Hungary's Orban aiming for IMF/EU deal

Mon Feb 13, 2012 9:36am EST
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By Krisztina Than

BUDAPEST (Reuters) - Hungarian Prime Minister Viktor Orban said on Monday he would iron out differences with the European Union and the International Monetary Fund over disputed legislation to secure an aid deal and avoid being shut out of markets.

Orban's government has until Friday to explain how it plans to change its laws on the central bank, the judiciary and a data protection authority that the EU's executive has said threatened the institutions' independence and breached the bloc's rules.

After a string of ratings downgrades to "junk" status and a fall in the forint to record lows in early January, Orban backed down and on Monday reaffirmed his commitment to reach a deal with the IMF/EU and reboot stalled talks on a funding agreement.

"We must fight but we must also do this with common sense and working toward an agreement," Orban told lawmakers in a short speech opening the spring session of parliament.

"We must proceed in this manner in our talks with the EU and the IMF, be it certain issues of central bank regulation, the status of the ombudsman, the law on the judiciary or the financial safety net."

Hungary needs a safety net to rein in borrowing costs and maintain access to market funding as it prepares to roll over nearly 5 billion euros of external debt this year, partly to repay an international loan that saved it from collapse in 2008.

On Monday the forint traded around 290 versus the euro, boosted by the government's pledge to work with the EU, as well as improved market sentiment following parliamentary approval of a Greek austerity package.

Orban also called on parliament, where his ruling centre-right Fidesz party holds a two-thirds majority, to support a new European Union treaty on fiscal union as his government works to mend ties with Brussels after recent legal debates.   Continued...

<p>Hungary's Prime Minister Viktor Orban attends a news conference at the European Council in Brussels after the European Union leaders summit January 30, 2012. REUTERS/Philippe Wojazer</p>