October 13, 2008 / 7:22 AM / 11 years ago

REFILE-UPDATE 1-IMF ready to help Hungary, EU says

(adds dropped words in paragraphs 3-4)

BRUSSELS, Oct 13 (Reuters) - The International Monetary Fund is ready to offer financial and technical help to Hungary, the European Union said on Monday, expressing its support for the new member state’s efforts to overcome its financial woes.

“The Ecofin (EU finance ministers) welcomes the readiness of the IMF to consider providing technical and financial assistance as needed to Hungary,” the executive European Commission and the EU’s French presidency said in a joint statement.

They said they were following the situation on Hungary’s financial markets closely following severe pressure on the forint EURHUF=D2 and Hungarian bonds on Friday.

Hungary has been hit hard by the global financial crisis because it has one of the most fragile economies in Europe due to high budget and current account deficits and heavy reliance on external financing, analysts say.

To reduce fragility, Budapest announced plans to cut this year’s budget deficit to 3.4 percent of gross domestic product from an earlier projection of 3.8 percent and cut it further to 2.9 percent next year, below the earlier planned 3.2 percent.

“We are committed to use all available instruments with a view to supporting Hungary in steering its economy through these difficult times,” the Commission and presidency said, adding the country had improved its macro-economic policies since 2006.

The EU authorities said they were in contact with Hungary to ensure that any conditions attached to possible IMF aid were consistent with economic goal agreed with the EU.

For more on Hungary’s economic problems, double click on: [ID:LC690632]

Writing by Marcin Grajewski; Editing by Paul Taylor

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