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Varga: IMF talks to be concluded and signed this fall

The subject of upcoming talks between Hungary and the International Monetary Fund is a stand-by facility rather than an FCL or PCL, IMF Director of External Relations Gerry Rice said in a Washington, D.C. press conference on Thursday.
An IMF delegation, together with that of the EU, is scheduled to commence talks with Hungary's government on 17th July, Rice said at the orgnization's scheduled press conference on Thursday. The mission is going to discuss the latest economic trends with the government, he added.
The talks will be about a standby facility of a precautionary nature, Rice said, emphasizing that "Hungary would treat the joint IMF-European Union program as precautionary and did not intend to draw any of the funds."
As recently as a few days ago, statements were made by the government to the effect that Hungary was hopeful of securing a flexible credit line rather than a standby facility which has more stringent prerequisites and assessment at regular intervals.
Representatives of the European Commission and the International Monetary Fun are scheduled to begin official talks with Hungary next Tuesday and stay in Budapest until the 25th of July.
The issue of property tax or wealth tax may come up in Hungary's talks with the IMF, however the government is adamant on these points, head of Hungary's delegation Mihály Varga said.
Should property tax come up as a subject of discussion in talks with the EU and the IMF, Hungary will refer to earlier Constitution Court verdicts that ruled out the possibility of adopting this type of tax. It is currently not possible for Hungary to adopt a property tax, the conditions for such are not given; this has been the subject of an earlier Constitution Court decision.
Hungary's tax regime will become a true flat-rate system as of 2013. In this regard, the government is requesting the IMF to wait and see how the new tax regime performs in 2013 before suggesting changes, Varga said.
In earlier reports, the IMF noted that a flat-rate tax regime helps improve economic competitiveness, Varge reminded.
Recession is not going to last forever, and when it's over Hungary's tax regime will be able to promote faster economic growth and create more jobs, the Minister said.
Hungary would like to be approved for a precautionary credit line. This is a type of credit "which is there, but you don't actually want to use it, it is not necessarily needed".
According to Varga, Hungary is not in need of money now, the country is able to finance itself, however the current economic situation in Europe makes it impossible to see whether this is going to remain so.
Varga said an agreement will be concluded and signed this fall.

Last Updated on Friday, 30 August 2013 09:11



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