Orbán says Brussels forcing half of fiscal improvement plan on Hungary
Half of the government's recently unveiled HUF 400 billion fiscal improvement package would not be necessary if the European Union were not forcing it on Hungary, Prime Minister Viktor Orbán said in an interview on public radio on Friday.
Orbán explained that the Commission did not think next year' fiscal deficit would be under the 3pc-of-GDP threshold, and if the government did not make changes to the budget, the EU would take away several hundred billion forints of development funding from the country. He said he thought this was not a just move, but added that the budget had to be adjusted if Hungary was not to lose funding.
Hungary is doing what Brussels expects of the country, Orbán said. But he added that the state of the Hungarian economy would be better next year than is thought in the EU and suggested this could allow the fiscal improvement package to be tweaked.
"It remains to be seen which things Brussels rules out now or wants us to rule out that we will actually act on. But we do not have to report this now, only in the first half of the year," he said.
Orbán cited as an example of such a measure a plan to postpone an increase in teachers' pay until January 2014. He said he saw a chance for numbers in the first half to allow the pay rise in September 2013.
Hungary is not far from reaching a favourable agreement with the International Monetary Fund, Orbán said. After the IMF general meeting in Tokyo winds up, new developments are expected in the matter, he added.
Hungary is seeking precautionary financial assistance from the IMF and the EU. Asked whether the government continued to intend to use money from an IMF agreement only to pay off state debt, Orbán responded in the affirmative.
Orbán said the government will announce a new economic plan in 2013 that will be targeted at the lower-middle class. People whose earnings are between the minimum wage and HUF 220,000 a month have still not had the chance to get out of their present situation, he added.
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