Hungary wants to hold deficit talks with EU, not IMF

08:38, July 23, 2010      

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Prime Minister Viktor Orban said Thursday his country wants to negotiate its deficit plans with the European Union, not the International Monetary Fund.

Noting that the IMF standby loan contract would expire in October, Orban said Hungary would make no further concessions.

Orban said what Hungary needs to do now is to restore its economic self-determination. He promised that Hungary would meet the IMF-mandated goal of keeping the deficit down to 3.8 percent of the gross domestic product (GDP) in 2010, but on its own terms.

He said a bank tax to be voted in parliament Thursday would not impede growth, adding that the banks had reported record profits despite the economic downturn.

Orban also said Hungary is ready to negotiate with all international bodies on ways to reduce its debt, especially the EU, of which Hungary is a member.

Though he admitted that Hungary has suffered excessive deficits for a number of years, he said some 24 EU members countries have also allowed their deficits to jump over the three-percent bar set by the EU.

He urged the EU to treat every member state equally under that ruling.

National Economy Minister Gyorgy Matolcsy said Thursday that Hungary has to establish its financial independence.

He said doing that required cutting the national debt, currently 80 percent of the GDP to 70 percent and eventually to 60 percent.

He defended the bank tax, saying it would yield 200 billion forints (about 900 million U.S. dollars). The alternative, he said, was another set of austerity measures, which the administration was unwilling to introduce.



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