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No hitch in IMF talks, says Varga

Talks between the government and the International Monetary Fund (IMF) are continuing without a hitch, and a letter of intent will be drawn up by the weekend, state secretary of the Prime Minister's Office Mihály Varga told MTI on Tuesday.

The government has time to reach an agreement with the IMF until the final vote on a package of economic legislation new week, Varga said.

Varga, who is part of the government delegation at the talks, said the European Union and the European Central Bank are also participating in negotiations. Questions over which there are differences will be cleared up by the time the letter of intent is prepared, he added.

News portal reported on Tuesday it learnt from sources that talks between the government and the IMF had stalled as the Hungarian delegation refused to budge on the government's tax package, especially an extraordinary tax on banks expected to generate HUF 187 billion in budget revenue this year.

Asked whether the IMF wants the whole tax package to be delayed until autumn, Varga said the IMF made no such request, but it did send the message that one or two regulations ought to be introduced later than the government planned. The government indicated that because of the situation at the beginning of June, the cabinet had to take immediate measures, and the proposed legislation was drawn up in this light, he said. The IMF understood this, he added.

Asked whether the extraordinary bank tax was among the measures that the IMF thought ought to be delayed, Varga only said that many proposals had been discussed. The bank tax must generate the planned revenue of HUF 200 billion (including HUF 13 billion from an existing extraordinary tax - ed.) this year, and the IMF does not doubt this either, he added.

Asked whether the economic package before Parliament could be changed as talks continue, Varga said the final vote on the package would take place next week, though some proposals would be put to a vote on July 22. (MTI-Econews)