The Hungarian government plans to submit to Parliament a restructuring program for the country before March 15, Prime Minister Viktor Orbán said in a speech opening the spring session of Parliament on Monday.
Without going into details, Orbán reiterated that the government would focus on the double task of reducing government debt and unemployment at the same time. This should be done without asking sacrifices from those who bore the burden in the past eight years of the Socialist-led governments, the Prime Minister said referring to the "crisis" taxes levied on some economic sectors last year.
There is a need for constitutional guarantees to defend the interests of the Hungarian economy and "prevent a disruption of the economy as it has happened in the past years", he said. Orbán said that the state debt ceiling should be included in the new constitution.
The government will keep its promise to see that nobody is worse off because of the new 16% flat-rate personal income tax that was introduced from the start of 2011 and eliminated several tax preferences.
Orbán said action groups will be set up to check whether or not private sector companies abide by an agreement on the guaranteed minimum wage reached at a meeting of the National Interest Coordination Council late in 2010.
At the meeting, unions insisted a clause be added to the agreement promising employees' "real position" would remain unchanged in light of changes to taxes and contributions. Orbán noted that the government took steps to top up wages for public sector workers who would have taken home less because of the tax changes and had mandated similar steps at majority state-owned companies.
According to analysts, Orbán’s speech has somewhat disappointed the international markets eager for details of the awaited structural reforms, promised to be finalized by February 28. "The market has, again, built up its hopes and was expecting an announcement of concrete measures. It now seems more and more obvious that we'll have to wait until March until the measures are presented to the public, which is a bit of a letdown," György Barta, analyst at CIB Bank told Reuters. (BBJ)