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Gyurcsány announces comprehensive reform program

The Socialist-Liberal coalition has agreed a comprehensive public-sector reform program aimed at making budget deficit cuts sustainable, Prime Minister Ferenc Gyurcsány said on Saturday.
Gyurcsány said the reforms would incorporate ten basic policies and these would aim to ensure economic balance. The budget deficit will be cut to around 3% of gross domestic product by 2008 and the goal is to stabilise inflation at around the same level after a temporary rise in next year, said the prime minister. The reforms, he suggested, will realign opportunities and responsibilities in Hungarian society.
Announcements of measures to cut the gaping budget deficit, which is expected to hit 8.5% of GDP this year, had concentrated on the revenue side, and Gyurcsány has drawn criticism by foreign investors and the IMF (International Monetary Fund ) for not doing enough to cut spending. At the informal meeting in a government resort complex at lake Balaton, the details of Hungary's fiscal adjustment package were agreed on. Finance Minister János Veres told reporters that the government would cap spending the 2007 budget and three years after that to stop spending from getting out of hand, and a spending review would be required of ministries every quarter.
Gyurcsány announced the schedule of reforms: Education Minister István Hiller will announce details of education reforms next Tuesday. The required amendments will be prepared by the end of August. Decisions on a new law package and pensions will be made by the end of this year. Legal amendments will be approved in 2007 and they can come in force from 2008. The social compensation system, involving gas prices, will be announced next Wednesday. The reform and financing of public transport will be discussed on the following week. Developments under the New Hungary program which makes use of European Union funding will be discussed by the end of July and decisions will be made by the end of September in order to submit these to Brussels in early October. Tenders will be invited early next year. At the next government meeting on 31 August and beginning of September, the convergence program, the first package of the health reform, the experiences drawn from social debate about the National Development Plan, and the new regulations on wages will be discussed.