ADVERTISEMENT

EC: Further fiscal efforts likely needed for Hungary to avoid relaunch of EDP

EU

Hungary should most probably has to take further fiscal consolidation efforts so as to avoid the re-opening of an excessive deficit procedure (EDP), because of slow debt reduction, in spring 2015, the European Commmission (EC) reported yesterday.

"In particular, compliance with the debt reduction benchmark would likely require additional fiscal consolidation efforts, in order to avoid that an inadequate pace of debt reduction could trigger the re-opening of an excessive deficit procedure in spring 2015," the Commission said.

The EC statement is part of memo prepared after the visit between June 24-27 of an EC mission to Hungary to review recent economic developments and policy initiatives in the context of post-programme surveillance linked to EU balance of payments assistance provided between 2008 and 2010.

Except for the reference of the risk of reopening the EDP against Hungary, closed just a year earlier, the warning as well as most of the remarks made in the memo are much in line with the 2014 country-specific recommendations endorsed by the European Council on 27 June.

The EC welcomed the recent economic pickup, as newly installed car industry capacities are boosting exports and industrial output and domestic demand strengthened.

It warned, however, that the economic recovery largely depends on stimulus measures (the central bank's Funding for Growth Scheme, cuts in regulated utility prices, the expansion of the public work scheme and the increased absorption of EU funds), and growth could slow as these effects fade away.

ADVERTISEMENT

Czech economic confidence weakens in November Analysis

Czech economic confidence weakens in November

Lawmakers approve residency permit for digital nomads Parliament

Lawmakers approve residency permit for digital nomads

The strongest move - Morgan Stanley Hungary head and Chess F... Podcasts

The strongest move - Morgan Stanley Hungary head and Chess F...

New Jewish cultural hub opens in Budapest City

New Jewish cultural hub opens in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.