Highlights: Hungary PM Orban’s latest comments on EU/IMF

BUDAPEST (BestGrowthStock) – Hungary hopes to reduce its budget deficit below the EU’s 3 percent ceiling in the future but seeks equal treatment with other member states on a time frame to achieve that target, Prime Minister Viktor Orban said.

When asked if Hungary’s government still intended to seek a new precautionary deal with the IMF for 2011 and 2012 Orban said this matter was insignificant now, as the main issue was to reach a deal with the EU on bringing the budget gap below 3 percent.

Followings are his key comments at a press conference after meeting Croatian Prime Minister Jadranka Kosor.

TALKS WITH EU

“Our talks with the EU are not over. Hungary is a member of the EU and all member states in the EU have undertaken to reduce their deficits below a certain level, namely 3 percent.

“Hungary’s deficit today based on this year’s target is 3.8 percent, and we will achieve this. Hungary by the end of the year will bring its deficit to 3.8 percent (of GDP) as it has undertaken.

“But with this, the talks have not ended as the EU wants to negotiate with us, as well as 20 other member states in the EU, on how we will manage this 3 percent deficit. Hungary will be part of these negotiations. This is called an Excessive Deficit Procedure.”

“Shamefully, Hungary has been under this procedure for almost six years now, and our shame is only slightly diminished by several others falling next to us. Today, more than 20 states are under the excessive deficit procedure.

“We want to agree with the EU. This is not going to be a deal between Hungary and the EU, but a deal signed by all member states, specifying when countries above the desirable deficit level bring their deficits below 3 percent.

“We will negotiate this agreement along with the other member states and as part of a budget policy based on equal treatment, bring our deficit below 3 percent.

“Hungary has a good chance for this as in terms of the deficit we are the fifth or sixth best performer. It will be easier for us to reach the 3 percent than those sates with 7, 8, 9, 10 or 11 percent (deficits).

“The Hungarian economy can boldly undertake this position in talks with the EU. We will have a single demand, namely that of equal treatment, that is, the same timeframe must be set for all to meet the EU’s expectation.

“In the next few weeks and months Hungary will hold talks with the EU … and the IMF, as it has ended its mission and the agreement has expired, will deal with countries in need of the IMF’s direct support.

“We are running a deficit of 3.8 percent and state debt, although high, it is in the middle of the field on a European comparison.

“We hope economic growth next year will be above 2 percent … and we plan further tax cuts that will boost the economy, so we have a good chance that, based on the agreements with the EU, Hungary will again become a successful country.

WHEN ASKED IF HUNGARY INTENDS TO SEEK NEW IMF DEAL:

“The important question is an agreement with the EU, everything else is secondary or insignificant.

“We want to talk with everybody, we want to consult with everybody, in our mind the IMF is by far not the devil incarnate, we are happy to talk to them as well. But we must agree with the EU. Let me stress, it is not should, but must (agree with the EU).

“And we must agree on terms that the Hungarian people deserve.

“If we agree with the EU and it becomes clear that it will be easier for us than other states to achieve the 3 percent deficit, that will strengthen Hungary’s credibility in markets to an extent that will make debt financing easier.

“In 2011 and 2012 we must pay back the money we got from the IMF. The Hungarian economy must be strong enough to do that and it will be strong enough.

“What Hungary needs is a uniform European agreement based on equal treatment, applicable to all member states exceeding the (EU’s) deficit level. Until this agreement is reached, it would be unwise to speak about levels and timeframes, moreover, it would be irresponsible.”

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(Reporting by Krisztina Than and Gergely Szakacs; Editing by Jon Boyle)

Highlights: Hungary PM Orban’s latest comments on EU/IMF