Hungarian Prime Minister Ferenc Gyurcsány pledged that economic changes designed to reduce the budget deficit, the European Union's largest, and secure his country's adoption of the euro would be sustainable. The government plans to cut the budget deficit to near the 3% limit needed for euro adoption by 2008, from a revised target of 8% this year. Gyurcsány is raising taxes, increasing regulated prices and cutting government jobs to narrow the shortfall after five consecutive years of overruns. “We must make sure the emphasis of sustainability prevails, because everything else will be endangered otherwise,'' Gyurcsány told an assembly of his Socialist Party today. “Whatever we do must strengthen and not weaken the financial and economic foundations.'' He urged regional Socialist representatives at today's meeting to push through the budget cuts and planned overhauls in education, healthcare and public administration, even if the party's popularity, and living standards, decline. “Hungary will understand very quickly, that what the political left is doing is not self-serving, but is in the interest of a better country,'' Gyurcsány told the meeting. “We don't want to be the poor relatives in the EU any more. We have to go through this overhaul, even if it's uncomfortable.'' The government plans to cut the budget deficit by Ft 350 billion ($1.6 billion) this year to reach the revised deficit target and a further Ft 1 trillion in each of the next two years. Gyurcsány in a June 28 interview reiterated that he wants to meet euro adoption terms by 2008. The prime minister is ending price subsidies for drugs and natural gas and applying “hard ceilings'' in the budget to avoid more deficit overruns. Ministries will have to set aside reserves to safeguard against overspending and will have to account for their finances quarterly.
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