EU green light for aid talks a 'major milestone': Hungary

(BUDAPEST) - Hungary's go-ahead from the European Union on Wednesday for talks on financial assistance is a "major milestone," Budapest's chief negotiator with the EU said.

"We have reached a breakthrough at the meeting between Prime Minister Viktor Orban and European Commission President Jose Manuel Barroso," he said, adding: "We have reached a major milestone."

The talks will follow consultations with the International Monetary Fund, the European Commission, the European Central Bank, the Hungarian central bank (MNB) and the Hungarian government, Fellegi said.

"Taking into account the difficult economic circumstances, the talks will last longer than the usual few weeks," he added.

In November, Hungary approached the EU and the IMF about a possible 15-20 billion euro ($20-26 billion) stand-by credit line after the forint plunged and Hungary's borrowing costs soared.

But talks snagged on EU objections to a raft of legislation passed by Prime Minister Viktor Orban's centre-right government that critics said increased state control over the judiciary, the media and the central bank.

The European Commission said Wednesday that Hungary had "taken sufficient action and commitments to enter into negotiations."

The MNB, whose independence was an issue of contention between the government and the EU, also "welcomed" the start of discussions.

"The MNB takes into account that the government guaranteed to the Commission that it would ensure the independence of the central bank," it said.

According to experts, an IMF delegation could arrive in Budapest in two weeks.

Despite the progress on the central bank, the European Commission will still take Budapest to the European Court of Justice over a data protection law and legislation on the retirement age of judges, spokesman Olivier Bailly said earlier Wednesday.