After months of speculation Hungary is at last preparing to issue its first sovereign foreign currency bond in nearly two years, setting aside any chance that Budapest will pursue support from the International Monetary Fund any time soon.
The government, it seems, will grab the chance to stuff its coffers before campaigning begins for next year’s election, unfettered by budgetary constraints that might otherwise have been imposed by the European Union or the IMF. Continue reading »
Hungary has seen a flurry of tax and legal changes in the past two years but the indications are “we are past the worst”, Eszter Gyuricsku of Deloitte, the professional services firm, told business people gathered in Budapest on Wednesday.
Unofrtunately for Gyuricsku, speaking at a seminar designed to champion Hungary as a location for shared service offices, barely 500m away Gyorgy Matolcsy, Hungary’s economy minister, was announcing that Hungary would not, after all, halve a special bank tax next year as planned and would, instead, double a financial transaction tax from 0.1 to 0.2 per cent on all bank transactions from January 1. Continue reading »
A “list of horrors”.
That’s how Hungary’s prime minister Viktor Orbán described on Thursday the conditions given by the IMF / EU for a deal, via a video on his Facebook page.
It’s just the latest twist in the long-running credit line saga, and comes one day after Orbán and his right-hand finance man Mihály Varga had talked confidently about reaching a deal “this autumn”. Continue reading »
“If you cannot bring good news, then don’t bring any,” so sings Bob Dylan in his song “Wicked Messenger”: it seems the European Union – International Monetary Fund (EU-IMF) negotiating team take a similar line when it comes to negotiations with Hungary about a new credit facility.
The team left Hungary on Wednesday amid a an ominous storm of silence – no press conference or communique – after a week of preliminary talks with the government and a wide variety of partners, including the central bank. Continue reading »
“Nonsensical and illegal.” That’s how András Simor, governor of Hungary’s central bank (pictured), described last week’s decision to extend a new financial transactions tax to include operations carried out by the central bank itself.
The move is likely to stir similar feelings at the IMF and the EU. Officials only recently agreed to open talks on a support package after Budapest reluctantly rolled back other attacks on the central bank’s independence – and then only temporarily. Will they find it as easy to ignore Budapest’s latest snub? Continue reading »
In Hungarian, to “drag one’s feet” is “nyújtja mint a rétestésztát”, meaning to roll out the dough for top quality strudel, making it very long and thin. A time-consuming process.
If the current Hungarian government of Viktor Orbán ever entered an international strudel-making competition, it would surely win gold, judging by the time it is taking to meet the conditions set by the EU and International Monetary Fund for a new line of credit, needed to reduce borrowing costs and bolster market confidence after Hungary was downgraded to junk status last November. Continue reading »
Valuable EU funds worth €495m will be available to Hungary in 2013, after the European Commission on Wednesday recommended lifting the suspension of the funds as it grudgingly accepted that Budapest had made sufficient efforts to meet budget deficit targets.
But the recommendation acknowledged that Hungary’s efforts were party due to one-off measures – which was part of the reason for suspending the funds in the first place. When it comes to Hungary and the EU, the rules of the game don’t always make sense. Continue reading »
Hopes that the EU would give the green light to opening talks with Hungary and International Monetary Fund have been given something of a thumbs up from the markets.
The forint, stock exchange and CDS all improved on the news. Can the mood be sustained? Continue reading »
It’s too early to say that Hungary is best buddies with the EU, but here’s a start.
Hungary on Monday said it planned new taxes and more cuts in state spending in order to stabilise the economy and meet the deficit targets required to fully access European Union grants. Continue reading »