Hungary says IMF talks have no 'preconditions'

(BUDAPEST) - Talks on a credit line between Hungary and the International Monetary Fund and the European Union will be held without "preconditions," a government spokesman told state television on Friday.

"There are no official preconditions of talks, the Hungarian government is ready to launch the negotiations," Andras Giro-Szasz said on public television channel MTV.

He added that neither the changing of three laws against which the EU had launched legal action nor the erasing of Hungary's 16-percent flat income tax, fixed in the constitution, were conditions for the start of talks.

Hungary was forced to approach the IMF and EU for a 15-20-billion-euro ($20-25 billion) credit line in November after the forint dropped to record lows against the euro and borrowing costs spiked.

But in December, the IMF and the EU broke off preliminary talks over a revamp of the central bank which according to the lenders raised questions about the authorities' commitment to central bank independence.

Brussels initiated legal sanctions against Hungary in other two areas affecting the retirement age of judges and the independence of the data protection authority.

Early January IMF chief Christine Lagarde said that before full talks could begin, the IMF "will need to see tangible steps" relevant to macroeconomic stability of the country.

In a country report published on Wednesday, the Washington-based lender criticised Hungary's flat tax introduced by Prime Minister Viktor Orban in January 2011 as a levy having "adverse effects on medium-term growth prospects".

Hungary hopes for the conclusion of the aid deal by the end of March, senior government spokesman Zoltan Kovacs said Thursday.