HUNGARY PILLORIED AGAIN

Brussels has called on the government again to reduce the high budget deficit.

The European Commission would urge the Hungarian government to implement new measures to reduce the high budget deficit, the financial commissioner of the European Union announced yesterday adding that the Commission will modify its opinion in a negative direction about the Hungarian state budget. In spite of the criticism of Brussels Premier Gyurcsány claims there is no need for restrictions as the state of the budget and government financing does not justify such measures. The council of the finance ministers of the EU countries is expected to recommend new restrictive measures for Hungary as it was announced yesterday by Joaqín Almunia, financial commissioner of the European Union as the economic and financial council in Luxembourg discussed the Hungarian budget problems yesterday.

Almunia has reminded of the decision of the body in July 2004 giving four months for the Hungarian government to reduce the deficit but in January it was stated that no satisfactory measures had been implemented so they gave new recommendations this March. Mr Almunia referred to the report of Eurostat and to the motorway construction expenses to be implied in the Hungarian budget. He said the recommendations expected by October 20 would be more severe. János Veres, Minister of Finance did not take stand in the problem but said the 1.4 pc state budget deficit reduction planned for the next year was the highest possible rate as a greater restriction would hinder the economic growth.

Reacting to the report of the Central Bank stating that the acquisitions of Gripen fighters have not been included in the budget János Veres said he did not know any EU regulations to prescribe the block accounting of military purchases. András Tállai MP (Fidesz) has harshly criticized the fiscal policy of the government saying that it follows momentary interests. The latest report of the Central Office of Statistics says Hungary leads the list of countries burdened with the highest rates of state budget deficit and indebtedness in Eastern and Central Europe while Die Neue Epoche yesterday wrote referring to sources in Brussels that Hungary might lose some of the EU-subsidies because of its high deficit and serious sanctions could be implemented as Hungary is not part of the eurozone.

Translated by Péter Szentmihályi Szabó