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Cautious optimism because of IMF talks

July 18th, 2012

Magyar Nemzet hopes the IMF will not put forward unacceptable demands, while Népszabadság wants moderation to prevail on the government side.

In Magyar Nemzet, business commentator Anna Szabó believes the credit line talks are an unwelcome consequence of the huge debt previous left-wing governments left behind. When they were given a bailout loan in 2009, they accepted whatever conditions were on offer, including unusually short deadlines which imposed a heavy payment burden on the new right-wing government. Szabó admits that two years ago, when the global outlook was more favourable, the IMF was “shown the door in a not too elegant fashion”, but Hungary has used its newly acquired elbow room to introduce bold measures, i.e. taxing the most lucrative businesses, to put public finances in order. Meanwhile, international financial conditions have become extremely volatile, and Hungary needs a safety net. Szabó thinks “moderate optimism is justified”, unless the IMF insists on taxing property or puts forward “unexpected preconditions”.

In Népszabadság, Zoltán F. Baka remarks that Fidesz leaders issued conflicting messages about the negotiations over the weekend. While László Kövér, the Speaker of Parliament and a leading Fidesz politician said Hungary does not need IMF money, Mihály Varga, the cabinet minister in charge of the talks admitted that next year Hungary might be compelled to draw on the IMF credit line. Baka does not believe that any country should take a loan without actually wanting to use the money. This year, he argues, the government might scrape through by financing its payments from the markets, but in 2013 it may badly need the bailout money. The left-wing columnist describes as fortunate the fact that of the two officials, it is Mr Varga who will conduct the negotiations with the IMF.

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