Orban calls for EU stance on further adjustments Hungary should make

Brussels, October 19 (MTI) – The European Union should make it clear what further reductions it requires in Hungary’s budget deficit to lift the excessive deficit procedure against the country, Prime Minister Viktor Orban said in Brussels on Friday.

Speaking after a two-day meeting of his European counterparts, Orban said that he had received the EU’s response to his government’s latest package of fiscal measures, which, according to Brussels, “nearly met” the EU’s requirements.


The prime minister, therefore, asked the EU to paraphrase its requests in nominal terms, and insisted that “whatever we do, it is not enough (for Brussels)”. According to Brussels, “in a static view Hungary’s expected deficit figures are below the required limit, but there are doubts if viewed dynamically,” he added.


Experts assume that though some of Hungary’s planned measures will help reduce the deficit, they will also hamper growth to some extent, and those negative impacts may make the final results seem less convincing for the European Commission.


Orban noted that now even the National Bank of Hungary sees next year’s deficit below 3 percent of GDP.


“That is why we request the European Union to indicate how much is missing. No matter how much they say, we will raise that amount” whether through raising the banking tax, the tax on utility assets, the energy tax, or we will introduce a new tax on online gambling, Orban said. He added that the adjustment required was not likely to be large.


On the subject of a banking union in the euro zone, Orban said that Hungary must avoid getting into an undeserving situation.


“We are not a member of the greatly troubled euro zone, but it is in our interest that their problems are resolved,” he said. Its decision will nevertheless have an impact on Hungary, which is not indifferent to “how they solve their own crisis,” Orban said.


Hungary, in agreement with its Visegrad Four partners, insisted that the measures creating the banking union should not be taken outside the EU’s institutional system, should not hit the non-euro countries and should not endanger the integrity of the single market, he said.


The rules of the banking union should only pertain to its members while the non-euro zone countries should be allowed to freely decide whether or not they want to join the banking union, Orban said.


“For those who wish to join, rights should be balanced against obligations,” he said.


Should the euro zone members decide to set up a “special financial bastion” to save their banking system, a similar institution should be established for the non-euro countries as well, he said.


Orban said he shared the German position that the quality of the planned union must not be compromised through efforts to create it fast.


The two-day EU summit has given a chance for the leaders of member states to make clear that, in order to save the euro, they must take their summer statement about banking, budgetary and political integration seriously, Orban said.


“The [European economy’s] situation, though easier than in June, is still fragile,” he said.


Participants in the summit had touched upon ties with China, Orban said. Hungary but follows other member states in that area; all other members preceded Hungary in opening to that country, he insisted. Hungary sees an opportunity rather than a threat in an emerging China, Orban added.

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