IMF, World Bank and EU agree deal for Hungary

Hungary and the International Monetary Fund (IMF), World Bank and the European Union (EU) have announced the details of a rescue plan, with the Eastern European country securing a 20 billion-euro ($25.5 billion) package.

The IMF will lead the way by lending 12.5 billion euros, the EU entered with 6.5 billion and the World Bank made up the rest.

The assets of the country took an obliteration of its assets and slower growth, an increased budget deficit and investors getting cold feet following the fall of the currency, meant the country had difficulty in securing funding.

The institutions that have provided the backing as well as the size of the fund that has been provided has astounded analysts, indicating that everything has been done to protect the country.

Hungary follows a raft of Eastern European countries that are turning to the IMF as investors are leaving.

In order to restore confidence, the IMF is providing a 17-month agreement so all the credit does not necessarily have to be used in one lump sum, as the fund that has been allocated is actually 3 times the limit allowed.

Hungary’s Prime Minister, Ferenc Gyurcsany, warned the country is likely to slide into recession next year, however the fund has firmed up the country’s financial markets.

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