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July 23 (Reuters) – The Singapore dollar is ‘somewhat weaker” than its medium-term equilibrium level but it is likely to appreciate as the domestic economy expands, the International Monetary Fund said on Friday.
In its annual review of Singapore’s economy, the IMF said the modest and gradual rise of the Singapore dollar SGD= “appears consistent with internal and external stability”.
July 19 (Reuters) – Hungary’s blue chip stock index opened 4.3 percent lower on Monday after talks between the centre-right government and international lenders were suspended without agreement at the weekend.
Shares in the country’s biggest bank, OTP (OTPB.BU), were down 8.5 percent at 4,705 forints in early trade. (Reporting by Gergely Szakacs, editing by Will Waterman)
July 19 (Reuters) – Hungarian government bond yields jumped by 20-25 basis points across the curve in illiquid trade at the open on Monday after government talks with international lenders ended inconclusively at the weekend.
Dealers said yields could rise further still and prevailing uncertainty in the absence of an agreement with the International Monetary Fund and the European Union would continue to weigh on the market. [ID:nLDE66G0AP]
(Reporting by Krisztina Than and Gergely Szakacs; editing by John Stonestreet)
July 19 (Reuters) – Hungary’s forint EURHUF=D2 was down about 2.4 percent on Monday morning at 288.80 to the euro after talks between the centre-right government and international lenders were suspended at the weekend.
At 0543 GMT, the forint traded at 289 versus the euro, levels last seen in early June. [ID:nLDE66G0AP]
(Reporting by Krisztina Than)
(Reuters) – The International Monetary Fund and the European Union have suspended a review of Hungary’s 20 billion euro ($26 billion) financing agreement, but left the door open for more talks with the new center-right Fidesz government.
The decision means Hungary, which uses the package as a safety net, will not have immediate access to undrawn funds of 5.5 billion euros from the financing deal slated to expire in October.
Here are some questions and answers on what lies ahead:
WILL THERE BE A MARKET BACKLASH?
The forint, central Europe’s second-worst performing currency behind the Serbian dinar this year, is bound to weaken, probably in excess of 1 percent, and government bond yields will rise when local markets reopen on Monday.
That will increase Hungary’s borrowing costs and heightened market volatility may also force the central bank, which will discuss interest rates at a regular rate meeting on Monday, into adopting a more hawkish line.
The bank kept interest rates at a record low of 5.25 percent at the past two meetings after 10 months of easing worth 425 basis points. All 25 analysts in a Reuters poll on Thursday expected the bank to hold fire again.
But some analysts said that after Saturday’s unexpected suspension of talks with lenders, the bank may consider a rate hike if markets plunge on Monday.
Falls in the forint will also put pressure on Hungarian households holding trillions of forints worth of foreign currency mortgages, primarily in the volatile Swiss franc, which hit record highs versus the forint in July.
With scarce details on the government’s plans for reforms and no clarity on its 2011 budget plans, a sustained period of uncertainty would have a negative impact on Hungarian markets.
WILL THERE BE AN AGREEMENT WITH LENDERS?
Analysts said despite the talks falling through this week, the government should eventually come to an agreement with the IMF and the European Union, but a deal may not materialize until local government elections due on October 3.
That will give more time for Fidesz to formulate plans on the 2011 budget and on how it wants to transform loss-making state transportation companies into viable businesses able to remain afloat without constant state support.
Analysts said the lack of agreement may also have been a tactical move by the government to postpone the announcement of painful budget cuts needed to cut the deficit below the EU’s 3 percent ceiling next year until after the October poll.
Hungary’s government must also seal a review of the current deal if, as announced earlier, it wants to secure a two-year precautionary agreement worth 10-20 billion euros to serve as a safety net in 2011-12.
DOES HUNGARY NEED IMF MONEY RIGHT NOW?
Hungary has been able to finance itself from the markets since last year and has all of its foreign issuance plans for this year already covered.
Earlier this week debt agency AKK sold all bonds on offer at an auction and raised its 10-year offer by 5 billion forints, with yields dropping about 25-30 basis points across the curve from the previous tenders two weeks earlier.
So far the state has drawn about 12.8 billion euros of the 20 billion available in the IMF/EU package and analysts have said it could safely finance this year’s budget deficit with the help of its available unspent IMF and EU funds worth about 3.5 billion euros. On top of this the central bank has called down 1.4 billion euros from the package and put it in its reserves.
CAN HUNGARY AFFORD TO ESCHEW AN IMF DEAL BEYOND 2010?
The government itself has said it would use a new agreement with the IMF and the EU as a safety net, and not rely on it to cover its funding needs for the next two years.
Analysts said not having a new agreement with international lenders after the current one expires in October would be risky as the deal would be an important credibility anchor but Hungary could still be able to finance itself from the markets.
In a worst case scenario, however, the lack of an agreement with lenders now may trigger a negative market reaction which would leave the government with no choice but to seek the IMF’s good graces again.
(Editing by David Holmes)
(For more stories on the Japanese economy, click [ID:nECONJP])
TOKYO July 14 (Reuters) – The International Monetary Fund will propose to Japan’s government that it raise taxes soon to help lower its bulging public debt, the Asahi newspaper reported on Wednesday.
The proposal could come as early as this week, the Asahi reported, citing sources with ties to the IMF. The non-binding recommendation would be part of the IMF’s annual economic assessment of the individual countries that make up the fund, the Asahi said. (Reporting by Stanley White)
July 9 (Reuters) – Any changes to the makeup of China’s massive pile of foreign exchange reserves will have to be gradual so as not to cause volatility in world markets, the International Monetary Fund’s chief economist said.
Shifts in the composition of the Chinese central bank’s more than $2 trillion portfolio would have to be “very, very slow”, Olivier Blanchard, the IMF’s economic counsellor and director of research, said at an Asia Society event in Hong Kong on Friday.
China bought a record $7.9 billion in short-term Japanese debt in May, a surge that some analysts said was a sign of foreign reserves diversification into the yen and away from the euro and the dollar. [ID:nTOE66705G] (Reporting by James Pomfret, writing by Kevin Plumberg; Editing by Chris Lewis)
June 25 (Reuters) – European countries are moving towards a joint ban of naked short-selling, Germany’s Finance Minister was quoted on Friday as saying.
Germany surprised its European Union partners last month by announcing a unilateral ban on the speculative trades in top financial stocks, euro zone government bonds and related credit default swaps (CDS).
“I am confident of a ban on naked short-selling (on the EU level),” Wolfgang Schaeuble told German daily Boersen-Zeitung.
“And in financial sector taxation, we are also making progress.” (Reporting by Sakari Suoninen and Jonathan Gould; editing by Patrick Graham)
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* UPDATE 2-IMF sees slow Irish recovery, risk to fiscal reformsJun 24, 2010
June 17 (Reuters) – Hungary’s new government will start negotiations in July with the International Monetary Fund and EU about a new loan agreement, a chief aide to the prime minister told television M1 on Thursday.
Hungary secured a $25.1 billion financing deal with the IMF, the European Union and the World Bank in October 2008 to avert a meltdown amid a market crisis. The agreement will expire in October.
When asked if there would be a new agreement with lenders, Gyprgy Szapary, chief aide to Prime Minister Viktor Orban, said:
“I hope there will be (an agreement)…The delegations (of IMF and EU) will come here in early July; we will sit down to negotiate then so that there can be a new agreement.”
“We are thinking about possibly extending (the current aid deal) until December so that there is no break in the programme, because we think that potentially we could get another agreement for 2011,” Szapary added.
He said Hungary did not plan to draw down the currently available tranches of the existing loan for now, but said the funds may have to be used if the global sentiment turns unfavourable.
“For the time being the decision is that we will not drawn down the remaining amount…but there may be a scenario later under which these funds need to be used as something may happen in the global economy which could force Hungary to draw down the remaining part of the loan,” Szapary said.
The state has so far drawn about 12.8 billion euros from the credit facility secured in 2008, but some of these funds have not been spent. The central bank has called down 1.4 billion euros from the package, placing it in its reserves.
Hungary still has access to a further financing of about 5 billion euros from the original facility, pending agreement with lenders at the next loan programme review.
The country has not drawn fresh funds from the IMF/EU this year as last year it successfully returned to market financing after the previous Socialist government stabilised finances with spending cuts and regained investors’ confidence.
Hungary, which has a new centre-right government since April elections, had a budget deficit of 4 percent of gross domestic product last year and targets a 3.8 percent deficit in 2010.
The country’s public debt at around 80 percent of GDP is still the highest in central Europe.
Earlier this month, highly confusing comments from some Hungarian government officials drawing comparisons between Hungary and debt-laden Greece triggered a selloff in the forint currency EURHUF=D2 and global financial markets.
The government announced a quick set of measures and pledged to meet the deficit target which has calmed markets, but analysts warned that implementation risks remain, especially linked to a planned big new tariff on the financial sector.
For analysis on Hungary’s govt pls see [ID:nLDE65F1SB]
For a factbox on Hungary’s debts [ID:nLDE65509Z]
For analysis on Hungary economy [ID:nLDE65924H]
(Reporting by Marton Dunai; Editing by Kim Coghill)
June 17 (Reuters) – Hungary’s new government will start negotiations in July with the International Monetary Fund and EU about a new loan agreement, a chief aide to the prime minister said on Thursday.
Currencies | Bonds | Global Markets
“I hope there will be (an agreement)…The delegations (of IMF and EU) will come here in early July; we will sit down to negotiate then so that there can be a new agreement,” Gyorgy Szapary, chief aide to Prime Minister Viktor Orban, told television m1.
“We are thinking about possibly extending (the current aid deal) until December so that there is no break in the programme, because we think that potentially we could get another agreement for 2011,” Szapary said.
He added that Hungary did not plan to draw down the currently available tranches of its existing loan for now, but said the funds may have to be used if the global sentiment turns unfavourable.
(Reporting by Marton Dunai; Editing by Kim Coghill)
TOKYO, June 17 (Reuters) – The euro slipped from its two-week highs versus the dollar on Thursday as its short-covering rally ran out of steam and as worries about Spain’s public finances and banking system stopped it overcoming key resistance.
After failing to break above $1.2350-55 twice in the past 48 hours, the euro EUR= is at risk of retreat to around $1.2175, a 38.2 percent retracement of its rebound from a four-year low below $1.19 set last week.
Traders said the rally now looked tired and the euro was likely to see selling into rallies as tolerance for risk subsided on a revival in concerns about euro zone fiscal problems.
“Some people want to reduce risk positions on worries about Spain,” said Daisuke Karakama, market economist at Mizuho Corporate Bank.
But the euro’s fall has not been as sharp as in May when worries about the impact of Europe’s fiscal problems drove it down rapidly, and this indicated that although some shorts have been covered, the market is still short euro longer term, Karakama said.
“The euro would have been sold much more hysterically if it were a month ago,” he said.
It slipped 0.3 percent from late U.S. levels to $1.2270. It is more than half a percent below the two-week high of $1.2354 hit on Wednesday but still up about 3 percent from the four-year low of $1.1876.
The market will be watching a Spanish bond auction later in the day after the spread of Spanish government bond yields over benchmark Bunds soared to a euro lifetime high on Wednesday. [ID:nLDE65F23Y]
“In the past few sessions, rises in the credit spreads of euro zone countries have not led to euro selling as much as before. But unless conditions in Europe improve, correlation (between the euro and European bond spreads) will return,” said Junya Tanase, senior strategist at JPMorgan Chase Bank.
The European Union holds a summit on Thursday to discuss ways to strengthen budget discipline and economic policy coordination.
The EU and IMF on Wednesday denied a report they and the U.S. Treasury were drawing up a safety net for Spain. But worries about Spanish banks put pressure on yields and the market will be looking for the result of bank stress tests which the Spanish central bank said would be published soon. [ID:nLDE65F1X2] [ID:nLDE65F1AL]
The euro also fell against sterling, the yen and the Swiss franc. It shed 0.7 percent to 112.00 yen EURJPY=R as Japanese banks sold. That helped push the dollar down 0.5 percent to 91.30 yen JPY=.
The dollar index .DXY =USD was up 0.3 percent at 86.32, well above support near 85.85 which is the index’s May 28 low.
The Australian dollar AUD=D4 eased from one-month highs of $0.8674. It was trading at $0.8596, down 0.3 percent, with some players looking to sell into rallies after it failed to hold gains above $0.8650.
The dollar was marginally higher against the Swiss franc CHF= at 1.1303 francs ahead of a Swiss National Bank meeting.
The SNB is expected to keep interest rates low but may announce measures to drain excess money from the economy after flooding the market with francs since 2009 to keep the currency from appreciating too rapidly. [ID:nLDE65E2DB] (Additional reporting by Reuters FX analyst Krishna Kumar in Sydney; Editing by Joseph Radford)
June 16 (Reuters) – It is in China’s interest to revalue its currency, and from the point of view of the rest of the world, it should happen as soon as possible, the International Monetary Fund’s top economist was quoted as saying.
Bonds | Global Markets
“Some sectors in China are overheating and workers are demanding more pay. They (authorities) don’t want the inflation risk to grow,” IMF Chief Economist Olivier Blanchard said in Finnish business paper Kauppalehti on Wednesday.
“I don’t know when and by how much the yuan will be revalued, but I believe it is in their (China’s) interests. For the rest of the world it is important that it happens as soon as possible,” he said.
Blanchard also said it was clear the global economy was on a growth path.
“The real economy is recovering, of that there is no doubt. If anything the recovery has been stronger than we have forecast,” he said.
(Reporting by Brett Young; Editing by Neil Fullick)
Romanian trade unions plan to stage a one-day general strike in the public sector in early June to protest against government plans to cut wages and pensions to comply with a 20 billion euro IMF-led aid deal.
“We aim to gather around 1 million people in a general strike across Romania the day parliament will discuss the IMF- backed measures,” Marius Petcu, head of one of the country’s largest unions CNSLR Fratia, told Reuters.
Romania’s biggest trade unions decided on Wednesday to back an indefinite pay strike by around 350,000 teachers on May 31, followed by warning strikes by transport workers, railwayman, civil clerks and nurses in subsequent days.
The country’s public sector employs 1.3 million workers, a third of all jobs. Its payroll swallows 9 percent of GDP and analysts say the cost is twice as high as it should be.
(Reporting by Radu Marinas; Editing by Charles Dick)
The European Union sent Greece a letter to remind it to stick to the terms of a 110-billion euro ($134.6 billion) bail-out deal, officials said ahead of talks this week on Athens’ pension reform plans.
The comments came after Greece’s Labour Minister said on Monday that the EU and IMF were asking the debt-choked country to stiffen its draft pension reform, which is required by a multi-billion euro “aid for pain” deal agreed this month.
A European Commission spokesman dismissed suggestions the letter related to any shortcomings in Athens’ adherence to the plan, but said the EU executive had to closely monitor Greece’s implementation of the aid programme.
“We at the European Commission are obliged to keep a close eye on all the various elements involved in applying the memorandum,” Amadeu Altafaj said.
“This is a normal exchange between the Greek authorities and the Commission services on a draft law which has to follow parameters that have been set up under the memorandum of understanding,” he told a regular news briefing.
Pension reform is a key performance benchmark for Greece under the three-year bailout programme, the biggest ever for an individual country. Any glitch over pensions could raise doubts about the Greek government’s resolve to carry out the programme.
The draft pension bill allows retirees to draw a full pension after 37 years of contributions, three years earlier than set out in the bailout deal agreed earlier this month.
The bill also fully implements reform in 2018, three years after an EU-IMF deadline.
“We are discussing with Greece how to make the pension reform compatible with the memorandum of understanding,” European Commission’s Director General for Economic and Monetary Affairs Marco Buti had told Reuters earlier on Tuesday.
A joint delegation of the EU, the IMF and the European Central Bank will discuss the issue with senior Greek labour ministry officials in Athens on Thursday.
“2018 seems too late for them and they tell us to go ahead in 2015,” Greek Labour Minister Andreas Loverdos said in a television interview on Monday, commenting on the letter.
Altafaj said the letter was part of regular correspondence with Athens.
“The letter contains strictly nothing new in reference to the memorandum (signed between the European Commission, Greece, the International Monetary Fund and the European Central Bank),” the spokesman said. “It was quite simply to remind people of the terms of the memorandum on this question.”
Greece will submit on Friday an actuarial study to back up its arguments in talks with EU and IMF officials, Loverdos said.
The pension bill is expected to be submitted to parliament in the coming days and to be voted on in June. The socialist government has a comfortable parliamentary majority.
The main labour unions oppose the bill, saying it will put a further burden on the poor who have already been hit by other sweeping austerity measures.
The reform aims at containing public pensions spending by cutting benefits, raising the retirement age for women and discouraging early retirements.
The IMF’s chief economist Olivier Blanchard said on Monday Greece must show determination in implementing the plan agreed with the EU and the International Monetary Fund.
New Delhi, May 12 (ANI): Finance Minister Pranab Mukherjee on Wednesday said food inflation is coming down in the wake of a good monsoon prediction.
Speaking at CII National Conference and Annual Session here, Mukherjee said: “I expect inflation based on Consumer Price Index – Industrial Workers (CPI-IW) to decline rapidly as the price of the food items is now declining.”
The government has taken a host of initiatives to deal with rising prices, Mukherjee said, adding, “Inflation erodes real income. It hurts the marginalised and the poor segment of our society the most.”
Admitting that a large chunk of people don”t get the benefit of economic growth, he urged upon the private sector to play a catalytic role in the process of inclusive growth.
“Private sector has an important role to play in filling the rural education gap especially in the area of vocational training to address the growing shortage of skilled workers,” he added.
As regards economic growth, Mukherjee said, “IMF in its latest World Economic Outlook has projected India”s GDP growth to be 8.8 per cent in 2010, and 8.4 per cent in 2011 and I expect an even better performance.”
The economy was estimated to record a growth rate of 7.2 per cent during 2009-10 despite the impact of unfavourable monsoon on the farm sector, he added.
He further said that discussions are on to strengthen the public distribution system (PDS).
“The Government also is keen to strengthen assessment and evaluation of all the programmes and schemes,” he added. (ANI)
Brasilia (Brazil), Apr.16 (ANI): The global economy can be more resilient with the help of a stable financial architecture, said leaders of Brazil, Russia, India and China (BRIC) at the end of their deliberations here on Thursday.
In a joint statement issued after their interaction, the BRIC leader said: “We believe that the world needs today a reformed and more stable financial architecture that will make the global economy less prone and more resilient to future crises, and that there is a greater need for a more stable, predictable and diversified international monetary system.”
“We support the increase of capital, under the principle of fair burden-sharing, of the International Bank for Reconstruction and Development and of the International Finance Corporation, in addition to more robust, flexible and agile client-driven support for developing economies from multilateral development banks,” they added.
They also said that they would strive to “achieve an ambitious conclusion to the ongoing and long overdue reforms of the Bretton Woods institutions.”
“The IMF and the World Bank urgently need to address their legitimacy deficits. Reforming these institutions’ governance structures requires first and foremost a substantial shift in voting power in favor of emerging market economies and developing countries to bring their participation in decision making in line with their relative weight in the world economy,” they added.
“We call for the voting power reform of the World Bank to be fulfilled in the upcoming Spring Meetings, and expect the quota reform of the IMF to be concluded by the G-20 Summit in November this year. We do also agree on the need for an open and merit based selection method, irrespective of nationality, for the heading positions of the IMF and the World Bank,” they said.
They said there is a special need to increase participation of developing countries.
“The international community must deliver a result worthy of the expectations we all share for these institutions within the agreed timeframe or run the risk of seeing them fade into obsolescence,” the BRIC joint statement quoted the leaders, as saying.
They said that in the interest of promoting international economic stability, they had asked their Finance Ministers and Central Bank Governors to look into regional monetary arrangements and discuss modalities of cooperation between our countries in this area.
On the issue of promoting international trade, the BRIC leaders laid stress on the importance of the multilateral trading system, embodied in the World Trade Organization, and called for an open, stable, equitable and non discriminatory environment for international trade.
“We reiterate the importance of the UN Millennium Declaration and the need to achieve the Millennium Development Goals (MDGs),” the BRIC leaders said. By Ravinder Singh Robin (ANI)
The International Monetary Fund on Friday approved a long-delayed loan disbursement for Iceland, releasing $160 million to the crisis-hit country.
A dispute with Britain and the Netherlands over debts owed them by Iceland had delayed the IMF disbursement, and the Fund called on all parties to resolve it “expeditiously.”
Earlier, the Netherlands said it would not try to block the disbursement because Iceland had made certain promises in writing to the IMF related to the debt dispute.
The camps have been trying for months to resolve the dispute with the British and Dutch governments over debts related to failed online bank Icesave.
“The crisis has taken a heavy toll on Iceland and its citizens, but I am confident that the policies and financing now in place will ease the burden of adjustment and help Iceland’s economy stage a recovery in the second half of 2010,” IMF Managing Director Dominique Strauss-Kahn said.
“Looking ahead, the IMF will continue to support Iceland’s efforts to address this crisis in any way it can.”
The IMF said Iceland’s monetary policy would continue to focus on preserving currency stability. If the krona appreciates further, stronger emphasis should be placed on reserve accumulation, it said.
“Iceland’s ability to fully implement the program is dependent on mobilizing bilateral external financing and regaining confidence of the markets,” Strauss-Kahn said.
“Iceland’s commitment to continue with best faith efforts to reach an agreement with the Netherlands and the United Kingdom regarding Icesave deposits is welcome, and all parties are called upon to come to a final agreement expeditiously.”
Iceland’s Economics Minister Gylfi Magnusson said the IMF’s completed review was a vote of confidence in the country’s ability to meet its goals.
“Although there has been a delay in the review we have achieved all our objectives and are well on our way with the tasks ahead of us — to further stabilize the economy, limit the impact of the negative growth on indebted families and to break further decrease in our (economic growth).”
(Editing by Andrew Hay)
LONDON, April 12 (Reuters) – Core euro zone government bonds opened lower on Monday after euro zone finance ministers on Sunday approved a 30 billion euro aid mechanism for Greece, cooling demand for the safety of German government bonds.
Together with at least 10 billion euros expected from the International Monetary Fund in the first year, the emergency loan mechanism would allow Greece to borrow funds from euro zone peers and the IMF at significantly below market rates. Greece has not requested that the loan plan be activated yet. [ID:nLDE63A0BO] “It’s a question of how far Greek government debt can normalise now on the back of that,” said a bonds trader in London.
The Greek/German 10-year bond yield spread DE10YT=TWEB GR10YT=TWEB was around 409 basis points at Friday’s settlement. The spread was expected to tighten when Greek markets open on Monday, the trader said.
At 0605 GMT, the Bund future FGBLc1 was 122.23 ticks, 61 ticks lower on the day and its lowest since mid-March.
The 10-year German bond yield EU10YT=RR was 3.23 percent, up 6.3 basis points while the two-year Schatz yield EU2YT=RR was 5.7 basis points higher at 1.05 percent.
There are no major euro zone debt auctions and little in the way of data due for release on Monday.
(Reporting by William James; editing by John Stonestreet)
(Reuters) – Viktor Orban declared a sweeping victory for his center-right Fidesz party on Sunday and told cheering supporters that leading Hungary as prime minister would be the biggest task of his life.
World
All the opinion polls had pointed to a Fidesz victory, and the weight of expectation to act quickly to put Hungary back on a track of sustainable growth after near financial collapse will be immense, from Hungarians and investors alike.
The result puts Fidesz within touching distance of the two-thirds of seats it needs to push through vital reforms. Fidesz ousted the Socialists into a distant second, just ahead of the far-right Jobbik party, which bagged one in six votes to win its first seats in parliament, the election committee said.
A second round of voting will be held on April 25 when the remaining 121 seats will be decided.
Orban’s campaign steered clear of giving away too many policy details on how he plans to create a million jobs in 10 years, but the party has said it could double the deficit target set by the IMF and EU as part of a rescue package.
“We still believe that market effects will be seen in earnest when we get news about the actual programme of the new government,” analyst Anders Svendsen, of Nordea bank, said, adding he expected “positive but limited” reaction on Monday.
Economists say Orban, 46, will need to implement deep reforms to reduce the local government sector and make the health care and education systems more efficient.
“On this splendid day Hungarians have expressed that Hungary is united, Hungary has power, is able to do great things, it wants, jobs, order and safety, Hungarians have shown to the world that it’s again good to be Hungarian,” he told 2,000 cheering supporters in central Budapest.
“I feel it with all my nerves and know it deep in my heart that I face the biggest task of my life. I will need all the Hungarian people to solve that.”
Fidesz, which last ruled between 1998 and 2002, campaigned on cutting taxes, creating jobs and supporting local businesses to boost to Hungary’s economy, which contracted by 6.3 percent last year. Unemployment is running at 11.4 percent.
The Socialist government led by technocrat Gordon Bajnai since April 2009 made painful budget cuts to rein in the deficit under the deal led by the International Monetary Fund.
“We have been waiting for this for eight years; no, for 22 years, since Fidesz was founded,” Magdolna Karbacz, 44, an entrepreneur from the western city of Szekesfehervar said at Fidesz headquarters in downtown Budapest.
TWO-THIRDS MAJORITY?
Fidesz secured 206 out of 386 parliamentary seats, the National Election Committee said, based on individual constituencies and party list votes. The Socialists won 28 seats, ahead of 26 for Jobbik, which leveraged deep discontent about the economic crisis and the large Roma minority.
The green liberal LMP also passed the threshold to get into parliament, securing five seats.
Analysts said ahead of the results that if Fidesz won 53-55 percent of party list votes and 120-130 seats in individual constituencies in the first round, it stood a strong chance of securing two-thirds of the seats.
“Based on the results of the first round, it seems strongly feasible that the two-thirds majority will be comfortably achieved,” Robert Laszlo, an analyst at Hungary’s Political Capital think-tank.
Orban was the prime minister heading the last Fidesz government and many supporters hope his government will restore Hungary’s national pride.
“Fundamentally, this country needs a renewal in its soul and in its morals. This elections can help achieving that if the (new) leaders will represent that,” said Peter Buki, 37.
Analysts said Fidesz’ strong victory was expected to have a neutral or slightly positive impact on financial markets and the forint on Monday as the election result had been expected.
“I expect moderate strengthening of the forint and a drop in government bond yields tomorrow … Global developments like Greek news and U.S. economic figures are also supportive,” said analyst Gergely Suppan of Takarekbank.
(Additional reporting by Sandor Peto and Marton Dunai; Writing by Krisztina Than; Editing by Alison Williams)
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Instant View: Hungary’s Fidesz wins 2/3 in next parliament
(Reuters) – Hungary’s center-right Fidesz party secured more than two thirds of parliamentary seats in Sunday’s second round of voting, according to preliminary figures from the National Election Committee.
World
ANALYST COMMENTS
GERGELY SUPPAN, TAKAREKBANK
“In the near term markets can give a vote of confidence in the new government but they will have to come out with their plans rather quickly.
“We may see some specific measures already in the days ahead. Some things have already leaked between the two rounds, on the basis of these it is likely that they are serious about halving the number of local government and parliament MPs.
“They apparently also want to clamp down of bureaucracy, but this will take more than one day.
“All this has to be seen against the backdrop that room for maneuver is limited so they will obviously make a push to make it larger, therefore they will pledge to eradicate corruption.
“I think they will come to agreement with the IMF quickly as they have already held consultations.
“Among analysts it is a rather widespread view that they will offer reforms in exchange for bigger room for maneuver, the question is what time frame we are looking at and when they can start.
“There are about 8,000-9,000 tasks performed by the state, they will take more than one day to halve, this is a process that requires months, maybe even years.
“If they start (reforms) quickly, that can trigger a positive market reaction in the longer run as well.
“Near term, there will be a vote of confidence in the new government and then the market will blend into the global environment, it will be driven by themes of Greece and the global recovery.
“If they act quickly, the forint can firm a bit but it must be said that this result was by and large priced in already.”
(Reporting by Sandor Peto)