Hungary to strike loan deal

(Vatican Radio) Hungary believes it will soon sign an IMF-led deal on billions of dollars in financial assistance to help the nation overcome its deepest economic crisis in years.


The announcement was made by the country's Deputy Prime Minister Tibor Navracsics in an exclusive interview with Vatican Radio.


Despite mounting tensions with the IMF, Navracsics expects an accord on an IMF-led loan of some 20 billion dollars. Speaking in Budapest, he pledged his nation would strike a deal within months.


"We want to have an agreement with the IMF. So probably it will be at the end of this year or . . . early next year," he explained. "But I hope there will be an agreement."


His comments are remarkable as Hungarian Prime Minister Viktor Orbán recently said that Hungary could not accept alleged conditions for the loan, including pension cuts and the elimination of a bank tax and other taxes targeting mainly foreign companies.


CREATIVE ALTERNATIVES

Hungary's centre-right government is also still looking into creative alternatives to shore up its budget, in case there's still no IMF deal.

The latest proposals include one to borrow at least $272 million from Hungarian citizens by selling them euro-denominated bonds.


Another would grant residency, or even Hungarian passports, to foreigners willing to buy 250,000 euros of Hungarian government bonds, confirmed Navrascisc.

"We have to finance our budget, so we are looking to these financial incentives as well," he added.

The top government official laughed when asked whether this would lead to an influx of non-European Union citizens into strategically located Hungary. "No I don't think so."

AMERICAN ELECTIONS

Navracsics spoke on the sidelines of what was dubbed Europe's largest indoor American election, with some 1,500 guests attending the event in a luxurious Budapest hotel.


He hopes re-elected U.S. President Barack Obama will focus more on Central and Eastern Europe than during his previous term.


"Economic relations and upgrading the strategic positions of Central Europe," are important at a time of growing Russian influence, Navracsics argued.

"I think the Central European nations now somehow vanished in the eyes of the American foreign policy," he complained.

"The American foreign policy think tanks and analysts think that Central Europe is in a safe and dry place and it's not in danger of a possible Russian influence. We sometimes think differently."


Navracsics concern seems understandable: Hungary and other ex-Soviet-satellite states were occupied for decades by Russian forces till the collapse of Communism over 20 years ago.


Listen to Stefan Bos' report: