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Is the IMF offer irrefutable?

January 10th, 2012

Népszabadság believes Hungary’s chief IMF negotiator will just have to sign the draft he will be shown in Washington, no matter what the conditions are. Magyar Nemzet contends however that the government should not just listen to what the IMF wants.

Hey Ashton, head or gut?” In Népszabadság, Zoltán F. Baka likens the position of Hungary’s IMF negotiator to a character in The Last Boy Scout (1991 action film starring Bruce Willis), who after having gone to bed with the wife of the main character, has to choose where, not whether, he will be hit. As long as the government does not have the IMF credit line behind it, investors will continue to extort unsustainably huge rates when buying Hungarian bonds. Therefore, Baka concludes, whatever the IMF requires in exchange for opening a credit line, must be accepted by cabinet minister Tamás Fellegi, the Hungarian negotiator.

The forthcoming talks are only of a preparatory character, and what is really at stake is whether the IMF delegation receives a mandate to negotiate with Hungary very soon. Late last year, the first round of preparatory talks was suspended because the Hungarian negotiator could not promise the withdrawal of two bills (one on the National Bank, and another on financial stability) which the European Union found controversial (See Budapost, December 19, 2011).

In a comment on the demands the IMF is reported to be preparing to submit to Hungary, Magyar Nemzet’s deputy editor Szabolcs Szerető believes it would be high time to ask what the people of Hungary want. Over the past few days, the pro-government daily has published three consecutive columns suggesting that the government has no choice but to agree with the IMF as soon as possible (See Budapost January 6). This time, the deputy editor contends that the IMF is asking for too much and practically intends to “put the government and Parliament under trusteeship again, to couple austerity with austerity, to slash pensions, and risk a welfare catastrophe…. Is that really the recipe for growth? Is that really an irrefutable offer?” – Szerető asks.

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