Gov't was wrong to allow illusion of prosperity, says Gyurcsány

Banking

It was wrong of Hungary's Socialist-led government to give the illusion for so long that the country was enjoying prosperity, said Prime Minister Ferenc Gyurcsány in an interview with a Sunday paper.

It was also a mistake to cut the top rate of value-added tax at the start of the year to 20% from 25%. The government recently announced that VAT components will be hiked once again. He added that the Socialist party was wrong to have tried to ignore the woeful state of the budget during the election campaign. "I admit that the past six years we haven't been able to properly reconcile the needs of society with the economic possibilities available," he said. Hungary's political parties got into a vicious circle of false promises to the electorate, said the prime minister. The government recently upped its projection for the budget shortfall this year from 6.1% to 8.5% while at the same time introducing Ft 350 billion worth of tightening measures, mostly in the form of tax hikes. Asked why his government did not at the time retract those elements of its legislative agenda that have since turned out to have been misguided, Gyurcsány said "No one would have accepted the political risks associated with an ill-considered correction". The tax exemption of the minimum wage will be cancelled next year because currently 40% of employes are registered at the minimum wage and 3 out of 4 of these employees get extra cash in the pocket. This loophole will be closed.

ADVERTISEMENT

Climate change hurts economy, but creates new business oppor... Analysis

Climate change hurts economy, but creates new business oppor...

Lawmakers approve 2022 budget Parliament

Lawmakers approve 2022 budget

Dentons rehires banking and finance partner Appointments

Dentons rehires banking and finance partner

Budapest launches revamped coupon card for visitors City

Budapest launches revamped coupon card for visitors

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.