Baluarte
05-09-2013, 08:00 PM
Hungary is seeking to avoid austerity measures as it works to end nine years of European Union budget monitoring and remove the threat of funding cuts, government and ruling party officials said.
Prime Minister Viktor Orban asked Economy Minister Mihaly Varga to work out measures that are “in line with the government’s economic and social policies” and are also acceptable to the EU, Cabinet spokesman Andras Giro-Szasz said today, according to MTI state news service.
The ruling party rejects the “austerity favored by Brussels,” Antal Rogan, Fidesz’s parliamentary group leader, said after a meeting of the party’s executive committee, which includes Orban, the party’s website reported.
Orban is seeking to avoid austerity as Fidesz leads in opinion polls about a year before elections. He is also seeking to exit from the excessive-deficit procedure that threatens EU funding cuts. The grants account for 95 percent of infrastructure development in the country.
“The government is very serious about exiting the EDP, it’s been one of the main economic policy goals of the last three years,” Gergely Toth, an analyst at Buda-Cash Brokerhaz Zrt., said by phone today. Orban wants to show that he “inflicts the least possible pain on the population. That won’t change.”
The forint gained 0.1 percent to 292.88 per euro by 5:36 p.m. in Budapest near its strongest since February. It has gained 1.1 percent in the past five days, the fourth-best performance among 31 major currencies tracked by Bloomberg.
‘New Measures’
Hungary implementing “new measures” would ensure that the budget gap stays within the EU limit of 3 percent of economic output this year and next and may allow the country to exit the excessive-deficit procedure for the first time since joining the trading bloc in 2004, EU Economic and Monetary Affairs Commissioner Olli Rehn said on May 3. The shortfall may be 3 percent of output this year and 3.3 percent next year, the European Commission said.
Hungary has “one or two weeks” to take budget steps if it wants the EU executive to take them into account in its May 29 recommendation on whether the country should be able to exit the budget procedure, Economy Ministry State Secretary Gabor Orban said in an interview published in the Figyelo weekly today. Hungary needs to save 100 billion forint ($447 million) according to EU estimates, he said.
The government failing to take budget steps by mid-May will delay an EU decision on Hungary’s exit from the bloc’s budget shackles to autumn, Figyelo said, citing State Secretary Orban. Hungary is eyeing an exit from the deficit procedure “at the end of the second half” of this year, Giro-Szasz said, according to MTI.
Budget Cuts
Hungary passed multiple rounds of fiscal cuts last year to prevent the loss of EU funds, reducing the deficit to 1.9 percent of GDP. The government has “essentially satisfied” the requirements to exit the EDP with its fiscal consolidation, Rogan said, according to the Fidesz website.
The government predicts that the economy will emerge from its second recession in four years in 2013. While the government forecasts 0.7 percent growth this year, Prime Minister Orban said this week that GDP may rise 1 percent. That compares with an EU forecast for 0.2 percent growth.
Orban has relied on the nationalization of private pension funds and extraordinary levies on energy, retail and telecommunications companies as well as Europe’s highest bank tax to close budget holes. The government has said lobbying by companies hurt by tax levies and energy-price cuts are responsible for the EU’s objections to Hungarian policies.
Backing for Orban’s Fidesz party rose to 29 percent among eligible voters in April from 27 percent the previous month, according to a Median poll published May 6. That compares with 13 percent support for the Socialists, the biggest opposition party. Median polled 1,200 adults between April 19 and 23 and the results had a margin of error of 3 percent.
To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net
To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net
Prime Minister Viktor Orban asked Economy Minister Mihaly Varga to work out measures that are “in line with the government’s economic and social policies” and are also acceptable to the EU, Cabinet spokesman Andras Giro-Szasz said today, according to MTI state news service.
The ruling party rejects the “austerity favored by Brussels,” Antal Rogan, Fidesz’s parliamentary group leader, said after a meeting of the party’s executive committee, which includes Orban, the party’s website reported.
Orban is seeking to avoid austerity as Fidesz leads in opinion polls about a year before elections. He is also seeking to exit from the excessive-deficit procedure that threatens EU funding cuts. The grants account for 95 percent of infrastructure development in the country.
“The government is very serious about exiting the EDP, it’s been one of the main economic policy goals of the last three years,” Gergely Toth, an analyst at Buda-Cash Brokerhaz Zrt., said by phone today. Orban wants to show that he “inflicts the least possible pain on the population. That won’t change.”
The forint gained 0.1 percent to 292.88 per euro by 5:36 p.m. in Budapest near its strongest since February. It has gained 1.1 percent in the past five days, the fourth-best performance among 31 major currencies tracked by Bloomberg.
‘New Measures’
Hungary implementing “new measures” would ensure that the budget gap stays within the EU limit of 3 percent of economic output this year and next and may allow the country to exit the excessive-deficit procedure for the first time since joining the trading bloc in 2004, EU Economic and Monetary Affairs Commissioner Olli Rehn said on May 3. The shortfall may be 3 percent of output this year and 3.3 percent next year, the European Commission said.
Hungary has “one or two weeks” to take budget steps if it wants the EU executive to take them into account in its May 29 recommendation on whether the country should be able to exit the budget procedure, Economy Ministry State Secretary Gabor Orban said in an interview published in the Figyelo weekly today. Hungary needs to save 100 billion forint ($447 million) according to EU estimates, he said.
The government failing to take budget steps by mid-May will delay an EU decision on Hungary’s exit from the bloc’s budget shackles to autumn, Figyelo said, citing State Secretary Orban. Hungary is eyeing an exit from the deficit procedure “at the end of the second half” of this year, Giro-Szasz said, according to MTI.
Budget Cuts
Hungary passed multiple rounds of fiscal cuts last year to prevent the loss of EU funds, reducing the deficit to 1.9 percent of GDP. The government has “essentially satisfied” the requirements to exit the EDP with its fiscal consolidation, Rogan said, according to the Fidesz website.
The government predicts that the economy will emerge from its second recession in four years in 2013. While the government forecasts 0.7 percent growth this year, Prime Minister Orban said this week that GDP may rise 1 percent. That compares with an EU forecast for 0.2 percent growth.
Orban has relied on the nationalization of private pension funds and extraordinary levies on energy, retail and telecommunications companies as well as Europe’s highest bank tax to close budget holes. The government has said lobbying by companies hurt by tax levies and energy-price cuts are responsible for the EU’s objections to Hungarian policies.
Backing for Orban’s Fidesz party rose to 29 percent among eligible voters in April from 27 percent the previous month, according to a Median poll published May 6. That compares with 13 percent support for the Socialists, the biggest opposition party. Median polled 1,200 adults between April 19 and 23 and the results had a margin of error of 3 percent.
To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net
To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net