Hungary's financial situation critical, FT says
Hungary is in a critical financial situation, the London-based Financial Times said on Monday.
The government's efforts to rein in the budget deficit, estimated to be over 10% of GDP in 2006, are “too little, too late,” FT said. A package of financial laws passed by parliament last week concentrates on increased revenues, which will slow economic growth down and many of the measures will not have a tangible effect before 2008, the European Union's deadline for Hungary to reduce the public finance deficit below 3% of GDP, a prerequisite for joining the euro-zone, the paper said. The fiscal consolidation package also fails to address the main source of the budgetary shortfall expenditure, particularly the inefficient and over-generous social security system, the paper said.
Hungary is not just in a worrying condition, but is on the critical list, the Financial Times concluded.
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