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Govt approves HUF 250 bln fiscal stability reserve

The government has approved a proposal to establish a HUF 250 billion stability reserve in the budget, government spokesperson Anna Nagy said on Friday, after a cabinet meeting held in Siófok, at the Lake Balaton, on Friday.

National Economy Minister György Matolcsy announced the proposal for the reserves a week earlier.

The reserves, to be established in this year's budget, would act as a buffer against the rolling waves of the European financial system in the presence of serious external risks, Matolcsy said at the time. The reserves would only be spent after risks were present, otherwise they would be made available again at the end of the year for goals in the general government act, he added.

The money, equivalent to about 1% of GDP, would come from budget chapters at present; the government is not considering drawing in additional resources, he said.

The fund could serve as a guarantee that fiscal policy aiming to keep the general government deficit under 3% of GDP can be carried out, Matolcsy said. (MTI-Econews)