Hungary will seek a partnership with IMF/EU

Hungary's new PM Viktor Orban said his government will seek a partnership with the IMF and the EU for Fidesz's plans to boost the economy

Hungary will seek a partnership with IMF/EU

 

Hungary's new government will not accept orders from the IMF or the EU when it renegotiates support from lenders for tax cuts and a plan to reduce state debt, the prime minister elect said on Monday.

Viktor Orban, whose centre-right Fidesz party won a two-thirds parliamentary majority in Sunday's elections, also criticised financial regulator PSZAF and the central bank saying there were doubts the two institutions performed their tasks properly.

He said his government will seek a partnership with the International Monetary Fund and the European Union and win them over for Fidesz's plans to boost the economy.

"In my view, neither the IMF nor the EU's financial bodies are our bosses. We are not subordinate to them," Orban told a news conference on Monday.

"If we resort to help we must negotiate, and we must accept that we have to negotiate with those who give the money. And we will negotiate... but the aim of these talks is not that we listen to dictates...," he added.

Orban said the budget deficit would overshoot the 3.8 percent of GDP target this year and his government would seek an agreement with lenders on measures to contain the deficit.

Hungary's forint currency and markets have been buoyed by the prospect of a strong government and further gains are seen in the short term, but Fidesz will not enjoy a long period of grace, analysts have said.

Investors will want to see clear plans soon from the new government on how it aims to cut taxes over coming years and also maintain hard-won fiscal stability, taking down Hungary's public debt- currently at around 80 percent of GD.

Fidesz has said it would reduce taxes, create jobs, and cut state bureaucracy but has not yet revealed detailed plans on how it wants to overhaul the inefficient local government sector, and reform health care and education systems.

When asked if his government would overhaul the system of financial supervision and the central bank, possibly merging the two institutions, Orban declined to give details.

"The laws on the central bank and the financial supervision are created by parliament, it has the right to change them or leave them in effect. We will discuss this with the parliamentary group," Orban said.

He also declined to comment on whether he will seek personnel changes at either institution, but with reference to the central bank, he said, "We want to be proud of this institution (the central bank), including its leaders. That is not a shelter for off-shore knights."

Fidesz had repeatedly criticised central bank Governor Andras Simor before the elections over his investments in a Cyprus-based firm and over what they said were serious policy mistakes by the central bank.

Reuters

 

Last Mod: 26 Nisan 2010, 14:33
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