HIGHLIGHTS-Hungary Deputy PM Navracsics comments on economy

BUDAPEST, June 23 (BestGrowthStock) – Followings are key comments
from Hungarian Deputy Prime Minister Tibor Navracsics in an
interview to Reuters on Wednesday.

(For story on the interview, click on [ID:nN23560945])


Question: Will Hungary seek to extend the (loan) agreement?
Answer: “Yes.”

“Of course we want to achieve conditions (at the talks),
which on the one hand would continue to ensure that the
Hungarian budget and Hungarian public sector can be funded, and
on the other hand … we can make them accept our objectives
which would allow Hungary to join the recovery in Europe, when
it starts, as fast as possible.”

“For that we need structural changes… When we talk with
the IMF, the EU, we will try to bring in these factors and
reach an agreement … which would give us room of manoeuvre in
this field. Certainly for that we also need to put down a
roadmap for the IMF and the EU which allows them to see the
direction of the changes launched and also makes the timetable
more calculable.”


….we concentrate with all our nerves on meeting the 3.8
percent (full-year target).

“Obviously, during the planning of next year’s budget we
will have to reckon with whether we can meet (the 3 percent
2010 target). We hope we can meet this undertaking by the
(previous) Bajnai government, which would bring the budget
deficit below 3 percent. But of course we have already seen
that even some of the officials of the previous government
admit and think tanks also believe that even the 3.8 percent
(target) will be very-very hard to meet, and (we have seen)
that the international conditions have become more unfavourable
than what was calculated when the budget was planned.”

Question: Is it possible that Hungary will try to negotiate
a higher deficit for 2011?

“We will see, that will hinge on what international
situation we will face at the end of the year.”


Question: Will the date of euro entry be part of the talks
with the IMF and the EU in the autumn?

“This must be there… even though the debates around the
euro accession date are only partly driven by that our
(economic) indicators are worse (than needed for euro entry),
but also because several of the countries which want to join
the euro zone have got uncertain whether this is the good
moment to join… Nevertheless, I think, no European Union
member state outside the euro zone can write up an economic
policy plan, which does not have at least an approximate date
regarding euro adoption.”

Question: Any indication about Hungary’s euro entry date,
even as a range?

“Much has been said (about that), if I remember well the
consensus was somewhere around 2014-2015 based on the earlier
comments. If we can meet what the earlier government have
undertaken, (those dates are) not out of the question, even
though, as I said the international environment has
significantly deteriorated since then.”


“Even if we were planning (to change the central bank law),
it can be done only along the line that (the bank’s)
independence is not hurt. Otherwise, changing the central bank
law is not on the agenda now.”

“I think the central bank governor and the central bank
management should take into account that the 8 million forint
(monthly) salary (of Governor Andras Simor) counts very high in
Hungary today… I think if there are conflicts, as I have said
before, we need to sit down, talk and negotiate. Of primary
importance to me would be that the government and the central
bank discuss their monetary policy goals and the path leading
to those goals.”

“When the prime minister feels it timely to talk with the
central bank governor, he will certainly contact him.”


“He (Simor) somehow once forgot to include incomes from his
company in his declaration of wealth. He became central bank
governor and did not disclose part of his holdings in companies
to the public. This is a problem, which, I don’t think that
there are too many countries in Europe in which this problem
would be neglected without a word. This obviously has a bearing
on differences on professional policy but in this case also I
think there is no other way than to talk and clarify this
situation somehow.”

Question: Does Simor have to step down?

“I would say that (we) have to sit down and talk this
(private investments) over. I would be curious to know Andras
Simor’s answer, I have heard only one explanation from him,
that he forgot to write that in. This, you know, is a thin


“We have been continuously saying for about two years that
lower interest rates would be the best for companies regarding
their access to credits, but of course we accept the Monetary
Council’s decisions in every actual case.”

“When we have an exchange rate policy, two interests must
be reconciliated: one is the Hungarian economy’s interest, and
the other one is the interest of Hungarian households as there
are many foreign currency (Read more about trading foreign currency. debt holders in the country,
therefore the forint exchange rate is, apart from being an
economic issue, is also a social policy issue.”

Stock Market Research

(Reporting by Sandor Peto/Gergely Szakacs)

HIGHLIGHTS-Hungary Deputy PM Navracsics comments on economy