Hungary has no interest in dragging out IMF talks, says Fellegi

Budapest, May 17 (MTI) – It is in Hungary’s basic interest to sign a credit agreement with the International Monetary Fund and European Union, and this can realistically take place in the autumn, Tamas Fellegi, Hungary’s outgoing chief negotiator, told a conference organised by the Hungarian Business Leaders Forum on Thursday.

Hungary has no interest in dragging out the talks without reaching an agreement, Fellegi said.


“The Turkish card was not and will not be on the agenda,” he added, referring to the Turkish government’s continual postponement of talks with the IMF with the real aim of improving the country’s position on the capital markets.


He said Hungary’s negotiations with the IMF/EU could start in June and close with an agreement in the autumn.


Iryna Ivaschenko, the IMF’s Budapest representative, said on the sidelines of the summit that talks could start with the Hungarian government once concerns over the central bank’s independence had been resolved. She did not give any concrete date as to when talks could start.


“We do welcome the progress that has been made in terms of political preconditions to start the negotiations vis-a-vis Hungary and the EU….We are ready to start (talks) as soon as the outstanding issues on the central bank independence are resolved,” she said.


“At this point the ball is in the government’s court,” she added.


Ivaschenko said the IMF did not apply double standards in respect of any country.


She said the IMF did not want to force anything on individual countries and always sought to agree a programme which ensured that the country in question could use international assistance to reduce its vulnerability. Ivaschenko said the main goal, backed by past experience, was that the better the programme is shaped as a joint project, and the more the Hungarian government is involved, the better it can function, which is the best guarantee for implementation.


She added that IMF programmes were flexible and not set in stone from the start. Quarterly upgrades gave room for adjustments, she added.


Late on Wednesday, Mihaly Varga, the state secretary heading the Prime Minister’s Office, told public television that talks on a precautionary loan would likely be quicker than preparations now that Hungary had fulfilled the preconditions set by the IMF and EU.


Varga, who was appointed to Hungary’s chief IMF negotiator earlier this month, said that Hungary had a vested interest in reaching a loan agreement with the IMF and the EU as soon as possible, and, in any event, sought a precautionary loan, he said. Talks with the IMF and the EU are likely to start in early or mid-summer, he said.


Varga will take over the post from Tamas Fellegi as minister without portfolio in charge of Hungary’s side of the talks on June 1.


Hungary first of all needs a safety net enabling it to generate funding from the market, Varga said, adding that the Hungarian government set no preconditions and would accept the 15-billion-euro precautionary loan expected by the markets.