Hungary on the IMF track now?

It wasn’t long ago at all now that supposedly well-placed observers were warning that Budapest was hunkering down for a long bout of negotiations that they might not even be interested in. The perception was that the Hungarian government thought it either didn’t need more money from the IMF and the EU, or it figured it could do a nationalist/populist pirouette in order to ride out the consequences if the deal fell through.

So what’s changed? The world’s financial markets aren’t generally very forgiving in such matters, so it seems unlikely the world has capitulated. More likely is that Budapest is sending a very different message now. The Wall Street Journal blog says

A senior Hungarian official welcomed that Budapest submitted next year’s draft budget early, saying this allows lawmakers enough time to make necessary changes to ensure the debt-laden country will meet its deficit target for 2013, a pre-requisite to get much needed financial aid from the EU.

“There are unresolved issues in next year’s budget but there’s still time to amend them thanks to the early discussion,” Arpad Kovacs, head of the Fiscal Council, told the Wall Street Journal in an interview Monday. The fiscal council is an independent body, which monitors the country’s fiscal policy with a veto right on the budget.

That’s a very different mood from just a few weeks ago.


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