IMF agreement “automatic” if Hungary meets EU conditions

EU

Hungary will "automatically" meet conditions for a precautionary financial assistance agreement it is seeking from the International Monetary Fund (IMF) and the European Union, if it makes fiscal adjustments requested by the EU by June, Fiscal Council chairman Árpád Kovács said at a forum organized by the American Chamber of Commerce (AmCham) on Wednesday.

Kovács said the road to Washington leads through Brussels.

The EU decided last week to suspend part of Hungary's Cohesion Fund allocation from 2013 if the country fails to take sufficient measures to bring its fiscal deficit under the 3%-of-GDP threshold. EU finance ministers are set to consider lifting the suspension at a meeting in June.

Kovács said the agreement with the IMF was important for investor confidence rather than for economic performance or the financing of Hungary's state debt. He added conditions for financing that debt on the market would be far harder without the agreement.

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