Hungary repays IMF loans but EU suspends finance to the state

Tim Wallace
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HUNGARY yesterday paid back its emergency loans from the International Monetary Fund (IMF) well in advance of a 2014 deadline.

The government believes it is now in a sufficiently strong position to finance itself from tax revenues and the bond markets.

But the country has also had its funding for development programmes cut off by the EU in the wake of rows over the tendering of contracts.

The country’s economy ministry announced the repayment of the final installment in three different currencies, consisting of £255m, $1.7bn (£1.1bn) and €570m (£490m).

The early repayment of the €20bn loan granted in 2008 will save 3.5bn forints (£10.1m) in interest, it said.

However, the government also said 12 of the 15 programmes being financed by the EU may have their funding cut.

That amounts to up to 600m forints this year. It follows a series of spats between the authorities, on issues from the use of solely Hungarian engineers on road projects to the independence of the central bank.