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Szajlai strikes back

April 12th, 2012

A conservative columnist urges the government to reach an agreement with the IMF, and implicitly rejects an official communique condemning his critical stance on the government’s economic policy.

“There is no such thing as a Plan B; Hungary is definitely entering into a credit line agreement with the EU and the IMF,” – the State Secretary of the Ministry of  the National Economy told the press on Tuesday. “We are negotiating, shedding sweat and blood, first and foremost in Brussels, and secondly in Washington D.C.” – added Gyula Pleschinger, who is also a member of the Hungarian delegation tasked with launching talks with the EU/IMF tandem on a new line of credit.

In Magyar Hírlap, Csaba Szajlai finds it deplorable that, despite an official announcement last November, and a series of official statements like that of Mr Pleschinger, the cabinet has so far failed to begin talks with the International Monetary Fund. Szajlai squarely blames the Hungarian side for that failure.

He appears unimpressed by an unprecedented attack on him personally by the Ministry of the Economy, because of his criticism of the government’s fiscal policies.  In an official communiqué, the Ministry called him “irresponsible” for questioning “the successes of the Hungarian people”.

Szajlai in fact seems neither discouraged nor convinced, as he still fails to discern those successes. Quite the contrary, he points out that by the end of March this year, the public deficit had swollen to 90% of the target for the whole year, and the government has had to resort to painful supplementary cuts to keep the budget under the 3 per cent benchmark.

On the other hand, Csaba Szajlai calls Mr Pleschinger’s statement ‘comforting’, as he had concluded up to this point that the government was not serious enough about the IMF talks. He found that attitude unacceptable, since if Hungary can only refinance itself at a 9 percent interest rate, it will be unable to profit from this year’s more positive market tendencies.

The road to the IMF leads through Brussels, warns the columnist, and Hungary has to meet the criteria, since it is Hungary that badly needs that credit line, not the IMF or the EU. To support his argument, Szajlai points out a few unfavourable tendencies: the Hungarian National Bank’s foreign currency reserves are decreasing, foreign investments are in a backslide, 70 per cent of public debt is in foreign hands and growth expectancy is extremely poor.

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