Govt prepared for excessive deficit procedure, fights for cohesion funds – paper

Budapest, October 27 (MTI) – The government is prepared for a scenario where the European Commission does not lift an excessive deficit procedure against Hungary, but will run a tough lobby so that it can still access cohesion funding, the daily Magyar Nemzet said on Saturday.

Brussels has complaints about a token sum – less than 0.1 percent – of key figures in the 2013 budget, which corresponds to about 10-20 billion forints (EUR 35-71m). However, even regarding this “easy-to-solve” problem, Brussels threatens to freeze Hungary’s cohesion funding, the paper said, citing sources close to the government.

 

The government expects the Commission to disregard certain factors, such as the potentially benign effects of a deal Hungary wants to seal with the International Monetary Fund (IMF). It could also bring down economic growth forecasts, which could lead to a model where Hungary’s budget deficit – to a small extent – crawls above 3 percent of gross domestic product (GDP), the paper said, citing the unnamed government source.

 

The EC will publish on November 7 a forecast on financial-economic indicators of member states in 2013. This document is expected to criticise Hungary and to uphold the excessive deficit procedure against it or even suggest freezing cohesion funding, the paper said.

 

Both decisions – on the excessive deficit procedure and cohesion funding – will be made at an Ecofin meeting of EU finance ministers on December 4. Hungary expects a favourable decision regarding the cohesion funds, on which Germany had indicated its support, the paper said.








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