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Hungary punished by the EU Finance Ministers

March 14th, 2012

Analysts were in no doubt that European finance ministers would approve the partial suspension of next year’s cohesion funds for Hungary. What they do not agree upon is who is at fault.

ECOFIN, the Council of Finance Ministers of the European Union decided on Tuesday to withhold almost 500 million Euros worth of cohesion funds unless the Hungarian government can prove in the coming months that it will keep public deficit below 3 per cent in 2013. Although eventually the decision was taken after a long and heated debate, the newspapers printed the night before had taken it for granted.

In Magyar Nemzet, Anna Szabó thinks the sanctions will be upheld until Hungary “dances to the European Commission’s tune”. She finds it odd that the commission had to “hastily improvise a new forecast for 2013 GDP growth in Hungary,” in order to prove itself right.

Earlier, Brussels predicted that Hungary’s public deficit would exceed the required 3 per cent by less than one quarter of one per cent, whereupon the Hungarian government outlined new measures to cut the deficit by 0.4 per cent. Then the Commission issued a new forecast, projecting a lower growth rate and therefore a larger deficit.

Anna Szabó concludes from this succession of events that the European Commission may in fact be concerned about Hungary’s public deficit, which is well below the Union average, but it’s main concern is how to find newer and newer ways to justify the sanctions it imposes on Hungary,
In Népszabadság, Brussels correspondent Eszter Zalán remarks that Hungarian diplomats did not even try to build up a coalition among the finance ministers to vote down the draft tabled by the European Commission. She thinks that was because in the present tough financial environment, the Council cannot afford to appear lenient. The only question is why they singled out Hungary. Her answer is that the Hungarian government has been too provocative in its attitude towards Brussels and has thereby practically “offered itself as an example, for the Commission to show its teeth,” and thereby set a precedent.

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