Business, Finance & Economics

Hungarian government back tracks: a little


Hungarian Foreign Minister Janos Martonyi surrounded by the stars of the EU. The EU is demanding the Hungarian government restore independence to its central bank as a condition of backing its request for bailout funds from the IMF.



Debtors can't be choosers is the lesson for Hungary's extreme right-wing government. The government of Viktor Orban has brought in major constitutional changes in recent weeks The Hungarian opposition say these undermine democracy via rigid gerrymandering of electoral districts and restrictions on freedom of the press among other things.

The IMF, from whom Hungary wants more money, is exercised by constitutional changes that undermine the central bank's independence. So is the EU which must give its bona fides for Hungary to get the loan. No more money until that problem is fixed.

The EU's Olivier Bailly said last week, "Orbán is confident that, in the end, we will pay. We think he will have to change the law if he wants his money."

IMF chief, Christine Lagarde was equally firm, telling CNN on Friday, "We're not complacent. We don't compromise." She added, "But, equally, we never leave the table."

This may explain why the Hungarian Foreign Minister Janos Martinyi told The Guardian today, "Everything is negotiable. We want to start negotiating with the IMF and to come to an agreement as soon as possible."

This may be one of those occasions where the IMF, a bogeyman for democracy campaigners, actually does something to increase democracy in a country.

As for the Hungarian economy, it''s not clear what will happen there. The country's bonds are rated as junk and its currency, the forint, is in the tank.

A full GlobalPost take is here.