Hungary, Brussels negotiate HUF 600 bln in funding



Hungary is still in talks with the European Commission on the more than HUF 600 billion in European Union funding for the 2007-2013 period, state secretary Péter Benő Bánai said today in an interview with state-owned all-news channel M1.

Yesterday, a release by the National Economy Ministry showed that Hungaryʼs cashflow-based general government deficit, excluding local councils, reached HUF 970.7 bln at the end of November or 108.8% of the full-year target.

The ministry noted that the deficit had reached just HUF 713.7 bln in the base period and attributed the difference to “disparate developments ” related to European Union funding. “Till now, the budget has transferred more than HUF 500 bln of higher payments in the interest of ensuring the implementation of domestic developments and avoiding a possible loss of resources, ” it explained.

Hungaryʼs government provided bridge financing from the budget for EU-supported projects during a suspension of EU funding between April and September. Brussels had suspended the funding due to problems with the selection process for projects.

Bánai said today that the better part of the talks on the funds could drag on into 2016, but would eventually wind up clearing the way for the transfer of the monies by next year, at the latest.

Under EU accounting rules, the funding can still be booked as revenue, even though it has not arrived, thus it will not impact the 2.4%-of-GDP general government target for this year, he added.

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