The European Union (EU) announced on Wednesday to lend Hungary 6.5 billion euros (8.1 billion U.S. dollars) in a joint bid with the International Monetary Fund (IMF)to help the country deal with the financial crisis.
"Against the background of heightened financial market stress in Hungary, the European Community is ready to participate in a coordinated financing package with the IMF to underpin balance-of-payments sustainability in Hungary," the EU governments and the European Commission said in a joint statement.
EU member states said they stood ready to provide a loan of 6.5billion euros to Hungary, which would be in conjunction with IMF assistance to the amount of 12.5 billion euros and World Bank assistance of 1.0 billion euros.
The EU's contribution would be raised on financial markets instead of using EU budget.
The EU said it also supports the IMF invitation to the large financial institutions operating in Hungary to continue providing adequate financing of the economy.
Hungary has been hit hard by the global financial crisis, with its currency, the forint, plunging against the euro and the U.S. dollar recently, while stocks and bonds at lowest level in multi years.
Analysts attributed Hungary's vulnerability mainly to the country's large amount of public debt, the highest budget deficit in the EU and heavy reliance on external financing.
Source:Xinhua
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