Yields on Hungary's long-term bonds are likely to decline as the government and the central bank work together on a plan for euro adoption, Prime Minister Ferenc Gyurcsány said.
The conditions of cooperation have „improved greatly,” as central bank President Zsigmond Járai will be replaced by András Simor next month, Gyurcsány said today. Simor was announced as the nominee on February 16.
Gyurcsány has raised taxes and cut subsidies after running up the European Union's widest budget shortfall last year. The government, which has missed its deficit target every year since 2001, will propose new budget rules this year to avoid further overruns, Gyurcsány said.
„We will make proposals that will increase the long-term chances of the Hungarian economy staying in balance,” Gyurcsány told a meeting of the EU Chamber of Commerce in Budapest today. „If these two plans come true, there's a chance for long-term interest rates to decline.” (Bloomberg)