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Hungary: Govt to propose payroll tax reductions at Thursday summit – memo

  The government will propose a reduction of payroll taxes and measures to combat corruption, a memo that the prime minister sent to scheduled participants in Thursday’s economic summit reveals. The government expects a lengthy recession according to the document acquired by MTI.


The government plans to give special attention to the management of four problems, the memo says, naming dealing with the decline of financial resources, offsetting the shrinking of export markets, moderating the rise in unemployment and boosting competitiveness as priorities.

The memo states that with signing the $25.1 billion stand-by loan with IMF, the World Bank and the European Commission, Hungary has passed through the most difficult part of the crisis, though the government is nonetheless expecting a lengthy recession that will require crisis management and preparing a strategy to boost the economy in 2009.

The memo states that the government plans an economic package which would generate resources worth HUF 1,000 billion over the next two years. The government earlier had designed a package for micro-enterprises and SMEs generating HUF 800 billion in support, loans, guarantees, etc. to moderate their problems stemming from narrowing credit sources and export markets. This package would be complemented by reorganizing sources from the New Hungary Development Plan for economic development and to retain jobs, the memo said. (MTI-Eco)