The West

Hungarian PM unfriends IMF
Hungarians watch Mr Orban's Facebook video.

Hungary's Prime Minister has long had a testy relationship with the International Monetary Fund - now he has used Facebook to unfriend the agency and reject its allegedly tough loan conditions.

Prime Minister Viktor Orban said in a video message on his official Facebook page that Hungary could not accept pension cuts, the elimination of a bank tax, fewer public employees and other conditions in exchange for an IMF loan that other officials have said could be about 15 billion euros ($A18.65 billion).

The IMF's list of conditions, Mr Orban said, "contains everything that is not in Hungary's interests".

Mr Orban's announcement took the markets by surprise, in part because just a day earlier he had said loan negotiations with the IMF and the European Union were going according to schedule and both sides were willing to reach an agreement.

The forint, Hungary's currency, initially weakened 1.5 per cent against the euro after Mr Orban's Facebook video, while the benchmark index of the Budapest Stock Exchange fell from more than 18,000 points to below 17,700 before closing at 17,949 points.

Orban said his government would work on an "alternative negotiation proposal" because both he and his Fidesz party agreed that a deal under such IMF demands would be unacceptable.

The IMF did not immediately respond to a request for comment but at the end of loan talks in July, the Washington-based fund outlined some views about Hungary's economy.

The IMF said Mr Orban's government needed to focus on "measures to encourage labour participation, advance competition, reform loss making state-owned enterprises, notably in the area of transport, and put in place a regulatory level playing field for all companies".

Experts said only the European Central Bank's announcement on Thursday of a new bond-buying program meant to ease Europe's debt crisis and ensure the future of the joint euro currency prevented Hungary's currency and stock market from falling more.

The West Australian

Popular videos

Our Picks

Follow Us

More from The West