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The EU sets vague conditions for credit talks

April 13th, 2012

The main pro-government daily describes the attitude of the European Commission towards Hungary as nonsensical, for it releases only vague statements on what conditions Hungary should fulfil in order to be judged fit to start negotiations with the IMF on a long awaited credit line agreement. According to the biggest left-wing newspaper, on the other hand, the real problem is that Brussels has no trust in Prime Minister Viktor Orbán.

The spokesman of the European Commission said preconditions for starting formal talks “are actually rather clear.” Olivier Bailly was responding to Hungarian Foreign Minister János Martonyi’s words on Tuesday about the government not knowing the specific preconditions it should meet. “In order to have a proper discussion between the IMF, the central bank, the European Commission and the Hungarian authorities on a possible loan to Hungary, we need to secure the legal environment that would allow the confidence of investors in the country (to return). For the time being we consider that this confidence is not there,” said Olivier Bailly, adding that the European Commission encourages the Hungarian government to do “whatever is necessary” to “allow investors to return and to lower the pressure from the market on the economy.”

In  Magyar Nemzet, Anna Szabó calls the response from Brussels a political and economic nonsense. Should the markets have confidence in the economy, she writes, Hungary would be able to refinance itself and wouldn’t need help from the IMF and the EU. She also adds rather sarcastically that it is not even clear whether the Commission will ever decide to fix an exact date for the talks to begin.

The IMF has no specific rules regarding the Hungarian laws under scrutiny in Brussels (the independence of the central bank, the retirement age of judges and the independence of the data protection authority) and the Fund is barred under its own statutes from imposing political preconditions, Szabó points out. She goes on to cite   Pakistan, Ukraine, Macedonia and several Latin American states as examples of countries with IMF loans, despite not being in any better political and economic shape than Hungary.

In a front page editorial, Népszabadság believes that officials in Brussels will never set exact preconditions, in order not to restrict their own room for manoeuvre.

The real problem is the level of mistrust towards PM Viktor Orbán, the left-wing daily suggests. Hungary has lost its goodwill in Brussels, EU officials are digging in their heels, because they are fed up with the Hungarian government attacking them on a regular basis.

Besides this psychological factor, Népszabadság also finds a rational explanation – namely that the lesson Brussels has drawn from the example of Greece, is that financial bailouts are only feasible if the given country enjoys the confidence of the markets.

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