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PM acknowledges public sector bonus compensation discussed with IMF head

Prime Minister Ferenc Gyurcsány acknowledged a government decision to compensate public sector workers for suspending their annual bonuses in 2009 was discussed with International Monetary Fund managing director Dominique Strauss-Kahn during his visit to Budapest in January, but the prime minister insisted that the government had made the right decision.

Asked in a radio interview whether the IMF had reproved the decision to compensate the workers, Gyurcsány did not issue a denial, but said only that the decision was discussed with Strauss-Kahn in Budapest.

The IMF granted Hungary a €12.5 billion standby loan in November.

The government decided to suspend annual bonuses in 2009 for public sector workers as part of government austerity measures. But when unions threatened to strike, the government agreed to provide compensation equivalent to an entire month's wages to workers earning up to HUF 180,000 per month, and a fixed HUF 180,000 of compensation for employees earning more. (Public sector annual bonuses in Hungary are usually equivalent to a full month's pay.) The agreement was reached just a few days after Parliament approved the 2009 budget, and is to be financed from budget reserves. (MTI – Econews)