Bloomberg News

Hungary’s IMF Need May Hinge on Euro Crisis, Jarai Tells TV2

October 12, 2011

Oct. 12 (Bloomberg) -- The outcome of the euro crisis may determine whether Hungary will need to resort to another International Monetary Fund loan, said Zsigmond Jarai, a former central bank president and head of the state Fiscal Council.

“Nothing is unimaginable on this front and it depends on what happens in the world economy,” Jarai told TV2 late yesterday, according to a video posted on the commercial station’s website. “It’s unforeseeable what will happen in the world economy, and only that could push Hungary into a situation where the financing of the state debt becomes uncertain.”

Hungary may be “part of a group of countries” whose economies would be most affected by a potential Greek default, said Jarai, who is an ally and former finance minister of Prime Minister Viktor Orban.

That would be comparable to the 2008 Lehman Brothers Holdings Inc. bankruptcy, Jarai said, referring to the cataclysm that plunged global financial markets into turmoil and forced Hungary to become the first European Union member to obtain an IMF bailout three years ago.

--Editors: Paul Abelsky, Jennifer M. Freedman

To contact the reporter on this story: Zoltan Simon in Budapest at

To contact the editor responsible for this story: Balazs Penz at

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