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FM says Hungary has no plan to draw on €6.5 billion credit line

Finance Minister János Veres said in Brussels on Tuesday evening that Hungary currently has no intention of drawing from the €6.5 billion European Union credit line that EU finance ministers approved for the country on Tuesday.

Veres said that there must be available money-market resources so that Hungary could give up drawings on the European Union loan, which is part of a €20 billion EU-IMF-World Bank support package.

Veres said that the European Commission and officials from Hungary's finance ministry will meet to determine the specific conditions surrounding loan beginning on Wednesday, adding that he expects these negotiations to be concluded in two weeks.

Veres remarked that while he could not yet say anything definite about the conditions of the loan, the memorandum of understanding signed on Tuesday contained “nothing new.” The finance minister said that the statement referred to Hungary's announced budget-consolidation program, budget-control legislation currently before parliament and proposals regarding reform of financial-sector regulations and supervision, among other items.

Responding to a question regarding the interest to be paid on the loan, Veres referred to Prime Minister Ferenc Gyurcsány's earlier statement that Hungary expects the rate to be between 4% and 7%.

Veres also said in Brussels on Tuesday evening that Hungary, Romania and Poland are conducting finance ministry-level negotiations regarding joint measures designed to curb speculation on their national currencies.

Prime Minister Calin Popescu-Tariceanu of Romania initiated the talks with Hungary and Poland earlier this week following several weeks of intense speculation on the Romanian leu, the forint and the zloty. (MTI – Econews)