Prime Minister Ferenc Gyurcsany presented a 12-point action package at talks on how best to weather the global financial crisis, in parliament on Friday afternoon.
The cabinet will guarantee all bank deposits, postpone the New Ownership privatisation project and lower budget deficit targets for 2008 and 2009 as part of a 12-point plan to mitigate the knock-on effects of the global financial crisis, Prime Minister Ferenc Gyurcsány announced on Friday.
Speaking after meeting with the caucus leaders of all parliamentary parties, as well as National Bank governor András Simor, Finance Minister János Veres, and Economy Minister Gordon Bajnai, Gyurcsány proposed the postponement of tax cuts for 2009 in order to help reduce the deficit. The cabinet wants to reduce this year’s shortfall from 4% of GDP to 3.4% and will lower next year’s deficit target from 3.2% to 2.9%. The Prime Minister also recommends a freeze on real wages until next July, and greater powers for the financial supervisory Pszáf.
The New Ownership plan would have seen the privatisation of state electricity works MVM, electricity switchboard Mavir, state motorway manager ÁAK and the state gaming company Szerencsejáték.
Parliament is to vote on the bank deposit guarantee today.
Fidesz caucus leader Tibor Navracsics said his party will initiate the revocation of the budget and tax bills and calls for new proposals aimed at revitalising economic growth and tax reductions. In addition, Fidesz expects the cabinet to guarantee the safety of savings, urges the abolition of “luxury state spending,” and wants action to tighten the financial supervisory system. The party does not favour the postponement of tax cuts.
The Free Democrats’ János Kóka said his party will not come up with any tax proposal that would jeopardise the budget stability. Károly Herényi of the Democratic Forum said the budget revenues are not clear enough in the action plan, while Christian Democrat Zsolt Semjén disagreed with the freezing on real wages.
In an interview with Saturday’s Népszabadság, Gyurcsány said the cabinet and the National Bank will act immediately to protect the interests of Hungarians.