Finance Minister: Hungary’s ‘model’ crisis management recognised by IMF
Hungary today is considered a donor country, Varga told public media, adding that it was in this respect that he had held talks with the vice president of the World Bank. He said they had agreed to explore opportunities for Hungarian businesses to join programmes in Ukraine financed by the World Bank.
Varga, who took part in the plenary session of the International Monetary and Financial Committee (IMFC) as a deputy governor representing European countries, said he had aimed to convey the special situation the central and eastern European region is in due to the war between Russia and Ukraine. He emphasised the importance of finding a solution to energy dependence, including through alternative means, adding that the region also needed to manage the energy crisis triggered by sanctions.
High energy prices are pushing inflation higher in the CEE region, Varga said, adding that this was a burden on the middle class that was very hard to relieve without state support. This was why, he said, the Hungarian government had been right to preserve its price caps on utility bills up to average consumption. Varga said his talks in Washington had touched on the Hungarian price cap scheme as a “best practice”.
The minister said that whereas in the past Hungary had needed money from the IMF, he now felt that the organisation was even open to Hungary’s solutions and was “showing interest in us”.
The Hungarian solution put in place after 2010, namely that the response to an economic downturn should be stimulus rather than austerity measures, is an element that has since been added to the IMF’s package and is now being discussed in connection with the economic crisis management of several countries, Varga said.
He said Hungary was no longer and did not want to be a country that was forced to rely on the IMF’s resources. Instead, Hungary now wants to introduce to the IMF the solutions that allowed it to go from being “a country aided by the IMF” to one that had the highest growth rate in the European Union before the coronavirus pandemic, he added.