Speaking on a TV show, President Hipólito Mejía directly contradicted Malkum. `I don't agree,' he said. `Economists tend to believe that the best course of action is to halt everything, but there are a thousand public works that need finishing, and I will finish them. I can't make any more sacrifices.' He added that after having heeded the advice of the central bank for three years, it was now their turn for belt-tightening.
HONDURAS | On collision course with IMF. After visiting IMF mission chief Adrienne Cheasty proclaimed in Tegucigalpa that Honduras has no future without fiscal adjustment, and that this is a condition of any agreement with the Fund, the president of congress, Porfirio Lobo, said that he considered unlikely the approval of a new adjustment programme. He particularly underlined that there would be no repeal of the statutes governing the teaching and medical professions, as had been recommended by the IMF. Several legislators went further, saying that a third paquetazo (the popular term for adjustment package) in a row would create a situation of ungovernability. A second IMF mission is expected to turn up in November to discuss details of the letter of intent underpinning a new standby agreement, which is being sought as the `green light' for some US$600m in external financing. Just before leaving, Cheasty sought to drive home her point by noting that Honduras needed fiscal adjustment whether or not it closed a deal with the IMF.
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