Dow Jones
July 19, 2010

BUDAPEST (Dow Jones)–Hungary’s talks with the International Monetary Fund and the European Union broke off Saturday as the government refused to implement fiscal austerity measures to reach this year’s budget deficit target, Economy Minister Gyorgy Matolcsy said Sunday.

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“We said that further austerity measures cannot be carried out…That’s the problem that we are in the fifth year of austerity measures, that’s why we are where we are,” Matolcsy said in an interview on private television channel HirTV.

The IMF and EU walked out Saturday from their latest review of Hungary’s EUR20 billion credit line that would allow the country to draw on the remainder of its credit, which will expire in October.

The IMF said Hungary continues to face fiscal challenges and should present sustainable and structural means of reducing its budget deficit.

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