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No alternative to fiscal adjustments in convergence plan, says Almunia

There is no alternative to the fiscal adjustments included in Hungary's euro convergence plan, Commissioner for Economic and Monetary Affairs Joaquin Almunia said in an interview to Hungarian public televison late on Tuesday. Speaking after the European Commission's decision to approve Hungary's updated convergence plan on Tuesday, Almunia said only slight adjustments to the current plan were conceivable and an offsetting measure must be added for any revenue-generating item removed. The plan was ambitious and the EC believed the figures it contained were real, Almunia said, adding that more details on the planned reforms were expected to be sent to Brussels soon. He added that although the current political climate in Hungary was not the best for seeing through tough reforms, the three years set in the plan for pushing down the country's public finance deficit from this year's 10.1% of GDP to around 3% could be enough. "It will be very difficult but not impossible", Almunia said. He noted that the no one would believe the government any more if they postponed again the date of reaching the fiscal deficit limit. The Commission approved Hungary's revised convergence program on Tuesday, and recommended the Council of Finance Ministers to extend the deadline until which Hungary is to reduce its deficit to EU-required levels (3% of GDP) from 2008, to 2009. The Hungarian government should take all the necessary measures to meet this new deadline and ensure a permanent correction within a comprehensive reform strategy, the Commission said. (Mti-Eco)