As Dunaferr has welcomed the Government initiative on commencing negotiations, talks are to begin next week, Minister for National Economy Mihály Varga told Lánchíd Radio at the Tranzit Festival in Kőszeg.

Mihály Varga stressed that “the purchasing price is an open question”, adding, “The Government had mandated me to initiate talks. The letter requesting negotiations had been sent to Dunaferr stakeholders who welcomed the proposal. I wave been informed that they are ready to commence talks next week,” the Minister for National Economy emphasised in the interview which was posted on the website of Lánchíd Radio on Saturday. The Minister has declined to disclose exact financial details for the moment.

Mihály Varga also said he first of all needs precise information on the actual state of affairs at Dunaferr. As he said, the company was privatized in 2004, but “we do not know the conditions of this deal and how many of these have been fulfilled. “We have the conditions on paper, but we must see how many of these requirements have been met by the owners”, he added.

According to Mr. Varga, the Government is seeking information on the measures implemented regarding investment, modernisation and human resource management. He also said that he had received the text of the contract from the Hungarian National Asset Management Ltd, but had not yet had the opportunity to read it. The Minister underlined that lawyers and economists have been asked to help formulate a negotiation strategy on the basis of the contract.

Minister Varga stressed he was intent on holding talks and discussing the problems of Dunaferr, adding that the government also wished to know what had led to the announcement by the company’s management at the beginning of August that they would be cutting the workforce.

Mihály Varga emphasised, “Our ultimate goal is to prevent the layoff of employees and as much as circumstances allow we wish to keep the level of employment at the current level.”

"The Government would fight not only for 150 but for 15 jobs – let alone 1500", he stressed. When such a high number of jobs are at stake, the Government must consider the impact these layoffs would have not only on the factory but on Dunaújváros and the entire region, he pointed out.

Responding to a question about the plight of foreign currency debt holders, the Minister said that the Government has proven over the past years that it is willing to use any instrument to ease the burden on foreign currency debt holders and cut the country’s exposure to foreign currency debt.

The Minister reminded the audience that talks has commenced with the Hungarian Banking Association on the phasing out of foreign currency loans, and especially of foreign currency mortgages. “Our only condition so far has been that forint debt holders must not end up in a worse position than foreign currency debt holders,” the Minister added and said that talks on details with the Hungarian Banking Association are to resume next week.

“Everybody knows that these contracts are faulty. It is also well known that banks have often misused these contracts. The extent of the social problems that foreign currency loans can trigger is now clear – this issue sometimes permits the use of strong words,” the Minister for National Economy said.

Finally, Mihály Varga announced that the Government will have to make a decision on this issue in the autumn even if no agreement can be reached with the Banking Association.

(Ministry for National Economy)