Orbán begs for EU, IMF help

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Hungarian Prime Minister Viktor Orbán took a conciliatory tone with the Commission in an effort to obtain "precautionary" financing, just a week after he called "extremely stupid" a move by the EU executive to freeze regional funding as a sanction for his country's budget deficit.

In a letter to Commission President José Manuel Barroso, Orbán pledged to address the Commission's concerns on issues seen by Brussels as a pre-condition for the 'precautionary aid' which Budapest seeks from the EU and the International Monetary Fund (IMF) as insurance against possible financing difficulties.

Last week, the Commission opened the second stage of two infringement procedures against Hungary for government interference in the judiciary and in the data protection authority. The next step could be a referral to the European Court of Justice.

"I hereby ask your cooperation in taking the measures necessary to start negotiations on a precautionary financial agreement with Hungary so as to avoid unnecessary delays," Orbán wrote, according to a copy of the letter, obtained by the Hungarian news agency MTI.

The conciliatory tone contrasts with recent statements, on which the Commission declined to comment at the time when they were issued.

Orbán reportedly told a business conference on 8 March that the Commission’s proposal to freeze funding in 2013 for Hungary’s poorer regions was an "extremely stupid policy" and "bad management."

Asked to comment Orbán's letter, Commission spokesperson Pia Ahrenkilde Hansen said yesterday (15 March) that it would receive "due attention" of Barroso, and that it would be seen in the context of the ongoing infringement procedures. Hungary has to respond to two "reasoned opinions" and two "administrative letters" by the Commission before a 7 April deadline.

Hansen said the Commission was hopeful that Hungary would reply in time and "bring matters to settlement in the areas concerned".  

Foundering florint

Hungary needs to reach an agreement with the IMF and the European Union on financial aid as such a deal is “a necessary first step” to stabilise the forint and restore market confidence, an executive at the Organization for Economic Cooperation and Development said, quoted by the Bloomberg news agency.

The Hungarian forint was the worst-performing currency in the world in the second half of 2011 and has lost 8% of its value against the euro this year.

In the meantime, Orbán's  Fidesz government suffered another setback when a Hungarian court overruled a decision by the country’s media authority to award the frequency of opposition radio station Klubradio to another company.

According to critics, the Fidesz government attempted to silence the popular Klubradio by awarding its frequencies to an unknown player. 

Hungarians voted overwhelmingly in April 2010 for a radical change in leadership, sending the ruling Socialists into opposition and giving the centre-right a qualified majority in parliament.

The election marked the biggest victory for any political party in a general election since the fall of communism 21 years earlier. However, several measures put in place by the new government have since fuelled controversy.

A controversial new constitution that entered into force on 1 January brought tens of thousands of protestors. They believe it undermines the independence of the central bank, the judiciary and the news media. Critics also say that the new measures represent an assault on religious freedom by cutting down the number of recognised religious groups from 300 to 14.

Under its EU accession treaty, Hungary is obliged to adopt the euro as soon as it is ready. However, the new constitution makes the national currency, the forint, the country's only legal tender.

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