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EU not to ease pressure on Hungary

May 6th, 2013

Commentators from left to right believe that the EU is unlikely to lift the excessive deficit procedure imposed on Hungary, and agree that its motives are political. A pro-government commentator says there are foreign interests behind the pessimistic EU forecast, while both a left-wing editorial and a business columnist interpret the move as a warning to Hungary.

On Friday, the European Commission released its forecasts for member countries under the excessive deficit procedure, and in Hungary’s case it predicted a 3 per cent deficit for this year and a 3,4 per cent deficit for 2014. Commissioner Olli Rehn told the press the excessive deficit procedure can still be lifted this year, dependent on “further fiscal measures” by the Hungarian government.

In a bitter editorial in Magyar Nemzet entitled ’Nothing is ever enough’, Richárd Szilágyi claims that the EU’s forecasts on the expected Hungarian public deficit have regularly been less exact than the government’s. Never mind the fact that the 2012 deficit was under 2 per vent, he complains, the EU is still not satisfied. The reason is, he suspects, that the deficit has been reduced through the various extra levies on banks, communication enterprises, utility infrastructure, energy and gambling, which have incensed international business interests. In vain did Mr Orbán ask for fair and equal treatment, the European Union does not seem to heed its own principles, the author claims. He finds another proof of discrimination in a proposal by a committee of the Council of Europe to put Hungary under constitutional monitoring (the motion is unlikely to pass in the Parliamentary Assembly). The rules of the Hungarian Constitution that are found unacceptable by the European Parliament and the Venice Commission are regarded as perfectly normal in many other countries, he complains. This double standard, Szilágyi claims, extends to promising Romania an end to her excessive deficit procedure, while Olli Rehn demands further action from the Hungarian government. Is this not the familiar scenario again? – he asks.

In its front page editorial, Népszabadság thinks Brussels is punishing Hungary for the government’s confrontational approach. “You cannot seriously think that the Commission can predict 30 billion surplus expenditure by the end of the year,” Népszabadság remarks. The Commission cannot tell Hungary that it is offended by repeated angry remarks about its Justice Commissioner. What it can do is to be overly zealous in keeping the books for Hungary. The excessive deficit procedure is not the only weapon Brussels is brandishing as a sign of warning. It is also withholding hundreds of millions of forints worth of Cohesion Fund money, on technical grounds. “European politicians of course know it makes no sense to torture countries with the 3% deficit rule in times of crisis”, Népszabadság remarks, and finds the Commission is in reality sending a simple message to Budapest: “do not mess with us!”

In Világgazdaság, Miklós Újvári predicts that the excessive deficit procedure will be upheld, whatever the figures. “Not an elegant move,” he adds, but the explanation is not hard to fathom: EU leaders are worried because of “what is going on in Hungary” and they know the deficit procedure is their only instrument to exert some influence on Hungary. This proves how inadequate the structure of the EU is when it comes to “reigning in tendencies” that are in contradiction with European principles. In fact, Hungary did everything in its power to lower the deficit – overtaxing businesses – and the present prediction of the Union is built on the worst possible scenario, minimal growth and vast expenditures during election year. Újvári thinks it is highly unlikely that the deficit would soar above 3% next year, even in the event of reckless election spending.  The EU, however, has good reason to worry about the government’s policies, its corruption index and its defiance. Whoever claims it is simply international business interests that are waging war against the Orbán government, fails to understand the elementary principles Europe is built upon– he concludes.

In Magyar Hírlap, Csaba Szajlai remarks that the European Commission has rectified its earlier forecasts, and now admits that a slight GDP growth is probable this year and the public deficit is unlikely to exceed the 3 per cent Maastricht threshold. He reminds the reader that in the past the forecasts coming from Brussels usually sharply contradicted the figures of the Hungarian government, and it regularly turned out that successive Hungarian administrations were unable to produce sustainable budgets. Szajlai takes the latest report from Brussels as an encouragement: “Go Hungary, but nothing has been decided yet.” He thinks that if the government wants Brussels to lift the excessive deficit procedure in June, it has to cut a further 120 billion HUF from the deficit. Alternatively, if the government has absolute faith in its own forecast, then it can wait until the autumn figures prove it right.

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