Hungary adopts disputed central bank law

Rules could threaten funding from EU and IMF.

Hungary’s parliament today (30 December) passed a law curbing the independence of the country’s central bank.

Concerns about the new law had earlier this month prompted the European Commission and the International Monetary Fund to break off negotiations on a bail-out for the country.

 

The new rules prevent the president of the central bank from naming deputies and expanding membership of the panel that sets rates.

Earlier this month, Hungary’s credit rating was downgraded below investment status.

Viktor Orbán, Hungary’s prime minister, said today that Hungary can do without aid from the EU and the IMF. He also said that he was determined to challenge the Commission’s demands for changes to the new banking regulations.

Since taking power last year, Orbán’s government has taken a range of unorthodox economic measures. His centre-right Fidesz party holds more
than the two-thirds of seats in parliament required to change the constitution.