Left-wing analyst thinks IMF talks are a sham
November 30th, 2012A leading commentator at Népszabadság claims the government does not want to reach an agreement with the IMF, because it finds the price – a return to “orthodox” economic policy -too high.
In a university lecture on Wednesday, Mihály Varga the cabinet minister, in charge of the credit talks with the European Union and the International Monetary Fund said that the government intended to strike a deal with the international institutions as soon as possible, but not at any price. Any attempt by the government to lay further heavy burdens on the population might result in Greek-style unrest, he argued, which would immediately annul the savings expected from austerity measures. If that was to be the price to pay for an agreement, Mr Varga continued, then the lack of a deal could be considered a positive outcome.
In Népszabadság, Róbert Friss interprets those remarks as an admission by Mr Varga, of “what we all knew”, namely that “there will be no deal with the IMF and the EU”. The leading left-wing commentator says Mr Varga’s “discovery that the lack of an agreement can also be considered a positive outcome is the ultimate scene of a clown show that has been dragging on for a full year”. He finds further proof in the way government spokesman András Giró-Szász commented on the popularity of the new euro-bonds that sold very well, showing, according to the spokesperson, “market confidence towards the Hungarian State and the Hungarian economy”. This means, Friss adds, that the government hopes to get along without a loan from the IMF. The problem is, he continues, that the interest to be paid on the bonds is higher than the price of the IMF loan would be. If the government still prefers the market, he argues, it is because it does not want to fulfill the conditions of an IMF credit line, namely a return to “a traditional and predictable economic policy”. Friss goes as far as contending that Hungary will not be able to repay its debt, but ends his comment on a less apocalyptic, although pessimistic note: he suggests that over the next three to five years Hungary will not be able to catch up with the rest of the Visegrád countries (Poland, Slovakia and the Czech Republic) – not even if a new government were to be set up in 2014.