The Hungarian government asked the European Union and the International Monetary Fund (IMF) for financial assistance as a “precautionary” measure, the EU said in a statement this week.
The European Commission “will examine the authorities’ request in close consultation with EU Member States and the IMF,” according to the statement, confirming that Hungary sent the notice.
“The IMF team currently in Budapest will now return to Washington for consultations with the IMF’s management and the Executive Board,” IMF managing director Christine Lagarde stated on Monday, also confirming the request.
Last week, Hungary’s currency, the forint, fell to record lows and government bond yields have sharply risen, sparking fears that the country’s debt could be downgraded to junk status.
Recent figures have shown that Hungary’s total debt rose to 82 percent of gross domestic product in September, according to the BBC.
Hungary was the first EU country to receive an IMF emergency bailout in 2008 during the height of the worldwide economic crisis. The package was worth about $25 billion and also included money from the EU and World Bank.
