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Orbán: Govt, cen bank at cross-purposes; debt cuts on horizon

The prime minister on Tuesday described the views of his government and the National Bank of Hungary on economic policy as being very different.

Viktor Orbán told an evening programme of Hungarian public television that he was satisfied with his government's work.

Orbán said the problem between the government and the central bank was that "we are pulling at cross purposes". The fact that the government and the central bank have such different notions of the direction of economic policy could be harmful for the country, he said.

Orbán said he had not spoken to Andras Simor, the governor of the central bank, in two years. He added that given the vast distance between their opinions it was sufficient enough for the national economy minister to talk to Simor.

"It would not help if I talked to him," Mr Orban said, adding however that the central bank president will attend cabinet meetings in future as the newly amended law on central bank requires him to do so.

Orbán said the prime minister should not delegate members to the central bank, as is current practice, but it should be parliament which does the task.

"The central bank's independence should be established in connection with the government, and I guarantee this," he said.

Orbán said joining the eurozone for Hungary is realistic only at the end of the decade.

"I don't want to say any date to which I can be held to later on," he said.

On pension matters, the prime minister said that if state debt makes the country collapse, one of its consequences will be that it will be impossible to pay out pensions.

Our recent measures, without exaggeration, have saved pension payments in the next month, Orbán said.

He added that in the long term pensions hinge on employment and family support.

"We must raise employment levels. We should be the best in Europe," he said, adding that the demographic decline must be turned around.

Orbán said he expected Hungary's credibility to improve considerably in the first quarter of next year when substantive state debt reductions are planned. In a second wave of debt cuts, the time should be ripe for setting up an asset management agency, he said.

"One thing is certain, no one will lose the roof over their head because they could not pay their mortgage," he said.

A moratorium on evictions by lenders introduced by Hungary's previous government last winter is set to end on April 15, 2011. The moratorium has been extended several times before.

Orbán said he continued to have faith in all his ministers and planned no changes in the cabinet.

"The one goal we are focusing on is debt," he said, adding that if this is mishandled it could "bring the country and all of us under".

Orbán said it was difficult to make good the damage caused by the administration over the past eight years in the country's credibility in just six months, but he added that 2011 should be a year which decides the "quality of the next ten years" in Hungary.

On the subject of Hungary's EU presidency starting in January, Orbán said there will be work on modifying the union's fundamental charters, enact important fiscal legislation which would guarantee that the eurozone and the European economy could in the future avert a situation in which it finds itself now.

As regards relations with Russia, Orbán told the television programme that there was still some "ironing out" to do. His recent visit in Moscow did not bring a breakthrough, "though we moved forward," he said. (MTI-ECONEWS)