Hungarians lend to their government

As the IMF makes a credit-line agreement conditional on restoring foreign investors’ confidence, a right-wing commentator points out that Hungarians who buy government securities apparently have faith that their country will soon manage to get over the crisis.

“In times of crisis, trust becomes a valuable asset. Hungarians are confident that their country will in the medium term be able to overcome the crisis, and step by step reduce its debt burden,” writes Anna Szabó in Magyar Nemzet.

Like other pro-government commentators (see BudaPost April 16, 2002), Szabó believes that the IMF and the EU are guilty of applying double standards towards Hungary, and put forward political demands as conditions for a credit-line agreement. Szabó notes that the international community seems to be far more lenient with other countries. Georgia last week signed a credit-line agreement with the IMF, although the former Soviet republic still lacks an independent central bank, and part of its territory is occupied by Russian troops.

As for the restoration of investor confidence, another condition of the credit-line talks set by the EU and the IMF, Szabó argues that investors have turned their backs on Europe, which is precisely why the European Central Bank has to step in to buy Italian, Spanish, Irish, Portuguese and Greek government bonds.

Despite the overall mistrust in the markets, Hungarians have confidence in their own government, Szabó remarks. In February, 30 billion Forints worth of government bonds were sold to Hungarian private investors. Szabó believes Hungarians are aware that it is in their best interest to finance their state instead of relying on foreign investors.

Tags: credit, EU, IMF