January 20, 2012 - 17:52 AMT
Hurgary faces “confidence problem” in markets

Tamas Fellegi, Hungary’s chief negotiator for a financial bailout, said the government must resolve a dispute with the European Union over the central bank’s independence that has halted aid talks because the country faces a “confidence problem” in the markets, Bloomberg reported.

“It is very clearly in the interest of both the European Union and Hungary to have these negotiations started as quickly as possible,” Fellegi told reporters today in Brussels after meeting EU Economic and Monetary Affairs Commissioner Olli Rehn. “The exact form and size of the package should be part of the negotiations.”

Fellegi expressed optimism about resolving the disagreement, which also involves the International Monetary Fund. “We don’t see problems that cannot be solved quickly,” he said. “Clearly there is a light at the end of the tunnel.”

A planned Jan 24 meeting between Hungarian Prime Minister Viktor Orban and European Commission President Jose Barroso will be an “excellent opportunity” to settle matters, Fellegi said.

The commission, the 27-nation EU’s regulatory arm, earlier this week threatened a lawsuit against Hungary for encroaching on the central bank’s independence.

“I see the chance that all those issues can be clarified and settled politically during the meeting” between Orban and Barroso, Fellegi said.

He refused to speculate about the size of any international aid package, which he said should be “precautionary” and would include conditions.

“It’s a delicate issue,” he said. “It has to satisfy the needs. It has to satisfy the markets’ expectations. And it cannot be bigger than necessary.”