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Government reaches preliminary agreement on budget

The government has reached a preliminary agreement with the leadership of the Hungarian Socialist Party (MSZP) parliamentary group and MSZP mayors regarding the HUF 120 billion (€446.4 million) reduction in local-council subsidies contained in the proposed 2010 budget, MTI learned on Thursday evening.

According to Thursday's preliminary agreement, HUF 50 billion of the cuts in 2010 funding for local councils would stem from the elimination of projects financed exclusively from domestic resources.

The proposed cuts in 2010 local-council funding would not affect government co-financing for European Union-funded projects.

The government has provided the International Monetary Fund (IMF) with a declaration of intent to reduce local-council funding by HUF 120 billion and public-transportation funding by HUF 40 billion in 2010.

MTI has learned that Thursday's preliminary agreement calls for the government to discontinue financing the operating losses and capital loss of state-owned railway MAV.

Thursday's agreement between the government and MSZP officials stipulates that 2010 funding for healthcare will remain at its current level.

Prime Minister Gordon Bajnai will conduct negotiations regarding the government's proposed 2010 budget with leaders and members of the MSZP parliamentary group on Saturday and Monday, respectively.

The government will hold an extraordinary cabinet meeting on September 1 to discuss the budget. The government plans to submit its proposed 2010 budget to parliament on September 11.

Hungarian Socialist Party parliamentary deputy László Keller, who is a member of the MSZP's budgetary working-group, told MTI on Thursday that the global economic crisis has reduced government revenue by HUF 1,175 billion as compared to that projected in the provisional 2010 budget formulated last September. (MTI-ECONEWS)