EU nations must run own debt risk -Hungary PM
* Hungary PM: prefers EU members to run own risk in helping banks
* Hungary is able to finance itself from markets -PM
* OTP Bank is stable, could pass mush stricter stress tests -PM
BUDAPEST, Oct 23 (Reuters) - Hungary wants each European country to run their own risk in the debt crisis, and countries where the bank system needs no extra capital, such as Hungary, should not have to contribute funds, Prime Minister Viktor Orban told MR1 public radio on Sunday.
European Union leaders meet on Sunday to hammer out a solution to the debt crisis after finance ministers outlined a deal on Saturday for recapitalising European banks, and Germany and France said they hoped for a breakthrough at a summit on Wednesday.
Orban said Hungary's interests were in line with major EU countries, but added that each nation must be allowed to chart its own path.
If the EU were to propose policies that run counter to Hungary's interests, such as tax harmonisation, Orban said he would veto such moves.
He said that recapitalising banks was a foregone conclusion and the only question was the source of the necessary funds, which he put around 100-120 billion euros.
He said every country should run their own risk, and noted that even though Hungary had been the first beneficiary of a bailout by the EU and the International Monetary Fund in 2008, it no longer depended on such loans to finance its debt.
"Hungary exited its dependent status to the EU and the IMF," he told MR1. "We are standing on our own feet. We run our own risk. We finance Hungary from the international financial markets, not from international loans."
Hungary's banks, including its only major bank by European measure, OTP Bank , was well capitalised and needed no help despite extra burdens put on the Hungarian bank sector recently, Orban said.
Hungary's parliament passed legislation last month to allow foreign currency mortgage holders early repayment at favourable exchange rates, potentially causing banks billions of euros of losses, on top of a special 187 billion forint ($870 million)bank tax, levied annually until 2012.
"Hungary's banks are not in trouble, or more precisely... OTP does not suffer from such (capital) problems," Orban said.
"OTP came in third among European banks at the last stress test. The early repayment scheme does not leave them in an easy situation, obviously it deteriorates their position somewhat. But all in all I believe OTP could withstand even a much stricter stress test.
"If it did get in trouble after all, then the Hungarian budget -- because of the order of magnitude OTP represents -- would be able to tackle the problem." ($1=214.607 Hungarian Forints) (Reporting by Marton Dunai; Editing by Mike Nesbit)
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