Orbán, whose government started loan talks with the International Monetary Fund and the EU in July after months of delays (see background), poured cold water on hopes for a fast agreement by saying the IMF had made a raft of demands that he could not agree to.
The prime minister has consistently talked tough about any deal with the IMF for Hungarian voters, but many analysts say he is also playing for time and, should financial markets force him to take IMF financial backing, softer conditions for any aid.
"I look at this [lenders' proposals] as a negotiating position, but I'd like to make it clear that on this basis there will not be a deal, these are such demands ... or proposals from the IMF/EU which Hungary cannot accept," Orbán said in the radio interview.
"So I think we need [an IMF agreement] ... there will be one, we will agree but not on this basis."
Orbán said the government would work out "an alternative" negotiating position and reiterated that Hungary only needed a precautionary financing agreement.
He said he could accept the need for smaller bureaucracy and a low budget deficit, but could not accept a cut in pensions or pensioners' travel allowances, or the scrapping of family benefits. The IMF has not confirmed there was such a list of conditions.
Dissed on Facebook
Orbán said the EU had also prepared a report on the initial round of talks which contained more concrete details than the IMF's own document.
He said differences with lenders centered on the financing of the government's job protection plan, which the IMF and EU said could put a hole in the budget next year.
Before that, the Hungarian prime minister had posted a video on his Facebook page, slamming the EU/IMF proposal, and “unfriended” IMF. Nearly 2,000 people “liked” the video, and 1,110 had commented 11a.m. Friday.
Orbán is pushing a 300 billion forint (€1.04 billion) job-saving plan, partly funded by a new tax on central bank operations, which the European Central Bank has also criticised.
The government has slapped taxes on banks and other industries to deal with its budget problems, and Orban said they have proved more successful than the crippling budget austerity implemented in Western Europe.
"We must go our own way, and apply crisis management tailor-made to the Hungarian economy," he said.
The prime minister also said the ECB's decision on Thursday to launch a new bond-buying programme to help troubled eurozone states could also impact the operations of central banks outside the eurozone.
He said this has brought a "breakthrough" in the so far orthodox thinking in Europe, which has stated that central banks had to focus only on inflation goals, as now the ECB would take part in buying government securities.
"This is a new dimension, so far it has been forbidden to think in this dimension," he said.
"This gives a tool into the hands of governments, and central banks cooperating with governments, which European states did not have in crisis management before."