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Employers accept updated euro plan, employees reject it

Employer representatives approved Hungary's updated convergence plan while employee delegates rejected it at a meeting of the interest coordinating council (OÉT) on Monday, two days before the program is due for submission to Brussels.

The updated version of the plan contains minor changes to the version presented to the EU in September, showing larger spending cuts, lower state debt and lower revenues, mainly due to changes in the gross domestic product figure and the forint-euro exchange rate since September.
Employer representatives said they supported the plan for aiming to cut the high budget deficit and achieve stability. Employee representatives argued that the aims of the convergence plan would broaden the social gap between older EU states and Hungary.
State secretary at the Finance Ministry Álmos Kovács said if, like in Ireland and Sweden, the budget deficit could be cut with austerity measures, this would eventually lead to significant improvements in economic output, interest rates and lower inflation. He noted that the budget deficit was high partly because of infrastructure investments such as motorway building over the past few years.