Hungary hopes for IMF deal, but only with best conditions, says Varga

Budapest, October 3 (MTI) – Hungary is hoping to resume talks soon with international lenders on a financial safety net, but it does not seek an agreement at any cost, Mihaly Varga, chief negotiator for talks with the IMF/EU, said.

In an interview to the weekly Heti Valasz to be published on Thursday, Varga said a loan from the IMF was needed because the European economy was facing an uncertain period; deep financial troubles of EU states could dry up the securities markets and Hungary’s high debt level could make it impossible to finance the country.


However, he said Hungary could certainly finance itself until mid-2013 or longer, and in any case the government could issue forex bonds on international markets, though it was a question at what cost.


An IMF deal would help start economic growth in that it would make risk premiums drop, Varga told the paper.


“If we are able to access funds cheaper, we have more left for supporting small businesses,” he said, noting that the government’s priorities were exiting the debt trap and creating jobs.


Varga said he considered the IMF loan important, but only at the best possible conditions.


“It is well possible that in the end the result [of my work] will be that we don’t have a deal with the IMF,” he said.


“My personal opinion is that we must have an agreement. But this cannot be drawn out for years,” he added.


Varga will represent Hungary at the International Monetary Fund’s annual meeting in Tokyo on October 14. At the meeting he is scheduled to meet Olli Rehn, the EU’s economic and finance commissioner, he told the weekly.