IMF/EU loan deal gives Hungary a helping hand

Hungary is to receive a 20 billion-euro international rescue package to help ease the strain of the financial crisis.

It is the biggest such deal for an emerging economy since the start of the crisis and the first for an EU member state.

The International Monetary Fund will lend 12.5 billion euros, the European Union will add 6.5 billion euros. The World Bank will provide a further loan of 1.5 billion euros.

Hungary’s Prime Minister Ferenc Gyurcsany said the IMF had two reasonable conditions: that Hungary plans a budget for the worst case scenario, where the funds already exist and that it doesn’t commit to lowering tax revenue.

The IMF has said it has 200 billion euros available to boost the coffers of countries in crisis.

Last week it approved loans to Iceland and Ukraine.

Yesterday the British and French leaders spoke of the need for the IMF to step in and help eastern European countries and other emerging economies to stop the crisis spreading.

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