BUDAPEST: Hungary will give ground on one further point to the European Union in a dispute over domestic laws that critics have labeled undemocratic but is holding firm on two central bank issues, a local newspaper reported on Monday.
Budapest has been told to change its legislation to unlock talks with EU and International Monetary Fund on financial aid seen as necessary for averting a market crisis.
The daily Magyar Nemzet, citing a draft of a government letter to Brussels, said Prime Minister Viktor Orban was ready to take on board objections to changes to the retirement ages for judges.
Orban's conservative Fidesz party has been criticised by the international community for introducing measures threaten the independence of the media, the judiciary and the central bank.
The European Commission gave Budapest until Feb. 17 to address concerns over new laws or face legal action and the risk of talks on aid being delayed further.
Magyar Nemzet cited the letter to the European Commission as saying Hungary was ready to scrap a provision on the data protection authority enabling the prime minister to dismiss the head of the supervisor.
The government spokesman's office declined comment on the specifics of the report but said it continued to seek common ground with the EU's executive on each open issue.
"As it has been customary, today, as well as in the future, Hungary wishes to cooperate with the European Commission in everything," it said in an emailed response to questions.
It said Budapest was finalising its replies and would deliver them before the Feb. 17 deadline.
PM Orban is due to give an annual speech assessing the state of the economy and the tasks facing the government at 1400 GMT on Tuesday.
RALLY
Late last month Orban said he would bring a new law on the central bank, widely criticised for infringing upon the bank's independence, in line with EU demands on nearly all contested points, prompting a big rally in Hungarian markets.
But, after a string of ratings downgrades to "junk" status, yields on Hungarian debt are still stuck above 8 percent.
Magyar Nemzet reported that Orban was sticking to provisions in the new law about central bankers' oath of office and a 2 million forint ($9,000) per month pay ceiling.
The report said Hungary wanted to tackle a dispute over mandatory cuts in the retirement age of judges, which the EU says is discriminatory, on a case-by-case basis. Hungary argues the measure is part of broader pension system changes.
Orban's state secretary, Mihaly Varga told the daily Magyar Hirlap on Saturday that Hungary was hoping to clinch a deal within one or two months with the IMF and the EU on a credit line it could tap if the European debt crisis deepens further.
Hungary is seeking a multibillion euro funding agreement from the two lenders to help it retain market access as it must roll over nearly 5 billion euros of external debt this year.
In a recent Reuters poll analysts predicted the loan arrangement would be worth about 12.5 billion euros.
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