With news about impending state default proliferating, the government has finally abandoned its stubborn refusal to talk to the IMF. For the time being, this has soothed markets and analysts alike, who were all concerned that by wedding itself to its anti-IMF stance, Fidesz would be unable to make this tough call even when it would offer the only way to avoid bankruptcy.

Clearly, this is an enormous political defeat for the government. Yet it remains to be hoped that having finally acknowledged the inevitable, PM Viktor Orbán and Fidesz will stick to this choice and continue to make the necessary sacrifices to stave off default. And if they do so, then their earnest efforts should be acknowledged even by those who wish for Orbán’s speedy departure.

Policy Solutions' analysis on the end of the government's "economic freedom fight" can be downloaded from here.