Growth must not involve further increase in state debt, says Orban

Budapest, May 25 (MTI) – It would be “life-threatening” for Hungary if economic growth was induced at the cost of increasing debt, Prime Minister Viktor Orban told public radio MR1-Kossuth on Friday morning.

“In the current situation we must answer no to a question if economic growth could entail a higher deficit,” Orban said in the radio interview.

 

The prime minister said that if Hungary’s national debt were as low as that of Bulgaria (standing at 16 percent of GDP) or even Poland (55 percent), further resources to boost the economy could be considered even if they increased the state debt by 5-10 percent.

 

With Hungary’s 77-78 percent debt ratio, which Orban labelled as a “heritage” from governments between 2002-2010, however, such moves would steer the country into a debt-trap. “Growth must not be generated at the cost of further increasing the national debt,” Orban insisted.

 

On another subject, Orban criticised European Union plans to levy direct taxes, and said that the goal is “not to reinforce the bureaucracy or the budget in Brussels but to strengthen the members, their national budgets, revenues, and economies.”

 

Direct taxes collected by the EU would lead to a bureaucratic “United Nations of Europe” against the will of voters, Orban argued.

 

Orban said that the EU’s fiscal pact cannot be replaced by a growth pact.

 

Hungary deserves acclaim for its ability to increase its competitiveness and further reduce the national debt this year and in 2013, Orban said.

 

“The least we should receive is fair treatment and elimination of the earlier, unjust decision on suspending funds,” Orban said.

 

The European Commission decided in March to temporarily suspend cohesion funds directed at Hungary worth of 495 million euros due to the country’s successive failure to meet its 3 percent deficit target.



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