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Excessive deficit procedure abrogated for Hungary

June 21, 2013

European Union finance ministers (Ecofin) decided on Friday to endorse the European Commission’s recommendation made on 29 May to abrogate the excessive deficit procedure (EDP) for Hungary. The country has been in the EU’s fiscal cuffs since its accession to the bloc in 2004.

The Council has announced that it has closed excessive deficit procedures for Italy, Latvia, Lithuania, Hungary and Romania, confirming that they have reduced their deficits below 3% of GDP, the EU's reference value for government deficits.

The Hungarian government, which has used unconventional methods to reduce the budget deficit welcomed the decision but Economy Minister Mihály Varga said the government cannot agree with some of the Council’s country specific recommendations made back in May. The disputed recommendations are those on the energy tax and on taxation in general, as well as on the judiciary system.
The Council made seven country specific recommendations for the country on 29 May, such as ensuring a stable, more balanced and predictable corporate tax system, broadening the powers of the Fiscal Council, lowering the extra burden on the financial sector, strengthening active labour market policy measures, making the business environment more attractive for foreign direct investment by making the regulatory framework more stable and gradually abolishing regulated energy prices.


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