Hungary is ready to turn to the European Court of Justice if regulatory disputes with the European Union, which have held up bailout talks, remain unsolved.
Political conditions to starting the negotiations with the International Monetary Fund are “unacceptable,” Prime Minister Viktor Orban said on public radio MR1-Kossuth today. The EU will probably publish its position on Hungary’s answers to legal criticism “within days,” he added.
“If any disagreements remain, if the EU thinks that it still has a dispute with us, then we will weigh our arguments before the European Court,” Orban said.
Hungary turned to the IMF for financial assistance in November and has yet to begin official talks. The EU has blocked the start of negotiations because of a legal dispute over laws affecting the central bank, the judiciary and data protection.
The 27-nation bloc started infringement proceedings against the country and called on Orban to ensure the legal environment for investor confidence to return. The resolution of legal disputes being a condition for the start of negotiations is “unimaginable,” Orban said.
“Hungary is a member of the IMF, it’s our bank, and our request for a precautionary loan being judged on anything else but a purely economic basis would be unimaginable and unacceptable,” Orban said. “Setting any kind of political criteria would simply be blackmail.”
The forint has weakened 0.9 percent against the euro this month, the second-worst performance among more than 20 emerging market currencies behind the South African rand, according to data compiled by Bloomberg. The benchmark BUX index fell 0.8 percent to 17,692.71 by 12:46 p.m. in Budapest, pushing the gauge’s decline this month to 5.1 percent.
Hungary’s dispute with the EU has “flared up again” and the country has taken “big steps backward on the road leading to an agreement,” Budapest-based analysts at Erste Group Bank AG (EBS) wrote in a report today.
The government wants to gradually shift the tax burden from labor to consumption and transactions as it seeks to boost employment, Orban said. A planned levy on financial transactions, which may be introduced from 2013, “can’t really be more than 0.1 percent as we’re talking about an enormous amount of money” Orban said.
To contact the reporter on this story: Edith Balazs in Budapest at email@example.com
To contact the editor responsible for this story: James M. Gomez at firstname.lastname@example.org