Michel Camdessus, Managing Director of the International Monetary Fund, who on June 5 met with a top-brass delegation from Hungary led by the prime minister, welcomed the Hungarian government's March stabilization package, calling it "courageous and substantive" in an IMF News Brief, dated June 6. At the same time he considers it only a first phase in a program "aimed at achieving a noninflationary growth path with external viability." Starting with a visit to Budapest in late June, the IMF staff will work closely with the Hungarian authorities on the next phase of this program, to be formulated in the context of the preparation of the 1996 budget. Managing Director Camdessus is prepared to recommend to the Executive Board that the IMF give financial support to the program, provided it realizes the following objectives:

•A substantial reduction in the government deficit.

•A significant reduction in inflation and maintenance of international competitiveness, through wage and monetary policies (application of the crawling-peg exchange rate).

•Structural reform of the public sector—that is, improved fiscal control mechanisms, more efficient public administration, broadening of revenue bases to reduce distortions in the tax system, and adjustments in the social security system to safeguard its viability while providing adequate assistance to those in need.

•Structural reform of enterprises and banks to curtail the role of the state and increase the responsiveness of the economy to market signals—this will require, renewed privatization efforts.