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Hungarian government plans new agreement with IMF and EU

The new Hungarian government intends to strike a new financial agreement with the International Monetary Fund and the European Union, Prime Minister Viktor Orbán's chief advisor György Szapáry said on Thursday.

They would extend Hungary's existing standby loan arrangement, expiring in October 2010 until the end of this year and would conclude a new agreement for 2011, Szapáry said, speaking on a television program on Thursday morning.

Szapáry, a former deputy governor at the National Bank of Hungary, said that the government would begin talks regarding the plans when IMF and EU officials arrive to Hungary for a scheduled visit in July.

The government does not plan to call down the remaining resources under the €20 billion loan agreement approved to the country in November 2008 by the IMF, the EU and the World Bank, Szapáry said. He did not exclude calling on the remainder, however, if events in the global economy force Hungary to do so.

Hungary has called a combined €14.2 billion of the originally 17-month arrangement which was extended to October 2010. Released but uncalled installments from the IMF facility total €2.4 billion. (MTI-ECONEWS)