Gov’t announces new fiscal adjustments to ensure EDP is lifted


Hungary's government on Friday announced a new round of fiscal adjustments to ensure the European Commission's excessive deficit procedure (EDP) against the country is lifted.
    The government said it will order a freeze of budget expenditures worth about 0.3% of GDP – the difference between the European Commission's projection for the country's deficit in 2013 and the government's. If the EC deems the freeze insufficient, government expenditures worth about 0.2% of GDP will continue only if they are covered with one of revenue from the sale of state assets.
    If the EC still believes these measures are not enough to keep the deficit under the 3% of GDP European Union threshold, “the government is prepared to achieve the threshold by raising the extraordinary tax on financial institutions, the tax on energy suppliers' profit and the financial transactions duty,” the government sad.
    If necessary to achieve the deficit target for 2014, the government will also halt spending on big, one-off state investments unless they are funded with revenue from the sale of state assets.
    When projecting Hungary's fiscal deficit above the government's projection, the European Commission has not taken into account the fact that the government will keep all spending items nominally unchanged both in 2013 and in 2014, where there is no legislative obligation to do otherwise, National Economy Minister Mihály Varga said. This applies to public sector wages too, he added. The EC experts didn’t consider the various measures taken to improve the efficiency of tax collection, he said.
    Varga also noted that the EC fails to fully consider the savings resulting from a transfer of tasks from the local councils to the central government, the partial takeover of municipal debt by the government and new legislation making the management of local governments more disciplined.


Chemark Inaugurates EUR 13 mln Pesticides Plant Crops

Chemark Inaugurates EUR 13 mln Pesticides Plant

MPs Approve Tax Changes Parliament

MPs Approve Tax Changes

Higher Sugar Prices Raising Holiday Candy Costs Retail

Higher Sugar Prices Raising Holiday Candy Costs

Hungarian Tourism in Croatia Returning to Pre-pandemic Level... Tourism

Hungarian Tourism in Croatia Returning to Pre-pandemic Level...


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.