Minister Varga said that Hungary's official talks with the European Union and the International Monetary Fund on a loan agreement had stalled but coordination talks focusing on how to kick-start growth were still under way. IMF experts recognise the Government's efforts to reduce the deficit, he said.

The IMF argues that the burdens on the financial sector should be eased so as to restart investment and growth, he added. The Government, however, insists that its efforts in this regard are limited by the EU's expectations to meet the budget deficit target, Minister Varga said, adding that the missing revenues can only be offset by spending cuts. This is a less viable road since swinging cuts could undermine social cohesion and peace, he stated.

(MTI)