Varga Presses to Preserve EU Members' 'Economic Sovereignty'

Analysis

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Finance Minister Mihály Varga conceded that managing growing budget deficits and state debt levels required the start of new practices within the European Union, but said the European Commission couldn't be allowed to take over more elements of national sovereignty from member states after a meeting of his EU peers in Luxembourg on Tuesday.

Together with other countries, Hungary wants to put its economy back on a path of stable growth, just like before the pandemic, Mr Varga told Hungarian journalists after the Ecofin meeting.

Determining scopes of power is a "fundamental question" as is keeping national budgets in the national interest, decided by governments elected by the people, rather than by the European Commission, deal-making, or other interests, he added.

He said a new system to reduce budget gaps and state debt levels would be "pretense" if it allowed the EC to intervene to an even greater degree in member states' fiscal policy, violating the principle of equal treatment, too.

He warned that the planned changes were "disguised in the cloak of European unity" and aimed to take away "important elements of national sovereignty".

"Hungary is committed to European cooperation, but it does not wish to give up its national sovereignty, its economic self-determination," he said.

Varga acknowledged a divide between member states in the north who want tighter fiscal rules and member states in the south who want more flexible rules and said Hungary backs a system that is "well thought out and acceptable to everybody".

He reiterated Hungary's position on allowing member states, especially those that are neighbors to Ukraine, to adjust their deficits to reflect necessary increases in expenditures, as well as spending on border protection. Hungary has spent HUF 650 billion on border defense since building a fence along its border with Serbia, the EU frontier, while getting a "very modest" reimbursement from the EC, he added.

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