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Economy minister confirms that EU nixed govt's proposed increase of deficit target

National Economy Minister György Matolcsy confirmed in an article published in the business daily Világgazdaság that European Union officials rejected the Fidesz-led government's bid earlier this month to raise the 2010 government-deficit target.

Matolcsy wrote that European Union officials told Prime Minister Viktor Orbán that Hungary could not raise its 2010 deficit projection because the country is the only member of the EU undergoing double excessive-deficit procedures.

European Commission President Manuel Barosso said at a joint press-conference with Prime Minister Orbán on June 4 that “There is no room for complacency. Pursuing fiscal consolidation, meeting the agreed deficit targets, continuing structural reforms, all these are crucial.”

Officials from the Fidesz-led government said prior to Orbán's meeting with EU officials that Hungary's 2010 deficit target of 3.8% of GDP was not attainable.

The government had three days to take draw up a program -- the 29-point economic action-plan Prime Minister Viktor Orbán presented to parliament on June 8 -- which would cut the deficit from a forecast 5.1% of GDP to 3.8% and at the same time gives a kickstart to growth. The room of maneuver was limited by the arrival of a non-official IMF delegation just the following week, Matolcsy noted. (MTI – Econews)