Hungary to step up efforts to cut public debt, says PM

Hungary's government wants to reduce the country's public debt to 70% of gross domestic product in 2012 and have a debt margin closer to 60% than to 70% of GDP by the end of his term in 2014, Prime Minister Viktor Orbán told public radio MR1-Kossuth on Wednesday

Orbán said he planned to announce measures to cut the public debt by a few%age points within a week. The cut will be financed from funds freed as a result of changes to the pension system, he added.

He said there were only two European countries in a position to cut their public debt: Sweden and Hungary; the others were increasing their debt, some to dangerous levels.

"Hungary will beat the crisis, of that there is no doubt," Orbán said.

He said Europe's economy was in grave trouble and there would be no quick exit to the crisis, adding that a "serious economic crisis" could last between 8 and 10 years in the bloc.

The prime minister added that the government had reacted to the European economic crisis by speeding up the country's transformation. He said within a week he would propose to the cabinet and the ruling Fidesz-Christian Democrat alliance to accelerate plans for Hungary's renewal, including education, health care, local councils and the system of economic supports.

"We won't allow a single forint to be wasted, or a single unnecessary spending item, and not a single person will be allowed to work needlessly in the state because the country cannot afford it now," he said.

Orbán said his government would not implement any austerity measures.

The prime minister said that Hungary's economic growth rate was faster than the European average and compared to the negative trend of a couple of years ago.

He said growth in Hungary was now on the right track, and insisted that "instead of growth of 2%, we'd like to see 3-5%."

Orbán told the radio program that lots of households in Hungary now had more money in their pockets than a year ago. In response to a question about low consumption, he said it was not up to the government to tell families whether to spend their money or not.

"I rather tend to think that if people now save more than before then this gives the chance for money to play a role in some way in the state finances ... for example people could directly buy government bonds ..." he said.

Orbán said one of the most important issues this autumn would be how to divide financial losses, and that banks should share in any losses made by households with mortgages suffering from the current adverse exchange rate.