January 19, 2012

Hungary Promises Compromise With EU Over Bailout

Lenders, regulators pressure leader over controversial law

Prime Minister Viktor Orban of Hungary has promised that he would compromise with lenders and regulators in talks over a bailout for his country. Progress has been stalled because of Orban’s insistence on a central bank law that the institutions said might weaken monetary-policy independence.

Bloomberg reported Thursday that Orban has been attempting to revive bailout talks with the European Union (EU) and the International Monetary Fund (IMF) after discussions broke down in December over his refusal to change the controversial law. The EU also threatened a lawsuit because it said the country had encroached on the central bank’s independence and also interfered politically with the judiciary and the data-protection authority.

Orban was quoted saying Wednesday, “I’m only tough when the interests of my country require me to be and I compromise when the interests of the Hungarian people require me to do so.” He said that if the EU asks, the government will “entirely rework” two temporary provisions of the constitution that took effect Jan. 1.

Orban told European Parliament attorneys that he has written to European Commission (EC) President Jose Barroso that specifies his wish to work out an agreement. At issue is a question of central bank independence, objected to by the EU executive branch. Currently the bank president and members of its rate-setting Monetary Council are being asked to take an oath on the country’s constitution. Orban has said that he would consider the matter.

Orban was quoted saying, “I’ve expressed my opinion that the issues raised by the commission can be solved easily, simply and fast. I hope for swift results from our meeting next week” with Barroso.

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