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Govt aware of budget risks, will keep deficit target – Szijjártó

There are risks to the 2012 budget because of the global economic situation but these prompt no further measures at present. The government will respond if conditions materially change, and will keep to the 2.5%-of-GDP deficit goal, Prime Minister's spokesman Péter Szijjártó said on Wednesday morning.

The government has included very big reserves into the budget, the spokesman said on the commercial television channel TV2, adding that funding is secured for every 2011 additional expenditure item.

Fiscal Council president Zsigmond Járai was right when said that the government has to watch international developments closely, Szijjártó said, noting that both Járai and Audit Office president László Domokos, also a member of the three-member Fiscal Council, warned of the risks.

The government is aware of the risks and has been continuously assessing them, and will have a response if the environment or the exchange rate varies materially from those at present, he said. It has prepared plans for alternative scenarios, he said.

The cabinet will do everything in its power to reduce state debt and thereby stabilise the fiscal deficit at a low level.

It is in the country's best interest to keep the 2012 general government deficit at 2.5% of GDP as planned, and "we will keep it there".

Szijjártó said that National Bank of Hungary governor András Simor, the third Fiscal Council member represented a "politically motivated" opinion on the council on next year's budget plan, adding he "has the right to do so".

The Fiscal Council had accepted as achievable the budget plan with a vote of 2:1 (with Simor against), and "we will carry it out".

The Hungarian government will use every means at its disposal to prevent EU tax harmonization, Szijjártó said, adding that the country has a big competitive advantage because of its low taxes.

As to the problems of FX mortgages, the government intends to secure every Hungarian family a way out of FX mortgages, the spokesman said. They are watching the developments and will take further measures if see the need or trace signs of unfair bank behavior hindering the early repayment scheme.