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Ecofin approves extension deficit procedure deadline

EU finance ministers approved a recommendation by the European Commission to extend the deadline for Hungary to bring its general government deficit under 3% of GDP by two years to 2011.

The Commission made the recommendation for the change to the deadline, which is part of an excessive deficit procedure started five years ago, in light of the effects of the global economic crisis on Hungary.

The country cut its deficit to 3.4% of GDP in 2008 from over 9% two years earlier. The government had earlier expected to bring the deficit under 3% of GDP in 2009, but raised its projection to 3.9% of GDP because of the effects of the economic crisis. The government sees the deficit falling slightly to 3.8% in 2010.

The EU considers it important for Hungary to take the necessary consolidation measures, to carry out reforms of local government, to improve national oversight of the budget and to continue to progress toward its mid-term goal of making sustainable reductions to the deficit.

Ecofin approved the recommendation more or less without debate. It also approved recommendations to extend deadlines in excessive deficit procedures against Poland, Latvia, Romania and Lithuania and Malta. (MTI-ECONEWS)