* Business * European debt crisis Hungary to ask for ‘precautionary’ €10bn–€20bn bailout from EU and IMF

Graeme Wearden

• Budapest seeks new credit line in case European economic situation deteriorates
• Country will run larger deficit than planned next year

Hungary’s economics minister György Matolcsy talking to Reuters in Budapest this morning. Photograph: Karoly Arvai/REUTERS

Hungary is planning to ask the International Monetary fund and the European Union for a “precautionary” two-year rescue package worth €10bn-€20bn (£8bn-£16bn) as it continues to try to control its finances.

Economy minister György Matolcsy said this morning that Hungary believes it needs to arrange a new credit line from the IMF and the EU in case the European economic situation deteriorates. Speaking to Reuters in Budapest, Matolcsy also said that Hungary will seek agreement to run a larger deficit than planned next year.

Under its current plan agreed with the IMF, Hungary is committed to keeping its annual budget deficit to 3.8% in 2010, and then below 3% in 2011. Matolcsy now suggests that next year’s target may need to be relaxed. “I think we should agree with our partners on a range of between 3% and 3.8% [for 2011], undertaking very deep serious structural reforms,” he said.

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