The new leadership of the Ministry for National Economy considers stability, predictability and increasing confidence the cornerstones of its policy. Economy Minister Mihály Varga does not believe it necessary to introduce new measures for addressing the plight of forex debtors, but he intends to extend and fine-tune those already in place.

Speaking about foreign currency-denominated loans at the press conference organized for his inauguration, the new Minister for National Economy said that earlier the same day he already held negotiations with representatives of the Hungarian Banking Association. On that occasion, he reiterated that the Ministry prepares only proposals about which the Association can also express their views. Responding to a question, he added that he is not yet aware of the Financial Commissioner’s standpoint on this issue, but would consult on the subject with György Doubravszky.

With regard to staff changes in the Ministry’s management, Mihály Varga said that he had nominated Senior Advisor at the National Tax and Customs Administration Judit Gondos as Minister of State and Balázs Rákossy, as Head of the Minister of State Cabinet.

The mandates of three out of the seven Ministers of State at the Ministry for National Economy were terminated and Minister Varga said that he hopes to settle unresolved staff issues as early as this week. He informed the press that at the Ministry’s General Staff Meeting, Prime Minister Viktor Orbán mentioned among his expectations that the Ministry for National Economy will continue to operate in an unmodified structure in order to achieve the objectives outlined in the 2010 Government agenda.

The Ministry’s leadership regards stability, predictability and increasing confidence as the central issues of its work, which aspects need to be represented in the spirit of openness, dialogue and cooperation for three target groups: economic stakeholders, foreign investors and the wider public, he said.

In the opinion of Mihály Varga, the professional performance of the Ministry must be strengthened, which means that more precise projections will achieve ministerial proposals of a professional quality that can be relied on by all.

The key priority of the Ministry, according to the Minister, is to reignite economic growth. As he said, it was a “great joy to see” that Hungarian economic stakeholders are characterized by cautious optimism nowadays, which is a good starting point for talks on the future with company directors.

It will been crucial for boosting growth that banks which operate in Hungary act as partners and increase lending in order to stimulate investments. He stressed, “I am not saying that the banking system is the only tool for reinvigorating the Hungarian economy, but it certainly is one of the key tools.” He also added that negotiations with credit institutions launched in February by the former ministerial leadership will continue.

Increasing the current corporate loan portfolio of HUF 7000bn by 1% would add 0.5% to GDP, he said.

When asked about cooperation with the central bank, his response was that the Ministry has been planning a strategic partnership based on “common objectives”. As he said, it is a great advantage that National Bank President György Matolcsy was a member of the Government in recent years and is aware of the Government’s economic policy goals.

Concerning the Excessive Deficit Procedure against Hungary, Mihály Varga reiterated his former position that he does not believe it necessary, for the time being, to amend the state budget.

(Ministry for National Economy)