European Union governments will declare Hungary at “high risk” of missing its budget goals and will give the country until April 10 to take measures to pare its deficit, according to a draft ruling obtained by Bloomberg.
”Hungary appears to be at high risk with regard to the sustainability of public finances,” the draft document said. Deficit-cutting measures should be taken in a “timely” manner “to ensure the strict implementation of the planned major deficit reduction in 2007,” according to the draft ruling to be discussed by finance ministers next week.
Hungary's deficit is estimated to be 10.1% of GDP this year, the highest in the EU. The government aims to bring the budget shortfall to 6.8% of GDP next year and to 3.2% by 2009. If the government fails to meet its deficit target by the deadline, it risks losing EU funds or being subject to penalties.