President appoints Jarai to Fiscal Council (adds Jarai’s remarks)

Budapest, February 18 (MTI) – Hungary needs to balance its budget and reduce state spending, Zsigmond Jarai, the newly-appointed member of the Fiscal Council said on Friday.

President Pal Schmitt appointed Jarai, former president of the central bank, as the third member of the new Fiscal Council on Friday. Jarai will be responsible for setting the agenda, calling and chairing the Fiscal Council’s meetings.

    Jarai told the press that “the size of the budget in proportion to gross domestic product (GDP) should be reduced and public spending should focus on economic stimulus.”

    He said the Council will be able to operate without its own staff, as it can draw on cooperation with the State Audit Office, the National Economy Ministry and the National Bank of Hungary.

    He added that public spending should be pushed below 46 percent of GDP over the next few years, which will require the implementation of structural reforms.

    Jarai is currently on the supervisory board of the central bank, a post he said he can continue to fulfil while working in the Fiscal Council.

    Parliament passed a law on December 13 which set up a new Fiscal Council with new powers. Its members are the presidents of the National Bank of Hungary and the State Audit Office, and an economist was to be appointed by the president as a third member.

    Effective February 8, Gyorgy Kopits resigned from his post as chairman of the Fiscal Council, established at the end of 2008 as an independent body by the previous government to issue opinions on fiscal policy. Kopits said he resigned due to changes to the Council, which has been stripped of its budget and its entire staff.

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