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Hungary’s Orban Urges EU to Lift Blocks From Aid Talk Start

March 15, 2012

Hungarian Prime Minister Viktor Orban pledged to address the European Union’s concerns on disputed laws and urged the bloc to start bailout negotiations.

“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,” Orban wrote in a letter to European Commission President Jose Manuel Barroso, published by state newswire MTI late yesterday.

Orban’s government, which is seeking to revive bailout talks with the EU and the International Monetary Fund, is embroiled in a dispute with the 27-nation bloc that has blocked the start of negotiations. The EU last week took a formal step toward seeking a court order to make Hungary redraft laws on the judiciary and the data-protection agency and asked for more information on planned changes to a new central-bank law.

Hungary has started redrafting the law on the central bank to address “the majority” of the bloc’s concerns and has sent the draft to the European Central Bank and the Magyar Nemzeti Bank for review, Orban wrote in the letter. The Cabinet will provide relevant EU bodies with requested information concerning salaries at the central bank within the set deadline, it said.

“I’m aware that the Commission has raised other issues, which it marked as preconditions to a financial agreement,” Orban wrote, adding that Hungary will “consider” these issues.

‘Full Confidence’

“This letter, of course, is receiving due attention by the president and should be seen in the context of the ongoing dialog that we are having with Hungary,” Barroso’s spokeswoman Pia Ahrenkilde Hansen told reporters in Brussels today.

The commission has “full confidence” that Hungary will comply with the deadlines set and “hopefully bring matters quickly to settlement in the different areas concerned,” she said.

Bailout talks broke down last year after the government passed a central bank law that the EU said may threaten monetary-policy independence. Orban turned to the IMF in November after the forint weakened to a record against the euro and debt financing costs surged as the country’s credit rating was cut to junk at all three major credit-rating assessors.

The forint, the worst-performing currency in the world in the second half of 2011, has advanced 8 percent against the euro this year after Orban pledged to reach a swift bailout deal.

The government has started working on the amendment of the bill on the data protection agency based on EU recommendations and will send the requested information on the retirement of judges to the EU before the deadline, according to the letter.

Hungary will submit to parliament bills incorporating the opinion of the Venice Commission on March 16, Orban wrote. The changes will probably “give satisfactory answers to the concerns and questions raised” by Commission Vice-President Viviane Reding, Orban wrote.

EU governments partially froze Hungary’s infrastructure- development aid as of 2013 this week, giving the country until June 22 to take “effective” action to cut its budget deficit and have the sanction lifted.

EU finance ministers suspended 495 million euros ($649 million) in development funds and called on Orban to take the “necessary corrective action” to rein in the deficit to unfreeze the grants.

To contact the reporter on this story: Edith Balazs in Budapest at

To contact the editor responsible for this story: James M. Gomez at

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