Hungary Disagrees With EU Concerns on Judges, Giro-Szasz Says - BusinessWeek

Thursday, January 19, 2012

Jan. 19 (Bloomberg) -- Hungary disagrees with the European Commission on the lowering of the mandatory retirement age for judges, over which the European Union has threatened a lawsuit, government spokesman Andras Giro-Szasz said.

The commission is “fundamentally wrong” to consider the lowering of the retirement age for judges to 62 years from 70 years as “early retirement” as 62 years is now the general retirement age, Giro-Szasz told M1 state television today.

“Hungary will negotiate and if there is no agreement in the end, then the case goes to the European court,” Giro-Szasz said. “Obviously, if the Hungarian government presents its reasons next to the European Commission’s reasons, then the two sides will accept each others’ reasons.”

Prime Minister Viktor Orban told European Parliament members in Strasbourg, France yesterday that he is ready to compromise on disputed laws as he seeks to revive bailout talks with the EU and the International Monetary Fund.

The EU and the IMF suspended the talks last month after Orban refused to compromise on a central bank legislation the EU and IMF said may undermine monetary policy independence. The European Commission has also cited concerns about the overhaul of the data-protection authority.

--Editors: Balazs Penz, Alan Crosby

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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Forint Advances Second Day as Bonds Rise on Hungary Aid Prospect - BusinessWeek

Wednesday, January 18, 2012

Jan. 18 (Bloomberg) -- The forint gained for a second day and Hungarian bonds rallied on speculation the government will accept conditions imposed by the European Union and the International Monetary Fund in return for a bailout.

Hungary’s currency appreciated as much as 1.5 percent and traded 0.9 percent higher at 306.5 per euro by 10:04 a.m. in Budapest. A close at that level would be the strongest since Dec. 27. The government’s benchmark 10-year bonds rallied for the first time in four days, cutting the yield 13 basis points, or 0.13 percentage point, to 9.651 percent.

The European Union yesterday threatened a lawsuit against Hungary for encroaching on the central bank’s independence, pressing Prime Minister Viktor Orban to resolve a dispute that halted talks on international aid for the country. Hungary is ready to comply with demands from the European Union over the central bank, Bild reported, citing an interview with Orban.

“The prime minister told the foreign press that all will be fine with the legislation which had been criticised, and that caused the rally,” Miklos Kolba, the Budapest-based head of foreign currency trading at ING Groep NV, said in comments sent by e-mail.

Orban is scheduled to speak at the European Parliament today. He has asked to speak to defend the country against “lies and groundless accusations,” his spokesman, Peter Szijjarto, said in a statement on Jan. 16.

“We will bow to power, not to the arguments,” Orban told Bild in the interview.

Legal Action

The EU commission’s concerns about Hungary’s central-bank independence stem partly from the country’s Magyar Nemzeti Bank law, which includes provisions that allow ministerial participation in meetings of the monetary council, requires agendas to be sent to the government in advance and oblige council members to take an oath of fidelity to the nation. The commission also expressed doubts about Hungary’s rules for dismissing the president of the central bank and monetary council members.

The EU also threatened legal action over measures which may curb the independence of Hungary’s judiciary and data protection authority.

“The process is simple: either the prime minister accepts that changes are required and the market can breathe a sigh of relief or the premier tries to negotiate,” Benoit Anne and Guillaume Salomon, London-based emerging-market strategists at Societe Generale SA, wrote in a research report today. “The latter would be very bad news.”

--Editors: Linda Shen, Balazs Penz

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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