June 20th, 2012

Varga, Simor send letter to IMF on central bank law amendments

Mihaly Varga, Hungary’s chief negotiator in charge of talks with the IMF/EU for a financial assistance, and Andras Simor, governor of the National Bank of Hungary, are sending a letter to the IMF on Tuesday outlining an agreement on the central bank act.

Varga said on commercial news channel Hir TV late on Monday that a joint letter would be sent to the IMF, the European Commission and the European Central Bank.

Neither Varga’s office or the central bank would reveal any concrete information about the content of the letter when asked by MTI on Tuesday.

Speaking to public radio on Monday, Varga said the amendments the government would submit to parliament this week reflected a “healthy compromise” with the IMF and the ECB.

Once approved, the package will remove the last serious obstacle to Hungary concluding a precautionary loan agreement with the IMF and the EU, said Varga.

He noted that Prime Minister Viktor Orban would send a letter to EC President Jose Manuel Barroso, confirming that no new appointments will be made to either the central bank’s Monetary Council or its management until the mandate of current leaders expires in March 2013.

In another compromise, the amendments will contain a stipulation saying that the Monetary Council’s external members should never exceed the number of internal members by more than twofold.

Should parliament clear the amendments, Hungary will hopefully start negotiations with the IMF/EU in July, Varga said.

The independence of Hungary’s central bank has been a sticking point in preparations for the negotiations on the precautionary financial assistance Hungary is seeking.


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