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IMF still sees a slim chance

Hungary still has a slim chance of reaching an agreement with the International Monetary Fund that would allow it access to the remainder of its existing credit line, but the government first needs to make a radical change in its attitude to fiscal reform and the independence of its central bank, an IMF official said in an interview with Dow Jones on Wednesday.

"The talks can resume when the government is prepared to put on the table and commit to a set of sustainable and durable fiscal plans of a structural nature, especially so for 2011, and also address the outstanding issues in the financial sector, including central bank independence," Iryna Ivaschenko, the IMF's resident representative in Hungary, told Dow Jones.

She also emphasised that the IMF and the EU cannot be separated on the matter of lending to Hungary. "We are together on this with the EU, it's a joint program and it will a joint program," Ms Ivaschenko said.

Hungary's talks with the IMF and the EU were suspended on Saturday about the remainder of its existing EUR 20bn credit line, with the government saying it refuses to impose additional austerity measures after four years of cutbacks.

Instead, Hungary wants to meet its budget targets with unsustainable one-off measures such as a controversial tax on local banks, the IMF said. (MTI)