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EU says Hungary must boost supplementary projects

The Hungarian government may not hold back surplus EU funding resulting from changes in the euro/forint exchange rate, EU Commissioner for Regional Policy Danuta Hubner said in a statement responding to a written question by a Hungarian MEP.

The amount of EU funding that Hungary receives in euros but converts into forints has increased because of a sharp weakening of the forint. But the funding the state pays out is based on the exchange rate at the time it signed the contract for the support, meaning recipients get an amount calculated with an exchange rate that can be 2-3 years old.

The state of Hungary must use the surplus resulting from the recent exchange rate changes to support supplemental projects, Hubner said in the statement. The Hungarian authorities have already been informed of the possible solutions, though the appropriate management of risks is in their capacity alone, she added.

Regardless of any exchange rate changes, the co-financing requirement of the Hungarian state for EU-funding projects will remain 15%, Hubner said.

At the end of March, Parliament's ad hoc committee for the implementation of the New Hungary Development Plan decided to ask the government to confirm, with a decree, its intention to compensate recipients of EU development funding because of the weaker forint within a month.

Committee chairwoman Ildikó Gáll Pelcz noted that National Development and Economy Ministry state secretary László Varjú had said that an agreement had been reached on using a surplus of funding from Brussels resulting from the weaker forint to compensate recipients for higher project costs, also a result of the weaker forint.

Varjú told the committee that the system for compensating grant recipients would be prepared in the coming weeks. (MTI – Econews)