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In Hungary, central bank governor Gyorgy Matolcsy is under pressure from Viktor Orban's government to cut rates further ahead of local and European Parliament elections next year. Reuters GraphicsTANGIBLE BENEFITSA 2021 World Bank survey found that political meddling in central bank policy led to sustained periods of high inflation in emerging market economies such as Turkey and Argentina. "Attempts to bring the president of the NBP before the State Tribunal can be directly interpreted as an attack on the independence of the central bank," the spokesman said. How those premia evolve will depend partly on how politics in Poland and Hungary is perceived by investors to influence the central banks in the months to come. "Everything else being equal, the less independent the central bank, the more real yield you need to have to be compensated for the risk," said Arif Joshi at Lazard Asset Management.

Persons: Adam Glapinski, Gyorgy Matolcsy, Viktor Orban's, Donald Tusk's, Karen Vartapetov, Paul Gamble, Glapinski's, Glapinski, Marta Kightley, Orban, Peter Virovacz, Arif Joshi, Karol Badohal, Gergely, Mark John, Toby Chopra Organizations: WARSAW, Law and Justice, U.S . Federal Reserve, EU, Sovereign, Investor, Emerging, Fitch, Local, ING, Lazard Asset Management, Thomson Locations: Hungarian, Poland, Hungary, BUDAPEST, Europe, Turkey, Argentina, WARSAW

People walk past the new headquarters of the European Bank for Reconstruction and Development (EBRD) in Canary Wharf, London, Britain, September 14, 2023. REUTERS/Alishia Abodunde/File photo Acquire Licensing RightsSummaryCompanies Move follows Hungary govt exit from Erste unitGovt raising financing for airport transactionExit 'good news' for sector's stability -EBRDBUDAPEST, Nov 15 (Reuters) - The European Bank for Reconstruction and Development is selling its 15% stake in Erste Group Bank's (ERST.VI) Hungarian unit back to the Austrian group after the Hungarian government's recent exit from the bank, a top EBRD official told Reuters. Austrian lender Erste said on Friday it was repurchasing a 15% stake in its Hungarian subsidiary, currently held by Hungarian state-owned Corvinus International Investments. Francis Malige, EBRD managing director of financial institutions, said the investment had been designed to help the Hungarian bank recapitalise while supporting a positive relationship with the authorities. "We received a call notice from Erste last Friday and are proceeding with the sale of our stake to the group, based on terms agreed during our 2016 investment."

Persons: Alishia, Viktor Orban, Marton Nagy, Francis Malige, Malige, Orban, Gergely Szakacs, Louise Heavens Organizations: European Bank for Reconstruction, REUTERS, Erste Group, Reuters, Economic, Budapest Airport, Austrian, Erste, International Investments, Erste Bank, Thomson Locations: Canary Wharf, London, Britain, Hungary, Erste, BUDAPEST, Austrian, Hungarian, Erste Bank Hungary

[1/5] Hungarian Prime Minister Viktor Orban speaks as he arrives for an EU summit in Brussels, Belgium December 10, 2020. Hours after he spoke, thousands rallied in Hungary's capital Budapest, a liberal stronghold that has largely opposed Orban's agenda. Some voiced fears that Hungary might end up leaving the EU under his rule, a prospect Orban has repeatedly dismissed. Brussels is only a bad contemporary parody," Orban said in a speech in the western town of Veszprem carried exclusively by public television. "Moscow was beyond repair, but Brussels and the EU can still be fixed," Orban said, adding that current leaders of the bloc failed to protect Europe's safety, freedom and wellbeing.

Persons: Viktor Orban, John Thys, Orban, Hungary's, " Orban, Vladimir Putin, Gabor Sebo, Gergely Szakacs, Ed Osmond, Ros Russell Organizations: Pro, EU, U.S, Wood & Company, Thomson Locations: Hungarian, Brussels, Belgium, Budapest, BUDAPEST, Hungary, Hungary's, Moscow, Veszprem, U.S, China, Ukraine, Europe, Russia, EU

[1/2] A general view of Polish shoe retailer CCC shop is pictured, amid the coronavirus disease (COVID-19), in Warsaw, Poland, September 8, 2020. "Let me tell you, there was a time when I couldn't even afford to buy salmon, for example. Buczek has benefited from the fact that PiS has raised her pension as part of hefty welfare spending moves which, opinion surveys show, are easing Poles' concerns over high inflation. The Polish minimum wage, already the highest in central Europe, will rise by nearly a fifth next year. With many houseowners on variable loan rates, Warsaw recently extended a scheme for mortgage repayment holidays into next year.

Persons: Kacper, Jadwiga Buczek, Buczek, PiS, Steffen Dyck, Adam Glapinski, Fitch, Federico Barriga Salazar, Andrzej Kuzniak, Moody's Dyck, Kacper Pempel, Jan Strupczewski, Gergely, Mark John, Sharon Singleton Organizations: REUTERS, Reuters, Justice, European Union, European Commission, National Bank of, Sovereign Risk, Moody's, International Monetary Fund, Civic Coalition, Thomson Locations: Warsaw, Poland, WARSAW, Poland's, Europe, NBP, Brussels

Member of the rate-setting Monetary Council of the National Bank of Hungary Gyula Pleschinger speaks during an interview with Reuters in Budapest, Hungary, September 14, 2023. REUTERS/Krisztina Than Acquire Licensing RightsBUDAPEST, Sept 14 (Reuters) - Hungary's central bank could cut its base rate to 10-11% by the end of the year from 13%, a rate-setter told Reuters, warning however against big or unexpected moves amid the fallout from a larger-than-expected rate cut in Poland last week. Once that alignment takes place, the NBH will simplify its policy toolkit further, which could include making the interest rate corridor around its base rate symmetrical, he said. "From that point onwards, we will take all of our steps in a very serious, data-driven mode, looking at the market, tracking the market," Pleschinger said. Asked about the fallout from the National Bank of Poland's much-larger-than-expected 75 bps interest rate cut last week that saw regional currencies weaken, Pleschinger said Hungary's central bank should tread carefully.

Persons: National Bank of Hungary Gyula Pleschinger, Gyula Pleschinger, unwinding, Pleschinger, Disinflation, Gergely Szakacs, Hugh Lawson Organizations: National Bank of Hungary, Reuters, REUTERS, Rights, European, National Bank of, Thomson Locations: Budapest, Hungary, Poland, National Bank of Poland's

Geoff Gottlieb, the IMF's Senior Regional Representative for Central, Eastern and South-Eastern Europe, warned of the potential for fiscal policy to fuel inflation and so force monetary policy to remain tighter for longer. "We think Polish fiscal policy can do more to help reduce inflation," he said in an interview. "A new fiscal impetus would likely add to inflationary pressures and could also necessitate additional monetary policy tightening." "Our recommendation is for the (Monetary Policy Council) to resume monetary policy tightening if key indicators - core inflation momentum, wage growth, and the economy - fail to slow as projected," he said, urging the MPC to make clear that talk of cuts was premature. The European Commission projects Poland's average inflation rate at 6% next year, the highest in the European Union, retreating from nearly twice that level expected this year.

Farmers in Poland and other eastern European countries who held out for higher prices have been hit by a perfect storm. A jump in exports from Brazil and Russia helped to drive global grain prices lower while the EU opened its borders to tariff-free Ukrainian grain imports in a show of solidarity after Russia blocked the country's Black Sea ports. After opening its borders to Ukrainian grain, Poland imported 2.08 million tonnes of maize and 579,315 tonnes of wheat last year, up from just 6,269 tonnes of maize and 3,033 tonnes of wheat in 2021. If the grain corridor due to expire this month were to collapse, Ukrainian farmers would have little option but to send all their grain exports through eastern Europe. European wheat prices hit post-harvest highs in October 2022 of more than 350 euros a tonne but since then prices have dropped to pre-invasion levels of about 235 euros.

Summary Wedding boom, fuelled by government handouts, fizzlesSurging inflation boosts wedding costs, devalues benefitsSome couples scaling back or even scrapping wedding feastsJanuary weddings fall to lowest since January 2014BUDAPEST, March 27 (Reuters) - Soaring inflation is taking the steam out of Hungary's wedding market, supercharged in recent years by Prime Minister Viktor Orban's lavish family support measures, with the number of weddings plunging to a nine-year-low at the start of 2023. In January the number of weddings recorded in Hungary fell to 1,230, preliminary data showed - the lowest number since January 2014. "We did not think that this wedding boom would be so strong and prolonged, but it will now probably return to equilibrium." Mihaly Toth, a master of wedding ceremonies, says the number of couples planning to tie the knot is likely to fall from last year's levels. "We will just have a small family get-together and then go out with some friends for the night," Szabo said.

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