March 3rd, 2013

Incoming economy minister Varga says no need for further budget adjustments

There is no need to adjust Hungary’s 2013 budget for the time being, incoming national economy minister Mihaly Varga said.

Speaking on Hungarian public television late on Friday, Varga said that nothing suggests a necessity for any change, and since only two months of the year have passed “it would be rather strange” if the government changed budget figures. He added that an evaluation of the budget was scheduled in three months’ time.

Varga said that in light of the European Commission’s forecast suggesting that Hungary could not keep its budget deficit under 3 percent of GDP it might be necessary to propose an alternative course so that the European body lifts its excessive deficit procedure against the country. He added, however, that he had a “faint hope” that the commission’s figures were not final, and that an improvement in economic trends might help the country get rid of the procedure without any additional measures.

Varga said that his first foreign visit as economy minister will be made to Germany, Hungary’s most important business partner.

Commenting on allegations in the press that the Economy Ministry might be split into two organisations, Varga said that no such reorganisation was planned. “It would be a waste of time,” he said.

The incoming minister said that banks could largely contribute to economic growth and that he would seek ways to ensure certain benefits to banks in return for increased corporate lending.

Concerning the government’s relationship with the National Bank, Varga advocated cooperation for the same objectives. He referred to the last two years of the first Fidesz government between 1998-2002, when harmonious relations between the two contributed to an economic growth above 6 percent.

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