Hungary's PM Orban Refuses To Back Down On Extending New Tax To MNB

  • 31 Jul 2012 9:00 AM
Hungary's PM Orban Refuses To Back Down On Extending New Tax To MNB
The government will insist during loan talks with the EU and IMF that the financial transaction tax be applied to the MNB, Prime Minister Viktor Orban told reporters last week. The government and the IMF disagree on this issue, he said, one day after the European Central Bank (ECB) also expressed its opposition, saying the measure may violate EU rules.

Orban, who met with the IMF-EU delegation on Tuesday said the first round of talks had been “encouraging” as regards other issues.

Orban welcomed the ECB’s Tuesday statement as an opportunity to illustrate the difference between European and Hungarian crisis management, saying “the EU defends banks, while we protect jobs”.

The Ft 100 billion expected from levying the financial transaction tax on the MNB is to be part of a Ft 300 billion job protection plan, he explained.

“We think the financial sector – including the Hungarian National Bank – must be capable of raising for the budget the sources necessary for implementing the plan,” he said.

Orban said banks are needed, and profits are particularly needed, but when the entire economy suffers losses, it seems unfair that the financial sector should be exempt from paying taxes.

Reconciling fair taxation and economic sense is a question that is an important element of the negotiations, Orban said.

He said he expects the IMF-EU delegation to present a summary to the government, naming those points on which it believes economic policy should be changed, to state its preconditions and suggest how next year's budget should be amended.

The cabinet will answer such observations substantively when the delegation returns in September.

The delegation also met with six union groups, the Autonomous Unions told Kossuth Radio.

Source: Hungary Around the Clock

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