Hungary's Leader Seeks to Fast-Track Pact Talks

„The policies, aimed at reaching strict budget-deficit targets, cutting a large public debt and turning around slowing economic growth, included nationalizing some pension funds; imposing extraordinary taxes on the financial, retail, telecommunications and energy sectors, including foreign corporations; and allowing the repayment of foreign currency-based household mortgage loans at discount exchange rates. Even now, Mr. Orban's government has said it would seek a deal with the IMF on an insurance contract to reassure investors, and not a loan deal. It wants Hungary to continue to finance itself from the markets and not to become reliant on »generosity«.

Heavily indebted Hungary had to be bailed out by the IMF and the European Union when it was unable to borrow money in capital markets after the start of the global financial crisis in late 2008. To secure the rescue package, Hungary agreed to slash state spending. The government raised the retirement age, cut pensions and froze wages of civil servants, and pared various state-subsidy programs. But after the election in 2010 of populist Mr. Orban, who pledged during the campaign to cut taxes and end austerity measures, relations with the IMF and EU soured and talks on extending the loan agreement were abandoned.”