Hungary govt expects to close talks with IMF-EU in Q1

History

Hungary’s government hopes to close talks with the International Monetary Fund and the European Union on a financial safety net in the first quarter of this year, state secretary for economic strategy Zoltan Csefalvay said in an interview with a regional German radio broadcaster on Thursday.

"Hungary continues to be capable of financing its debt from the market," Mr Csefalvay said. He added that that financing depended on the scale of yields.

Responding to a remark that Hungarian government securities yields recently reached 10%, Mr Csefalvay asked how high the yield on Italian bonds would be if the European Central Bank were not buying the papers and how big investor demand would be for them.

He explained that Hungary was not a eurozone member and could thus not count on ECB purchases of its debt. He added that yields on the securities could drop with the help of a financial safety net from the IMF and the EU.

Mr Csefalvay said Hungary’s general government deficit, excluding one-off measures on the expenditure and revenue sides, was just 2.8% last year, under the Maastricht threshold.

He added the government was committed to keep the deficit under 3% of GDP this year too.

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