Are you sure?

OECD urges reforms, state job cuts after vote

Hungary's new government after April elections will need sweeping reforms including slashing the number of state employees to reduce budget risks and foster economic growth, a top OECD official said.

The center-right opposition party Fidesz, which is expected to win elections next month, has not yet clarified what reforms are on its agenda. Aart de Geus, Deputy Secretary-General of the Organisation for Economic Cooperation and Development, told the Figyelő weekly that Hungary needed structural reforms to return to sustainable growth from a deep recession.

A Reuters pre-election poll of analysts showed last month that reform of local government, education and the tax system were seen as the most important issues. A delay in reforms and heavy state overspending in 2002-2006 boosted debt and made Hungary vulnerable during the global crisis.

It became the first European Union member in 2008 to turn to the International Monetary Fund for aid. Geus said an increase in the pension age and tax changes to reduce the cost of low-income workers to employers, both implemented since last year, had been measures in the right direction.

Without reforms, Hungary may soon be unable to finance its healthcare system, Geus added. (Reuters)