Roubini sees threat of 2012 collapse in Hungary

"The government’s insistence on its unorthodox policy mix, together with an ill-founded hope that international lenders will eventually drop their provisions, will keep IMF loan talks on the backburner in the near term," Roubini Global Economics sums up Hungary's current situation in its latest research.

The author is of the view that Hungary will have two options next year as it is struggling to renew debt: either accept the requirements of the EU and the IMF, or persist in the concept of economic sovereignty and risk Hungary's solvency in this "policy gamble".

Roubini Global Economics has once again dedicated a substantial research note to Hungary's situation. As emerging markets economist Jelena Vukotic has pointed out in a report entitled "Hungary's Policy Gamble: From Bad to Worse", "the recent breakdown of the preliminary talks on Hungary’s new EU/IMF loan program highlights how the government’s policy gamble seems to be backfiring in the face of the country’s pressing funding needs and eurozone (EZ) market tensions". The report also notes how Prime Minister Viktor Orbán has snubbed European Commission pressures and proceeded with controversial legislation impacting the status of the central bank and financial stability as planned.

(source: portfolio.hu)