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Varga Warns of EC Overstep in Matters of Nat'l Fiscal Policy

EU

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Finance Minister Mihály Varga said the European Commission aimed to expand its legal scope of power to intervene in member states' fiscal policy and voiced Hungary's opposition to any proposals that would "undermine" national sovereignty and "excessively" expand the competence of the European Union's executive ahead of an informal meeting of his EU peers in Santiago de Compostela, Spain, on Friday, according to a report by state news wire MTI.

In a statement issued by his ministry, Varga said Brussels' intent to determine the kind of solutions member states should adopt to reduce their budget deficits was "unacceptable". Member states are in agreement on the need to address the challenges resulting from high state debt levels and budget deficits, but not on the way to address those challenges, he added.

"Member states' budgets need to be determined on the basis of national interests, by national governments, not by the bureaucrats in Brussels," Varga said.

"[Hungary's] government agrees on the need for fiscal discipline but rejects austerity," he added.

He noted that Hungary had continuously reduced its budget deficit and state debt levels, in spite of the fiscal burdens of the war and sanctions policies. "Credit rating agencies have also affirmed this in their latest decisions," he added.

Varga noted that the "interaction of fiscal and monetary policy" was on the agenda of the Ecofin meeting on Friday. "During wartime, the value of an effective cooperation between fiscal and monetary policy has appreciated, and the government and central bank are working in tandem to thrash inflation," he added.

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