Hungary's next government will do all it can to keep the deficit from growing over an unacceptable level, Varga said. This level has to be decided in ongoing talks with IMF and EU officials, he added.
The IMF and EU are carrying out regular reviews of Hungary to check on its progress fulfilling conditions attached to a €20 billion financial support package the country received after its bond markets locked up in the autumn of 2008.
Hungary's deficit is in a favorable position considering the average gap for EU countries is about 7.5% of GDP, Varga said.
The next government's most important goals will be to create workplaces, and it wants to win the IMF's support for this, he said. Exactly how big the deficit is in 2010 or 2011 is secondary, he added.
During four years 400,000 new jobs can be created, Varga said.
“If they get a detailed three-year plan, I think every international organization will offer their support,” Varga said.
Speaking about Hungary's system of local governments, Varga said tensions would build to such a degree by June that the next government will have to take quick measures to re-establish the conditions for municipalities to operate. The budget will ensure the country can be financed only until the spring, at which time debts of hospitals alone will reach more than HUF 100 billion, Varga said.
Tax cuts can be made only if they create new jobs, which would mean possible reductions to the corporate tax and payroll contributions, Varga said. Companies should get a bigger reduction in their local business tax if they make investments than the current preference, he added.
From the point of view of economic development, there is good reason to establish an economy superministry, Varga said. (MTI – Econews)