A negotiating team from the “troika” of the International Monetary Fund, European Union and European Central Bank arrived in Budapest on Tuesday to begin negotiations over a EUR 15 billion bailout. The talks had been delayed since the National Economy Ministry announced last November that it had applied for a “precautionary” credit line, but a key obstacle was removed this month when the government back-tracked on legislation that threatened the independence of the Hungarian National Bank (MNB).
Government officials have said they hope to have a deal in place by October. However, analysts have expressed scepticism which was reinforced by the government’s chief negotiator, Mihály Varga, in an interview published by figyelo.hu on Thursday. “There are differences (in opinion about Hungary’s economic outlook for the coming two years) but I would not like to speak about them,” Varga said, citing an agreement not to comment while talks are in progress.
Opposition Socialist lawmaker Tibor Kovács, deputy chair of Parliament’s economics committee, accused the government on Wednesday of having no intention of striking a deal. He said the government was “playing with fire” and cited an MNB estimate that the delay so far had cost taxpayers HUF 75 to 100 billion (EUR 263.99 to 351.96 million). Kovács said that, even if the government does not want to reveal to the public what offer it has placed on the negotiating table, it should at least brief the economics committee.
IMF negotiators left Hungary in November after the government unveiled its controversial central bank law, seen as a bid to gain influence over monetary policy and possibly even access to the nation’s currency reserves. The government’s return to the IMF signalled an embarrassing end to a much-trumpeted “battle” for Hungary’s “financial autonomy”. Despite previous rhetoric demonising the Washington-based lender, Prime Minister Viktor Orbán appeared more conciliatory on Monday when answering questions from reporters.
“The IMF is not our enemy,” he said. “I see that part of the press presents them as little devils (krampuszok) who don’t give but take and if you don’t watch them there’ll be trouble… but it’s not like that: the IMF is our bank and we are a member of it.”
Orbán reiterated, however, that his government would not sign a deal that is not in the interests of the economy and the people.
Parliamentary Speaker László Kövér, a key Orbán ally, took a similar line in a Sunday interview on public service broadcaster MTV. “I don’t think the government will allow itself to be blackmailed, we don’t need the IMF’s money,” Kövér said.
There was no comparison with the situation in 2008 when a EUR 20 billion bailout saved Hungary from sovereign default, he said. “There is nothing to justify turning on its head the policies that we have pursued over the past two years.”