Commissie beoordeelt Hongaarse actie om begrotingstekort voor 2009 te verhelpen (en)

"Hungary has undertaken considerable fiscal consolidation steps since mid-2006, thereby limiting the fiscal deterioration in 2006 and securing a significant reduction in 2007. Nevertheless, there remain significant risks to correcting the excessive deficit by 2009. Building on the better-than-targeted budgetary outcome in 2006, the consolidation efforts will therefore need to be sustained, particularly on the expenditure side, and structural reforms will have to be further elaborated and implemented", said Economic and Monetary Affairs Commissioner Joaquín Almunia .

Hungary has been under the excessive deficit procedure since 2004. On 10 October 2006, the Council adopted a third recommendation under Article 104(7) of the Treaty that Hungary should promptly correct its excessive deficit after it failed to comply with the first two. It also extended the deadline by one year to 2009. It specifically urged Hungary to reduce the deficit in a credible and sustainable manner, namely by limiting the fiscal deterioration in 2006 and significantly reducing the structural deficit already in 2007, and to bring the debt ratio onto a firm downward trajectory. Hungary was also invited to move swiftly forward with its planned structural reforms and to improve budgetary control. On 26 April 2007, Hungary submitted a progress report outlining the budgetary and economic developments and action taken in response to the October Council recommendations.

In a Communication to the Council adopted today to assess compliance with the Council recommendation six months after its adoption, the Commission considers that the action taken by Hungary represents adequate progress towards the correction of the excessive deficit by 2009. In particular, Hungary (i) adopted a set of fiscal corrective measures in June 2006 which enabled it to outperform the deficit target for 2006 by almost 1% of GDP although the deficit is still very high at 9.2% of GDP; (ii) is now on track to reach the 2007 headline deficit target of 6.8% of GDP; (iii) has implemented various structural reform steps in the areas of public administration, health care, education and pensions; (iv) has taken initial steps to enhance the budgetary framework.

As a result, the Commission considers that no further steps under the excessive deficit procedure are necessary at present. At the same time, it stresses that a better outcome in 2007 than currently envisaged is both feasible and desirable given the 2006 results. Moreover it underlines that the correction of the excessive deficit by the 2009 deadline is still subject to risks and crucially hinges upon the further development and implementation of the structural reform plans and on the reinforcement of the budgetary framework. The Commission will therefore continue to monitor the situation in Hungary closely, on the basis amongst other things of twice-yearly progress reports by the Hungarian authorities.

The Commission's communication to the Council is available at:

http://ec.europa.eu/economy_finance/about/activities/sgp/edp/edphu_en.htm

The following table compares the budgetary targets and macroeconomic projections contained in the progress report of 26 April 2007 with the December 2006 update of the convergence programme and the Commission's spring economic forecasts of 7 May 2007.

Comparison of key macroeconomic and budgetary projections