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Almunia credits Hungary's efforts to cut deficit

Hungary's government has made a “credible'' commitment to cut its budget deficit, European Union Monetary Affairs Commissioner Joaquin Almunia said in an interview with weekly Figyelő. “This is the first time I can declare that the Hungarian government approved a strict and serious strategy and measures to reduce the excessive budget deficit,'' Figyelő said, citing Almunia. The EU needs further information about the government's cost- cutting measures to evaluate their overall effect on the budget, said Almunia. The commissioner warned Finance Minister János Veres about the importance of the balance between spending cuts and raising revenue, he told Figyelő. The commissioner declined to say whether Hungary may be able to adopt the euro in 2010, saying he lacked further information about the planned measures.
The currency is rising as the government's credibility increases by abandoning a target date the market had already questioned. A survey of 14 economists by Bloomberg this month said the date may have to be pushed back to 2013. The euro-adoption plan should be “a program that is transparent and enhances the credibility of the Hungarian budgetary and structural reform process,” EU Monetary Almunia said in a July 25 e-mail statement. Estonia and Latvia, both former Soviet Baltic states, gave up their plans to adopt the euro this and next year because of accelerating inflation. Neighboring Lithuania's application to join the euro region was rejected because it also failed to curb an increase in consumer prices. (Figyelő, Bloomberg)