Hungary's government is playing a tactical game so it can eventually avoid signing an agreement with the European Union and the International Monetary Fund, the head of the country's biggest opposition party said.

"If you asked me in January I would have said it's impossible that the government doesn't want a deal. Today, I see tactical play aimed not at improving negotiating positions but dodging a deal," Chairman of the socialist MSZP party Attila Mesterhazy told Dow Jones Newswires in an interview, echoing some analysts' concerns.

"Following the relatively quiet session from the previous weeks we expect more concerning political news to turn market focus on risks related to a serious delay or potential freeze in the IMF talks," Citigroup analyst Eszter Gargyan said in a note.

The government changed its approach early January, when Hungarian assets saw a major selloff, and decided to revise its earlier reluctance to cooperate with international lenders. However, since then, the process has been bogged down in disputes about preconditions, namely pieces of legislation that Hungary must amend for formal talks to start.

"This isn't about Mr. IMF coming over and telling the helpless Hungarian prime minister what he needs to do and how deep he has to reach in his pockets," Mesterhazy said. His MSZP party was in power when Hungary was forced to turn to the IMF for support at the peak of the Lehman Brothers crisis in 2008.

"The EU/IMF don't dictate specifics, they instead expect a plan from the Hungarian government about the measures they deem adequate to achieve the necessary structural changes," he said.

"Based on the communication of the past month, I'm becoming more convinced that the Hungarian government is gambling. I don't think the prime minister gave a clear political mandate to the negotiating delegation," Mesterhazy said.

His view is that the government is hoping to buy time with delaying the talks and amble on until the economic environment improves and Hungary is able to finance itself from the markets.

In contrast, Mesterhazy's MSZP believes Hungary is very much in need of EU/IMF backing. He sees the need for a package of 20 billion to 30 billion euros, a similar magnitude to the support received in 2008.

However, in contrast to the government's insistence of the EU/IMF money functioning as a safety net, the MSZP would actually spend part of the cash implementing structural overhaul, leading to a sustainable economic path in the longer term, Mesterhazy said.

"When we negotiated with the IMF, they were more than ready to accept a program that entails growing budgetary costs, if it pays off in the long term and leads to savings," Mesterhazy said.

-By Veronika Gulyas and Gergo Racz, Dow Jones Newswires, +361-267-0622; gergo.racz@dowjones.com

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