September 24, 2019 Miriam Lee 0Comment

According to Ana Staft, the government maintains its intention to have a credit agreement, but money from the LAMA is still not needed. Hungary is not seeking credit from the LAMA because it needs money, “we need insurance for what is going on outside of us”, for example, if markets collapse or turbulence in Europe, such an agreement may be needed, minister without a show on Wednesday night in the News TV show.

In response to a question, he also stated that he would refuse the request of the Governor.

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During the day, discussions began between the Hungarian government and the LAMA delegation to review macroeconomic developments over the past six months, as well as to evaluate budgetary developments.
Ana Staft said that during discussions with LAMA representatives, the issue was the Hungarian credit agreement of 2008 with the LAMA and the European Union, when the then government borrowed EUR 20 billion from international organizations. The credit agreement had serious consequences, including cuts in pensions and wages, and measures that affected family support, he added.
He explained that it was included in the agreement at that time that, until the country repays the loan, there is a review process every six months, when the LAMA delegation comes to Hungary and their experts look at the state of the Hungarian economy.

This visit is also part of this review, when the LAMA examines what the year 2012 was like for Hungarian public finances, he added.

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“We are not officially talking about credit negotiations (…), but all the topics we are talking about are all about whether or not we will have a credit agreement now,” the minister without portfolio said.
Ana Staft emphasized: everyone can see that the country is on its feet, Hungarian government securities can be sold, risk premia have fallen significantly, and government bond yields have also fallen. The situation is much more stable than a year ago, but the government remains intent on a credit agreement, he added.
“We are not asking for credit because we need money, we are asking for insurance that happens outside of us if, for example, markets in Europe collapse or turbulence develops that puts the European situation at the top; Ana Staft analyzed the situation. He underlined: Hungary wants an agreement like Poland where the Monetary Fund had an agreement that did not involve a transfer of money, and the Poles asked if they could turn to the Monetary Fund.
Ana Staft pointed out that one of the most recent impact studies of the LAMA shows that the LAMA does not have infallible people, and there is a reason that a government, if it wants to take national aspects into the negotiations, should stand up.

They also acknowledged at the LAMA that they proposed austerity measures that had a poor impact assessment and worsened the economic downturn in each country, he said.
Ana Staft stressed that the situation in the country is better than the situation around the July negotiations, and the LAMA does not dispute that financial stability has been restored. He said that what they still stand for is the perception of growth, how more jobs are needed and what is needed to increase investment. LAMA experts believe that growth requires lending, banks are overtaxed, so the burden on banks must be reduced.
In the current situation, the question is whether the LAMA is willing to accept Hungary’s economic policy model as a basis for negotiation or insists on “changing this economic policy structure,” the minister said.

He believed that fluctuations in the exchange rate of the forint stemmed from the high level of Hungarian government debt and the high level of household indebtedness.

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While Hungarian debt is the highest in the region, there will be speculative attacks aimed at influencing the exchange rate of the forint, he said, adding that the zloty has also weakened in recent days.
Ana Staft considers the weakening of the forint exchange rate dangerous in the current situation of the Hungarian economy. 
He said to one question that he had not been invited to the post of central bank governor, “I consider parliamentary work to be the basis of my work, even if I had received such a request, I would respectfully refuse it.”