The government and a delegation from the International Monetary Fund (IMF) have serious differences on the issues of the extraordinary bank levy and a public sector pay cap that would cut the wages of the National Bank of Hungary governor by three-fourths, MTI learnt from government politicians on Saturday.
The government wants to raise about HUF 186bn in revenue from the extraordinary financial sector levy which lenders have said would hurt the economy. The tax was part of a 29-point action plan announced by Prime Minister Viktor Orban early in June.
Another point of the plan caps the monthly wages of all public sector employees at HUF 2m, or ten times the average gross monthly salary for the national economy. The European Central Bank has said the government must consult with the NBH on the pay cap to protect the bank’s autonomy.
The government and the IMF could announce their stands on the issues as early as the weekend, but it is not yet known if they will do so separately or together, the government sources told MTI.
Parliament is scheduled to vote on legislation introducing the extraordinary financial sector levy as well as the public sector pay cap on July 22.
Asked about a report by online news portal index.hu that the government wanted the IMF and EU delegation to allow the general government deficit target for 2010 to be raised to around 4.5pc of GDP from the current target of 3.8pc — a request the delegation turned down, index.hu said — the sources said the government has prepared no plan B, neither an austerity programme or a package of spending cuts.