EU considers reducing Hungary's funding
Tuesday, November 8, 2005, 14:10
The European Union has considered lowering Hungary's subsidies and cohesion funding, if Hungary does not take adequate measures with regard to Brussels' recommendations for reducing its general government deficit, Economic and Monetary Affairs Commissioner Joaquin Almunia said after a meeting of EU finance ministers on Tuesday.
As Hungary is not member of the euro zone, sanctions for excessive deficit procedure do not apply. So the other possible penalty Hungary can receive for lack of compliance, not directly linked with excessive deficit procedure, is the possibility of suspending the cohesion funds, Reuters quoted Almunia as saying. He noted, however, that any discussion of reducing Hungary's EU funding was not automatically linked to the excessive deficit procedure.
Almunia said recommendations the EU would deliver to Hungary at the beginning of next year would be strict and the government would be made accountable for them. Almunia was speaking after the finance ministers approved an assessment by the European Commission in which it said Hungary is not doing enough to reduce its deficit.