Parliament approves 2014 budget bill, more

MNB

Most important on the agenda in Parliament yesterday was the central budget bill for 2014 which as expected passed on a vote led by the Fidesz-KDNP constitutional majority. Passage of the budget was just one piece of legislation made into law yesterday, however.

The bill detailing next year’s budget was approved with a vote of 252-84, with all nay votes cast by opposition party MPs.

The budget figures for revenue of HUF 15.9837 trillion and expenditures of HUF 16.9683 trillion, producing a deficit of HUF 984.6 billion (approximately €3.29 billion). Parliament had made some last-minute modifications to the budget on Monday, including a HUF 416 billion cut in funding for local governments which will go towards debt consolidation in the central budget. This does not affect Hungary’s government debt, with a 76.9% target next year as a percentage of gross domestic products down from 77.4% at the end of 2013, according to the bill.

Among other approved bills was a new law redefining the definition of payment service providers (PSPs); in future, those issuing electronic money must apply for an operating license from the National Bank of Hungary (MNB), while those issuing vouchers are now requiring to register with the MNB as well.

An amendment was made to tax law on severance pay for civil servants and government-owned company directors. The rate will be reduced on former special tax for those receiving HUF 2 million or more from 98% to 75%. The 98% rate had been challenged in the European Court of Human Rights as recently as November, with the court ruling against the plaintiff who had attempted to sue for damages.

Finally, an exchange rate cap scheme that will include non-performing bank loans was approved; the scheme will allow repayment with rates capped until the loan’s maturity or over a period of five years, whichever is longer. Borrowers of forex-based bank loans who have gone beyond 90 days past due on payment between August and November 2013 may join the scheme at any point until February 7.

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