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Hungary has no preconditions for IMF talks, says PM Orban

Hungary has no preconditions for the upcoming talks with the International Monetary Fund, Prime Minister Viktor Orban said in an interview given to MTI on Sunday.

Concerning Hungary's economic laws, including the new central bank act, Orban said the arguments he had received were all of a political nature, and he saw no reason why parliament should amend any of them. He added, however, that the government was open to receive and consider "any opinion or idea". 

Orban said that the central bank act has increased the independence of the national bank, and it has not been proven otherwise. He added that the bank's rate-setting Monetary Council had once been expanded - in 2004, after Hungary had joined the EU - and while the European Central Bank voiced disagreement, the European Commission did not protest the move. He also repeated the government's pledge not to integrate the central bank with financial watchdog PSZAF before the mandate of the governor of the central bank, Andras Simor, expires.

The government has authorised Tamas Fellegi, Hungary's chief negotiator for talks with the IMF and the EU, to approve of any loan construction without further consultation with the government which would "strengthen Hungary's market positions" and ensure that the country can obtain financing from the international money markets. "We expect from the IMF a safety net. We want to get the funds for operations from the international markets, but we need to give them a clear signal that Hungary has the necessary resources for safe operations and growth even if available resources get scarce or the euro crisis drags on," he said.

Fellegi will also have the authority to express Hungary's readiness to cooperate with the IMF in the implementation of a programme to be elaborated during the negotiations. It is natural that the IMF wishes to see economic policies that will guarantee that its funds invested in the country will be paid back, the prime minister said.

During the IMF-EU talks the government will not submit further economic bills to parliament, Orban said. He argued that the legislation necessary for Hungary's new economic structure were now in place.

Hungary is interested in an early agreement with the IMF, Orban said, adding that all conditions were given to achieve that end. He said, however, that the government was not only aiming to avoid a crisis but to meet objectives of its growth plan.

Answering a question about Hungary's 2012 budget, Orban said he was confident it would "last" until the end of the year, arguing that it contained significant reserves and that the government had "done its best" to ensure stability of the national currency and of banks in the country. He added that all further means were under control by the national bank, which control, under the principle of the bank's independence, could not be restricted.

Orban repeated his earlier position that the value of the forint was not determined by the real performance of the national economy but a series of attacks by "global players". He said that fending off those attacks necessitated further cooperation between the government and the central bank. He added it was not Hungary alone that was under attack but the whole of Europe, and welcomed steps towards a closer budgetary cooperation of the euro zone countries as a means of self defence.

Concerning rumours about the bank accounts of private individuals, Orban said that private contracts such as those between residents and their banks were not the government's business. He also warned that "spreading rumours about bank accounts is punishable under the penal code".

On another subject, Orban confirmed that he had sent a reply to a recent letter by US Secretary of State Hillary Clinton expressing US concerns, and said that his reply could not be made public unless Clinton, the initiator of the correspondence, agreed.

Orban said he was not planning to reshuffle his government.

Asked about his overall expectations for the year, the prime minister said that 2012 would see a period of consolidation, when Hungary's new, "competitive social and economic structure" would be reinforced so "that everybody finds their place and realise their objectives".