Brussels, 12/04/2011 (Agence Europe) - On Monday 12 April, the European Commission welcomed the series of structural reforms announced by Hungary as part of its “Széll Kálmán Plan”, named after a Hungarian prime minister in the early 20th century who slashed the public deficit. “I am pleased that Hungary is embarking on a strategy to consolidate public finances and to boost employment”, said EU Economic and Monetary Affairs Commissioner Olli Rehn in a press release, adding: “I trust that the authorities will be ready to take additional measures should this not be the case already. Care needs to be taken to provide a stable and credible environment for both domestic and international investors.” This was a veiled criticism of the financial services tax introduced in Hungary in 2010.
The Hungarian finance minister, György Matolcsy, said at the ECOFIN Council at the weekend that he would be recommending that Hungary turns the one billion euro-strong permanent mechanism into a National Stability Fund. In their most recent fact-finding mission, the Commission and IMF noted that growth reached 1.2% in Hungary in 2010, higher than expected. This year, growth may well double and unemployment start to fall. The Széll Kálmán Plan includes cuts in social spending, pensions, the local civil service and transport. The Commission will examine how the plan affects Hungary's public deficit for 2011, as part of its assessment of Hungary's stability and growth plan and economic reform programme, which are both expected at the end of the month. It will do the same with regard to Hungary's spring economic forecasts, expected to be published on Friday 13 May. Hungary has used €5.5bn of the €6.5bn it was granted by the EU in 2008 as part of an international aid package of up to €25bn. (M.B./transl.fl)