Proposals outside of Hungary’s budget plan that would reduce state revenue pose a big risk to meeting the deficit target, according to the EU’s Monetary Affairs Commissioner Joaquin Almunia, Almunia’s spokeswoman Amelia Torres told MTI in Luxembourg on Tuesday.
Almunia believes tax cuts contained in the budget plan are steps in the right direction, from the view of creating incentives for growth and financial stability, but further falls in revenue could put the 2009 deficit target at risk, Ms Torres said. Almunia noted that in the current uncertain financial situation, careful planning is of the utmost importance, she said. Almunia acknowledges the progress Hungary has made under its consolidation program thus far, Ms Torres said.
Hungary aims in its convergence program to bring its general government deficit down to around 3% of GDP in 2009, after years of running some of the highest deficits in the EU.
The European Commission said earlier that achieving the goals in Hungary’s convergence program are not without risk and urged the continuation of a tight fiscal policy. After the 2009 budget is approved by Parliament, Brussels is expected to assess, as usual, an updated version of the convergence program. (MTI-Econews)