PM seeks compromise on economic stimulus package

Banking

Hungarian Prime Minister Ferenc Gyurcsány called for a compromise on a broad-ranging economic stimulus package and said several other elements must be used to boost growth in addition to changes to the tax system.

Gyurcsány said the state's real reserves - that could be used to offset revenue lost because of tax cuts - are the 20% of Hungarians that don't carry their fair share of the public burden. More than Ft 1,000 billion in tax and contributions could come from the shadow economy, he added.

A reduction in taxes and contributions is necessary, but this can neither compromise the state's ability to operate nor threaten the level of social security Hungarians enjoy, he said. The government will set aside reserves in the first year of the package as it does not expect a crackdown on the shadow economy to show bigger results than earlier at the start. (MTI – Econews)

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