An agreement with the IMF/EU could also reduce the level of the National Bank of Hungary’s international reserves, which would also mean savings, Pleschinger said.

He added that it would be unwise to “burn up reserves in an economic environment threatened by crisis”, thus the country’s almost €5.5 billion worth of debt — excluding discount treasury bills — turning over this year would be refinanced on the market.

Pleschinger said the Government Debt Management Agency (AKK)’s forint securities issues had exceeded plans. As a result the debt manager had repaid from forint issues about HUF 180 billion in maturing foreign currency debt [to the IMF] in February and about the same amount again in May, exchanging the forints into euros.

Pleschinger said a final vote on a planned duty on financial transactions might not take place until the beginning of July. Until then, the bill can be “fine-tuned” as long as it generates revenue of HUF 130 billion next year, he added.

He acknowledged that several more rounds of talks with banks would be necessary before a bill is produced that is in line with an agreement signed by the Hungarian Banking Association and the government last December, and that causes as little damage as possible to the economy while “whitening” the shadow economy.

Under the December agreement, the government promised not to take any decisions that would negatively affect the financial sector without first consulting with banks and to halve the extraordinary bank levy in 2013.

Pleschinger noted that there was limited room for consultations before the government submitted the bill on the transaction duty because it had to take urgent measures as part of an ongoing excessive deficit procedure against the country by the European Commission.

Asked whether the transaction duty would not cause lending activity to slow further, Pleschinger said it was the task of banks to support the government’s growth strategy, adding that foreign parent banks should have confidence in the Hungarian economy and end the withdrawal of capital from the country.

He said banks would shoulder 75-80% of the duty and retail clients 20-25%.