TAX NEWS - June 2010

Erste CEO can't detail effects of Hungary tax yet

Austria's Erste Group (ERST.VI), which aims to become the number-two lender in Hungary, expects long negotiations about the country's proposed bank tax and said it could not yet detail the effects on results.

Hungary's new prime minister, Viktor Orban, on Tuesday vowed to introduce a tax on banks, seen raising 200 billion forints ($855.6 million) for this year alone, as part of measures to reduce the budget deficit and allay fears of markets, rattled by officials from Orban's Fidesz party last week, that the country could face a Greek-style debt crisis.

"That is sort of the reflex of some politicians now - let's mention an amount, put it to the public and then let's talk about how we actually do it. So we don't know and we think there will be some lengthy negotiations on that over the next weeks and months," Erste Chief Executive Andreas Treichl told Reuters Insider.