The Economy Ministry said it is ready to modify the MNB law further to meet expectations of the IMF and the European Central Bank (ECB), Magyar Nemzet reported.

Although the European Commission views modifications to the MNB law as sufficient, in order for talks to start the government needs to address ECB concerns, he added.

The ECB asked for modifications that guarantee independence of the central bank, which is why he had moved to postpone final voting on the bill. This week questions about the number of monetary council members and whether a third deputy governor can be appointed needs to be addressed.

Rumours have been spreading for months that the government was making plans to seize MNB's vast reserves for its own fiscal purposes, Magyar Nemzet noted.

Varga reiterated that the government is not looking to draw on funds later, but rather is seeking a safety net that mitigates risk and facilitates Hungary's access to market financing to bring down financing costs.

At the June 22 Ecofin meeting, EU finance ministers are expected to lift the freeze on cohesion fund transfers to Hungary for 2013, he said.

Varga said Hungary's economy could grow faster than forecast this year as Germany's economy seems more resilient to the eurozone crisis. Varga expects GDP to grow 0.5% this year, compared with the government's official 0.1% target. The government projects the economy to expand 1% in 2013.

Source: Hungary Around the Clock

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