04/06/2010 PM s spokesman reaffirms "Hungary close to Greece" statement (adds further comments)
<p>PM s spokesman reaffirms "Hungary close to Greece" statement (adds further comments)</p>
On Thursday, Lajos Kosa, the party s deputy leader, said that Hungary was close to bankruptcy, triggering a sharp fall in the forint and default insurance spreads on Hungary s outstanding sovereign debt.
Kosa said at a conference in Debrecen in eastern Hungary on Thursday that the government s main job now was to avoid bankruptcy.
The default spreads again widened on Friday and the forint sank to a year-low at around midday.
Szijjarto said that former Socialist Prime Minister Ferenc Gyurcsany had "proudly" spoken about the prospect of defaulting a year and a half ago. He added that in this light, Kosa s comments had not been at all exaggerated.
Szijjarto said the government was determined to press ahead with tax cuts: asked if it was possible that tax cuts would be delayed after the results of a fact-finding commission were revealed, Szijjarto said "no".
He added that the Fidesz government s predecessor had falsified economic data just as the Greeks did. The moment of truth has already come in Greece, but it is yet to come for Hungary, he added.
The Hungarian government, however, is prepared to evade the road Greece had embarked on. After the real state of the economy is acknowledged, it will not hesitate, but will present an action plan, he said.
In economic terms, the European Union speaks about two priorities: taking short-term measures to restore balance and long-term ones to guarantee competitiveness. "The best thing a government can do is to take the two simultaneously. Due to its broad-scale authorisation, the Hungarian government has an extraordinary edge in this aspect," the spokesman said.
The concrete measures will be determined on the basis of the conclusions of the fact-finding commission, he said, adding that the priorities had been identified: tax cuts, simplification of taxation, boosting growth, improving competitiveness and curtailing red tape.
Szijjarto confirmed that the new government would negotiate with the International Monetary Fund.
Imre Szekeres, deputy leader of the opposition Socialists, on Friday called upon the government to stop speaking about "skeletons in the closet", ones Fidesz claims to have been inherited from the previous government.
The foreign markets and investors are paying keen attention to the statements by Hungarian political leaders, Szekeres said, attributing the recent withdrawal of foreign capital from the country to Kosa s statement.
"The forint started to plunge shortly after Kosa s remarks," he said, noting that the Hungarian currency produced the sharpest drop within a day on the world market on Thursday.