The need for a 0.9%-of-GDP adjustment to this year’s budget was part of the recommendations drafted and published by the European Commission (EC) on June 2. The Commission document has been finalized since and is the basis for the recommendations adopted by Ecofin, although the rest of the warning of a likely deviation from Hungary’s -1.7%-of-GDP medium-term objective (MTO) – the structural fiscal deficit ratio – as well as of non-compliance with the debt rule from 2014 was left unchanged.
As regards the recommendations concerning the business environment, Varga noted that the rules governing e-public procurement had been accepted. The Commission has also modified its position relating to investment activity, admitting that investment activity is not low in general, but only in certain sectors. The minister said the Commission has also acknowledged that the Hungarian government’s measures related to employment and the support of the jobless are aimed to boost labor market participation.
As for the draft EU budget for 2015 presented by the European Commission, Varga said it is in Hungary’s interest that Ecofin will approve a budget that can ensure disbursement of the funding as scheduled over the entire year 2015. It had happened several times in the previous budgetary period, the minister said, that the Commission was unable to meet member states’ disbursements on time for lack of funds. This also affected the Hungarian budget in the spring so it is important to avoid such disruptions, Varga said.
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