Economy minister: Brussels undermining Hungary’s debt reduction efforts

Budapest, December 17 (MTI) – Hungary’s efforts to reduce the public debt have been hindered by a protracted dispute with the European Union concerning the accounting of 600 billion forints (EUR 1.9bn) of EU payments, Economy Minister Mihaly Varga said on Thursday.

In the meantime, the government has had to fund projects using its own resources, Varga said in an interview to weekly Figyelo. It looks like Brussels is trying to undermine Hungary’s debt reduction efforts, he added.

The budget deficit is expected to be around 2.2 percent of GDP this year, below the target of 2.4 percent. But in the case of the public debt, “the situation is slightly different”, he added.

“For four years, we have always fulfilled the targets set by the law and will try to do the same this year,” Varga said.

The state is planning to renew in Chinese Renminbi part of the 5-5.5 billion euros FX debt expiring next year, Varga said. What is important is not the amount but the fact that new relations have been established that “could make the financing of state securities safer,” he added.

Also, Varga said real wages would have to rise by 2.5-4.5 percent to support domestic consumption.

In an interview published by Reuters on the same day, Varga said that he saw a good chance for MKB Bank and Budapest Bank to be privatised next year.