EU recommends more spending on green, digital transition

EU

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European Union leaders urged Hungary to expand public investment for the green and digital transition and for energy security, while being ready to adjust spending "to the evolving situation", in recommendations issued on Monday in the European Semester framework for integrated surveillance and coordination of economic policies across the EU, according to a report by state news wire MTI.

In light of the European Commission's assessment, the Council recommended Hungary take action to ensure that fiscal spending is in line with "an overall neutral policy stance", while taking into account temporary and targeted support for households and businesses most vulnerable to energy price hikes, and to refugees from the war in Ukraine.

It also urged steps to improve the long-term sustainability of the pension system, while preserving adequacy.

The council said Hungary should "swiftly finalize" negotiations on the country's policy documents for utilizing Cohesion Fund resources for 2021-2027.

It pressed Hungary to continue the integration of vulnerable groups on the labor market and to extend the duration of jobless benefits while improving adequacy of social assistance, education outcomes, and access to preventive and primary healthcare services.

Action was recommended to reinforce the anti-corruption framework, by "improving prosecutorial efforts" and "strengthening judicial independence", and to improve "the quality and transparency of the decision-making process" with "effective social dialogue, engagement with other stakeholders, and regular impact assessments".

The council recommended Hungary continue to simplify its tax system, as well as "improve regulatory predictability and competition" in services, and apply competition scrutiny "systematically".

It also pointed to the need to improve competition in public procurement.

The recommendations call for efforts to promote reform and investment in the circular economy, digitalization, and research and innovation.

The recommendations also aim to reduce reliance on fossil fuels by improving energy efficiency and accelerating the deployment of renewables and upgrading electricity infrastructure, while also diversifying imports of fossil fuels by strengthening interconnectors with other countries' energy networks.

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