The European Commission on Wednesday said Hungary had taken effective action to correct its budget deficit, but added the country needs to take additional measures to bring the gap below 3 percent of gross domestic product by the 2011 deadline.
“The Commission has concluded that the authorities have acted in compliance with the most recent recommendations issued by the Council in July 2009. In particular, Hungary has respected the 2009 deficit target of 3.9 percent of GDP … It has also adopted a central government 2010 budget in line with the deficit target of 3.8 percent of GDP,” the Commission said.
“However, there are considerable risks attached to the 2010 deficit target, both on the revenue and the expenditure side,” the Commission added.
The Commission made recommendations to Hungary to correct its budget deficit in July 2009. It said it would continue to closely monitor budgetary developments in Hungary.
“Hungary and Latvia, which are benefitting from conditional balance-of-payments support, seem on track to bring their deficits to below 3pc by the agreed deadlines but they need to pursue their efforts to ensure this really happens,” Economic and Monetary Affairs Commissioner Joaquin Almunia said.
Eniko Gyori, MEP for main opposition Fidesz, said in a statement on Wednesday evening that the Commission’s remarks regarding the risks inherent in Hungary’s 2010 budget both on the revenue and spending side were in line with the concerns raised earlier by Fidesz and 29 economists.
“The European Commission’s concerns regarding the (2010) budget are a serious warning for Hungary,” Gyori said.