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Orbán and the IMF

November 17th, 2011

Ever more analysts are asking themselves whether Hungary will be able to get away without requesting, at some future moment, a new loan from the IMF. Both Népszabadság and an influential political scientist consider what political problems such a development might cause for PM Viktor Orbán.

This week Népszabadság was told by “influential sources” that PM Viktor Orbán  suggested behind closed doors that, “if the IMF is back, I am out.” Fidesz floor leader János Lázár reacted with the following words: “I can remember no such reference.” (See BudaPost November 16. http://budapost.eu/2011/11/hungary-risks-a-downgrade/ )

It would not be wise for any government to prioritise an IMF intervention – writes political scientist Gábor Török in his blog. He believes that from both a political and financial point of view it would be better for the government of the day to finance the country from the market, and there is little doubt that conflict with the Monetary Fund is good for the government’s PR.

Török, nonetheless, describes the total dismissal of the IMF (in September last year) as  “both stupid and pointless, and harmful not only for the country, but for Fidesz as well”.

“In the worst case scenario, is there any way the PM and the government could choose the only rational decision and ask for IMF help without losing their  credibility?” – asks Gábor Török. The answer, he suggests, is “no”.

Népszabadság is pessimistic about the future of next year’s budget, as it is based on a 267,5 Forints/Euro exchange rate (currently 313 Forints/Euro) and on an equally unlikely projection of 1,5 percent growth next year.

Should the government be forced to beg the IMF to return, PM Viktor Orbán „would lose all his political credibility”, even if the two-thirds majority were to continue to stand firmly by him – contends columnist Róbert Friss, who therefore believes that Viktor Orbán would reject such an option out of hand. “He would be more likely to issue a call to arms against the multinational banking system.”

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