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IMF packs its trunk

July 31st, 2013

A pro-government columnist welcomes PM Orbán’s decision to repay the IMF loan as soon as possible. The main left-wing daily, however, warns of the undesirable consequences of getting rid of the IMF.

In his weekend speech in Transylvania (see BudaPost July 30)Viktor Orbán announced that he had ordered Finance Minister Varga to repay the IMF loan by mid-August (see BudaPost July 17).

There is nothing to celebrate in the fact the Hungary is repaying the IMF loan, Népszabadság contends in a front page editorial. The leading left-wing daily points out that the Orbán government has reduced the deficit with painful restrictions rather than boosting economic growth. As a result, poverty is on the rise: as many as 4 million Hungarians live under the poverty line, including 1.5 million in deep poverty, Népszabadság remarks. The daily adds that getting rid of the IMF does not imply a decrease in public debt. On the contrary, Népszabadság concludes, the relatively cheap IMF debt will now have to be replaced by more costly loans, and higher interest rates will further slow down the Hungarian economy.

In Magyar Nemzet, Anna Szabó welcomes the decision to repay the IMF loan as soon as possible. By getting rid of the “international shackles”, the Hungarian government will have more room to manoeuver, Szabó contends. The pro-government pundit recalls that Hungary turned to the IMF for a loan in 2008 in order to avoid imminent insolvency. The agreement which the left-wing liberal government forged with the IMF implied that the loan should be repaid by the Orbán government. Szabó believes that the fact that the left cannot even today imagine a sustainable economic path without the supervision of the IMF, clearly shows that they have no clue how to govern. As for the practical consequences of the repayment of the IMF loan, Szabó writes that as a result of the successive base rate cuts by the National Bank, the Hungarian government can now sell government bonds at lower interest rates than those offered by the IMF in 2008.

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