The government sees Hungary’s relationship with the International Monetary Fund not as an emotional issue, Prime Minister Viktor Orban said on Thursday.
Orban told a meeting of national business association VOSZ that “the question at hand is what Hungary needs.”
If Hungary needs to access funds at low interest because of the high public debt and since the country is repeatedly taking out loans in order to pay for previous loans, then it is necessary to come to an agreement with the IMF, Orban said. He added, however, that this is only possible if the conditions set by the organisation do not cause more damage than what is gained financially.
The government’s task is to negotiate an acceptable deal, Orban said.
The prime minister said he was glad the IMF had not been in Hungary for the past one and a half or two years, because its presence would have prevented the government from implementing several components of its economic policy.
If the IMF had stayed in Hungary, financing Hungary’s public debt would have been about 100 billion forints cheaper each year, but the government would not have been able to draw in 600 billion forints from the bank sector or 480 billion forints from crisis taxes over three years; and it would not have been able to roll back the pension system, which resulted in an annual 360 billon forints paid into the pension fund, he added.
Orban qualified the government’s policy towards the IMF in the past period as “reasonable”.
He said it remained to be seen if an agreement on the financial transactions duty could be reached.
Jobbik slams government on “closed-door” talks, austerity
It is unacceptable that the government is holding talks with the International Monetary Fund behind closed doors about Hungary’s internal affairs and economic policy, a lawmaker of radical nationalist Jobbik told a press conference on Thursday.
Deputy group leader Janos Volner said it was also unacceptable that the IMF had a stronger voice for instance on the country’s tax matters than all four opposition parties together.
While during parliamentary debates the government had practically ignored amendments submitted by the opposition parties, it will carry out, it seems, the dictates of the IMF, Volner said.
He said the IMF always proposes only austerities to countries that start talks with it and never cares about the conditions of boosting long term sustainable growth.
In Jobbik’s estimate, the government will have to introduce austerities worth 600 billion forints (EUR 2.1bn) next year because of insufficiencies in the 2013 budget.