In the area of budgetary policy, the Hungarian Presidency of the Council of the European Union will be responsible for promoting the coordination of economic policies at EU level and preparing the implementation of the reformed Stability Pact, which will come into force in January 2025.
On Tuesday 2 July, at an event organised by the European Savings Banks Group (ESBG) in Brussels, the Hungarian Deputy State Secretary for Finance, Gábor Szőcs, said that his country wanted to contribute to a “smooth transition” to the new rules and to greater compliance with the fiscal rules.
In particular, the Hungarian Presidency will have to facilitate discussions between the Member States on the excessive deficit procedure (EDP) for seven EU countries – Belgium, France, Hungary, Italy, Malta, Poland and Slovakia – which the European Commission should officially initiate this week (see EUROPE 13435/1) ahead of the Ecofin Council on Tuesday 16 July.
On Monday 15 July, echoing the Commission’s socio-economic policy recommendations, the Eurogroup should adopt a declaration on the budgetary policy to be pursued in 2025, while the ‘European Fiscal Board’ is recommending substantial efforts to consolidate public finances in the euro area next year.
Between now and the end of September, the EU27 Member States will be asked to present the Commission with their macro-budgetary plans for a period of between four and seven years, detailing their budgetary trajectory as well as the public investments and reforms they intend to implement. In order to retain some room for discussion with EU countries on these plans, the EU institution will not be submitting its recommendations for adjustment trajectories. These will not be unveiled until the autumn.
Hungary’s budget deficit reached 6.7% in 2023 and should be reduced to 5.4% of GDP in 2024 and 4.5% in 2025. Hungary’s public debt stood at 73.5% of GDP in 2023, and could climb to 74.3% this year before falling back to 73.8% next year.
Aid to Ukraine. In the second half of the year, the Hungarian Presidency will also have the task of steering the discussions of the Member States on the proposal expected from the Commission and the EU High Representative for Foreign Affairs to provide the EU with concrete form for the decision of the G7 countries to grant, from 2025, loans to Ukraine of up to $50 billion, which would be pledged against the profits generated by the assets of the Bank of Russia frozen in the European Union (see EUROPE 13442/1).
The attitude of the Ukrainian authorities will be scrutinised on this issue, which is likely to require a qualified majority of Member States, precisely in order to circumvent the reluctance that countries such as Hungary and Slovakia might show.
Hungary also intends to continue analysing the socio-economic impact on the EU of Russia’s military aggression against Ukraine, and to help speed up the implementation of post-Covid-19 national recovery plans as part of the Next Generation EU recovery plan.
Informal meeting. The Hungarian Presidency will host the informal meeting of European finance ministers and central bankers on Friday 12 and Saturday 13 September in Budapest.
According to Mr Szőcs, the topics on the agenda will include the financing of the climate transition, with contributions from the OECD and the Hungarian Treasury on how to bridge the public financing gap. The effects of demographic change, particularly population ageing, on the sustainability of public debt will also be analysed, with a contribution from the Bruegel think-tank.
In particular, Mr Szőcs stressed the importance that his country wishes to attach to the demographic challenge in all its dimensions, such as “the ageing of the population, the low fertility rate, the sustainability of social security systems, the labour shortage and the desertification of regions”. We want to allocate “adequate” budgetary resources to meet this challenge in the next Multiannual Financial Framework, he added.
For more information on the programme of the Hungarian Presidency of the EU Council: https://aeur.eu/f/cw9 (Original version in French by Mathieu Bion)