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Hungary prime minister expects deal for financial aid with IMF to be completed by autumn

Hungary's prime minister said Wednesday he expects a deal for a precautionary loan from the International Monetary Fund and the European Union to be completed in the autumn. Viktor Orbán said that while there were still some differences over the terms to be ironed out, negotiations were progressing. Orban said discussions about the sums involved had not yet been touched upon, though a deal of about €15 billion ($18.8 billion) is expected.

"Negotiations with the IMF and the EU are advancing at a good pace and according to schedule," Orban told a group of foreign correspondents, adding that the government was expecting to give its reactions to separate IMF and EU proposals in the next couple of weeks. "This is the biggest issue of the upcoming political season."

Orbán said he would propose that lawmakers in his governing Fidesz party adopt a resolution preventing any IMF deal from undoing a series of subsidies and tax breaks for employers, part of a job creation plan that is one of Orbán's main political objectives.

The parliamentary faction of Orban's governing Fidesz party is holding a three-day meeting starting Wednesday ahead of next week's start of a new legislative session.

The Hungarian economy is in recession and contracted by an annual 1.2 per cent during the second quarter of 2012, while the country's annual inflation rate stood at 5.8 per cent in July, the highest in the EU.

In late 2008, under a Socialist government, Hungary became the first EU country to receive an IMF-led bailout. The Orbán government, however, decided not to renew the loan agreement in 2010 so it could implement its economic policies without IMF control. But the increasing weakness of the forint, the Hungarian currency, and investors' growing loss of trust in the country's economy made the government abruptly change its mind at the end of last year, when it again sought IMF help.

Source: AP

Last Updated on Friday, 30 August 2013 09:11

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