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Home Publications Blogs Beat the Press IMF and the European Union Support Larger Deficit in Hungary to Help Banks

IMF and the European Union Support Larger Deficit in Hungary to Help Banks

Monday, 19 July 2010 11:30

The NYT reported that negotiations between Hungary and the IMF and EU on the release of additional funds reached a deadlock over the weekend. Buried deep in the article, the NYT reported that:

"The I.M.F and E.U had criticized Hungary’s decision to impose a special tax on financial institutions, saying it would send the wrong signal to investors and could hurt economic growth."

This is striking since apparently the IMF and the EU are insisting that Hungary tax measures like cutting benefits for retirees rather than tax banks. This would have been worth publicizing.

The IMF has publicly claimed that it supported making the banks and either financial institutions pay more towards supporting government budgets. The effort to force Hungary to get rid of its bank tax, apparently accompanied by the threat of withholding funds, suggests that it is not following in practice the position that it has taken in public. This contradiction merits attention from the media.  


Comments (5)Add Comment
written by Chad, July 19, 2010 12:10
Hey Dean, what are your thoughts on the feud between Elizabeth Warren and Timothy Geithner? These are two high profile people with radically differen philosophies, similar to Rumsfeld and Powell Geithner, a disciple of Summers, Rubin, and Greenspan, is an advocate for the free market being faultless and anything we do to police it only does more damage than good. Warren is one that believes corporate greed and arrogance is self destructive for unregulated companies and also destroying the people in this country by creating a two-class system. Geithner wants to hide bank losses and Warren wants to expose them This is some real reporting at work here

And it is an issue that will shape the future of bank regulation in the U.S. for some time to come.
the imf will make us all hungary
written by frankenduf, July 19, 2010 12:12
actually, i would say the imf has been consistent throughout it's lifespan in imposing fiscal austerity on mostly third world countries, which was ok because when they sink into poverty for the masses (the investors expatriate their profits), nobody cares- well see how well the imf policies are welcomed when they work their magic on first world economies (japan, anyone?)
written by Queen of Sheba, July 19, 2010 1:56
Is this why the recently-passed FinReg bill here in the U.S. failed to tax bank profits or slap a tax on financial transactions - because our economic Wizards are afraid of the IMF? Or maybe it's because our Wizards share the views of the IMF and don't give a damn about sending the "wrong signal" to the vast majority of the people of this country who don't work on Wall Street. Well, we're getting the message.
written by fuller schmidt, July 20, 2010 12:34
First, find out what and who actual market-makers, and then leave them alone. They (we) are already taxed as regular income. If you think it's so easy, go be one.
written by fuller schmidt, July 20, 2010 12:35
...actual market-makers are...

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.