IMF wants steps before deciding on Hungary credit

Hungary is ready to act under an agreed programme with the IMF, it now expects a standby agreement, and the IMF wants to see steps showing the government’s strong committment before deciding on starting negotiations, statements by Hungarian Minister without portfolio Tamas Fellegi and IMF managing director Christine Lagarde late Thursday show.

Mr Fellegi and Ms Lagarde agreed that Hungary must conduct a policy to strengthen the confidence of the markets in the Hungarian economy and lay the base for sustainable development, and Mr Fellegi confirmed the Hungarian government’s committment to execute these goals under a mutually agreed program, a Hungarian statement issued after the talks between Mr Fellegi and Ms Lagarde said.

"At present we are at the point that we will most probably discuss a standby agreement which includes as important elements conditionality and review too. The specific form and amount will depend on the negotiations", Mr Fellegi told journalists after holding talks with Ms Lagarde in Washington late on Thursday.

In a statement issued after the discussions, the IMF managing director said that “I indicated that, before the Fund can determine when and whether to start negotiations for a Stand-By Arrangement, it will need to see tangible steps that show the authorities’ strong commitment to engage on all the policy issues that are relevant to macroeconomic stability. Support of the European authorities and institutions would also be critical for successful discussions of a new program.”

Speaking to journalists, Mr Fellegi said he will hold talks with European partners next week in order reconcile disagreements and to reach a three-party agreement on the schedule and the start of the negotiations.

Mr Fellegi underlined the importance of starting official talks at the earliest possible date.

He said the Hungarian government was willing to discuss any concerns raised by the partners.