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FinMin: Gov’t to submit amendment allowing banking system access to €20 bln support package soon

The government will submit to parliament within two weeks an amendment that will lay down the conditions for Hungary’s financial sector to access a €20 billion credit line from the IMF, EU and World Bank, FinMin János Veres said at a meeting of the National Interest Coordination Council on Friday.


Veres declined to reveal any details about the amendment. The €20 billion credit line ensures the state’s debt repayments next year compared to a €3 billion debt financing requirement, he said. Veres said Hungary’s bank system may be suffering the effects of the financial crisis, but it is not the cause of it -- Hungary’s banking system has no exposure to the subprime mortgage crisis.

The government has no plans to call down money from the credit line, rather it offers insurance against an attack on the forint or the government securities market, Veres said. It also offers support for the private sector, as there is no guarantee there will be sufficient resources to cover the sector’s €27 billion in foreign currency financing requirement, he added.

Information distributed at the OET meeting showed the government lowered its nominal GDP projection for 2009 to Ft 27,690 billion from Ft 28,490 billion. (MTI-Econews)