Hungary can succeed in crisis management, says former IMF deputy head

Budapest, October 29 (MTI) - Hungary s crisis management measures can be fruitful but success requires commitment, courage and a clear vision, former deputy director of the International Monetary Fund John Lipsky said on Monday.

It would be important for Hungary to increase investment and efficiency, and find a solution to reduce the debts of the public sector. These are great challenges that require efficient action, Lipsky said in a lecture at the University of Pecs in southern Hungary.

Hungary has recovered from even more difficult situations in the past, Lipsky said. Now it should change its fiscal policy, free itself from an excessive deficit procedure and tackle the problem of high taxes imposed on the financial sector which discourage crediting, he added.

Lipsky spoke in optimistic terms about the future of the euro zone and stressed the need for the EU to set up central institutions with much wider powers. If Hungary wants to draw benefit from the achievements of the euro zone, it should take part in this process, he said.

If the euro zone fails, Hungary will face much bigger problems anyone may conceive today, he said.

He projected slow growth for Hungary and its neighbours in the years to come.

Commenting on the preparations for talks between Hungary and the IMF about financial assistance, he said both sides are interested in making the economy successful.

He said he was bothered by suggestions that the IMF had a hostile attitude towards Hungary.