July 20th, 2012

Hungarian-IMF/EU negotiations: News blackout? Not really

A skeleton IMF-EU delegation has already arrived in Budapest, but it is unlikely that we will learn much about their work because no information will be given to the media during the talks. We know because the IMF made it clear on June 12 that negotiations will be about extending a stand-by loan and not the precautionary loan that the Hungarian government hoped to get. The difference between the two is that a precautionary loan comes with no supervision whatsoever whereas in the case of a stand-by loan officials of the IMF check the country’s balance sheet every three months. Last December there were preliminary talks between the Hungarian government and the IMF-EU, but they broke down over this issue. The Hungarian negotiating team refused to accept a stand-by loan while the IMF was not ready to give Budapest anything else. So, that much is clear. If there is money there will be supervision.


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