IMF Has No Date Set for Return Visit to Hungary, Rice Says

The International Monetary Fund has no date set for a return visit to Hungary to continue financial- aid talks, according to Gerry Rice, a spokesman for the Washington-based lender.

The dialogue between the IMF and Hungary “is continuing” after a visit by fund officials in July, Rice told reporters today in Washington.

Hungary requested aid in November as its credit rating was cut to junk. Negotiations for a 15 billion-euro ($19.2 billion) loan were delayed multiple times because of Premier Viktor Orban’s resistance to adhere to legal and economic conditions set by the IMF and the European Union.

The government may complete a deal by the end of this year, chief aid negotiator Mihaly Varga said Sept. 11. Hungary had earlier forecast an agreement by October. Talks may resume after the IMF’s annual meeting in October, rather than this month, Varga said.

Orban on Sept. 6 rejected cutting pensions and scrapping an extraordinary bank tax along with other measures to narrow the budget deficit and boost economic growth, which he said were the IMF’s conditions. The lender said the next day that the list contained “significant inaccuracies.” The Cabinet is working on alternate policy proposals.

Hungary needs to move away from “ad hoc” taxes to close budget holes and should create a more “business friendly” environment to boost growth and make budget financing sustainable, the IMF said in a July 26 statement after holding what it called a week of “constructive” talks in Budapest.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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