Brussels, 07/06/2010 (Agence Europe) - Comments on the fiscal situation in Hungary are exaggerated and any comparison with the situation of Greece unhelpful, said European Economic and Monetary Affairs Commissioner Olli Rehn on Saturday 5 June. At the end of last week, alarmist remarks by some close to Hungarian Prime Minister Viktor Orban worried the markets and brought a fall in the value of the Hungarian currency. Among the comments made were that the deficit could be as high as 7 or 7.5% and that Hungary was in comparable situation to that of Greece. “We do not consider comments such as the recent comparisons between Hungary and Greece helpful,” Rehn said on the sidelines of the G20 financial ministers' meeting in Busan,
South Korea.
This kind of comment, the Commissioner said, was misleading. “Talk of a risk of debt default in Hungary's case is exaggerated. Hungary has made serious progress in consolidating its public finances,” said Rehn, pointing out that the deficit had been reduced by over 5% of GDP between 2006 and 2009. He went on, “I have full confidence that Hungary will continue along the path of sustainable growth on which she has already embarked”.
According to the latest economic forecasts from the Commission, the Hungarian deficit is expected to be 4.1% in 2010 (Council recommendations prescribe a return to below 3% by the end of 2011). During the weekend, the Hungarian authorities tried to pour oil on the troubled waters, giving assurances that that they were sticking to the deficit target of a 3.8% of GDP for this year (the previous Socialist government agreed this figure was with the EU and the IMF). The economy minister acknowledged that measures were required to reduce spending, while at the same time repeating the government's intention to cut taxes. The Hungarian central bank is predicting a public deficit of 4.2-4.3%, which is up slightly, but far below the alarmist pronouncements from some members of the ruling Fidesz party. (A.B./transl.rt)