Election 2014 – Hungary loser of IMF loan repayment, says Bajnai

Budapest, March 26 (MTI) – Hungary lost 14 billion forints (EUR 44.86m) on the early repayment of a loan to the International Monetary Fund (IMF), Gordon Bajnai, leader of the electoral alliance E14-PM, said on today.

Bajnai spoke in response to economic state secretary Gabor Orban saying earlier in the day that the early repayment of the IMF loan had helped Hungary rebuild investor confidence last year.

Bajnai said in a statement that the Hungarian state had exchanged its IMF loan for a more expensive one. He insisted the repayment was similar to taking out a loan under “usurious” conditions in order to repay another one. Hungary lost 14 billion forints on the “propaganda move” of Prime Minister Viktor Orban and central bank governor Gyorgy Matolcsy, he said.

Bajnai added that Hungary has signed a loan to finance the Paks nuclear upgrade which is twice as expensive as the one it had repaid to the IMF. The loan — while sacrificing the country’s financial-economic sovereignty — will have the “added bonus” of electricity costing double of its current price and the economy being sacrificed to Russian power and financial interests for decades, he said.

Gabor Orban said earlier on Wednesday that the IMF had begun to acknowledge the achievements of the Hungarian economy and it was hoped that the European Commission and rating agencies would soon follow suit. Hungary was no longer an “IMF programme country” after it had repaid its loan, but talks were held last week on an annual evaluation of economic status, where the IMF was “constructive”.

The state secretary said dollar bond issues worth 3 billion froints so far would suffice to finance two-thirds of foreign loans this year. The bond issue has temporarily raised the debt-to-GDP ratio by 2.3 percentage points, but the government continues to stand by its goal of debt reduction by the end of the year, he added.

Photo: MTI

Source: http://mtva.hu/hu/hungary-matters