rocket of Tiangong-1 space lab module, Long March-2FT1 on Sept. 29, 2011. (Xinhua/Lu Zhe)
  • Image taken from Beijing Aerospace Control Center shows a Long March-2FT1 carrier rocket loaded with Tiangong-1 unmanned space lab module blasting off from the launch pad at the Jiuquan Satellite Launch Center in northwest China's Gansu Province, Sept. 29, 2011. (Xinhua)
  • On Sept. 28, tourists travel around the Mingshashan Scenic Area in Dunhuang, Gansu province by camel. With the National Day vacation right around the corner, more and more tourists from home and abroad are going to Dunhuang. Riding on a camel, they travel in the desert to enjoy the cities rare form of natural scenery. (Xinhua/Zhang Weixian)
  • Chinese forest armed forces work together with forest firefighters on Sept. 28. (Xinhua/Chai Liren)
Hot Forum Discussion