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BREAKING: Gov't announces details of reform package

Deputy Prime Minister Tibor Navracsics begins the expose by highlighting the dire position the Hungarian economy finds itself, blaming the conditions on the previous government. He highlighted the soaring national debt that came from the period.

Socialist governments have been known to introduce austerity measures, a politics that failed, Navracsics said. Stringency only made matters worse, he said.

The structural reforms have three goals:

Reduce state debt, because it limits any ambitions of economic growth.

Preventing the regeneration of state debt. We need a system that is stable and fair.

Create conditions that give the economy lasting momentum.

The steps are as follows:

Reducing paid vacation for ministers as a gesture, as a show of solidarity with the public.

From April 1, a new healthcare subsidy system to be ratified by July 1. HUF 298 billion going into the health system for upgrade.

By July 1, regulation on freezing household overhead cost

New public procurement regulation

New community work regulations.

New regulations on disability and age-benefit retirement.

New career model in the public sector.

Revising sick pay regulations.

New, sustainable, pension system.

New constitution placing upper limit on state debt.

Smaller parliament in 2014.

Freezing party finances.

Economy Minister György Matolcsy takes the stage to reveal the details.

The government decided on a plan that “would attack state debt.” The plan would take the debt down to 65%-70% of GDP by 2014.

Seven debt generating areas were found.

Hungary is not rich, it cannot bear the kind of state debts that are common in wealthier EU states. There are also “bubble” threats that are prone to bury us.

Hungary is far too dependent on foreign markets, it is our true weakness and vulnerability. This translates to the debt of households and business, but it is the state that has to solve this.

Hungary is squandering, which greatly raises state debt.

The country has fallen behind in sciences, hindering appeal to industrial investors.

Using nationalized pension fund assets to enact one-off reductions in state debt will happen. Some 63% will go to this purpose. It will take debt to 76%-77% from over 80%

We need an austere state administration system by 2014. This is serious but a promising decision. This allows continuous debt reduction.

There is the Széll Kálmán plan that helps ending squandering to gradually cut debt. In 2012 it will improve balance by HUF 550 billion. In 2013 and 2014 it will improve the situation by HUF 900 billion each.

One off revenues will also be used for this aim. The three years of bank tax will add up HUF 180 directed at state debt reduction.

E-road earnings likewise.

Postponing the reduction of industry taxes.

Yes we are going to be among the first form the last, one of the leading countries. We will reach a level in 2014 that is suitable.