Sunday, 11 September 2011

Orbán pledges to put Hungary's economy on new footing in 2011

Hungary's government will put the economy on a new growth-driven footing in this year with the aim of reorganizing the way the country works over the next decade, Prime Minister Viktor Orban told an economic forum on Friday.

Setting out the main principles of Hungary's New Szechenyi Plan, an economic recovery programmed, Orban said he was ready for discord in order to reform the country and create jobs.
"The kind of decade ahead of us will be decided in 2011," Orban said. "If we are serious about reorganizing the country, we cannot afford to turn away from discord."
Orban said state spending must be cut and revenues boosted.
"Spending must be reduced and revenues in some areas must be increased; this is about reorganizing Hungary rather than austerity," he said.
Orban repeated his government's pledge to create one million jobs in ten years.
If Hungary's small and medium sized enterprises grow in number and flourish, it will make the whole country stronger, more successful and happier, Orban said.
The two-thirds parliamentary majority that the governing parties hold and the resulting political stability represent Hungary's "greatest advantage against competitors," he said.
People who say the Hungarian people's will expressed by the two-thirds majority present a threat to Hungary and put the country's future at risk, Orban said.
Earlier in the week Orban announced fiscal changes with the aim of enhancing its market credibility. Orban said in an interview the government would discuss spending reforms by February 15.
Analysts polled by MTI on Thursday welcomed Orban's renewed pledge to start spending reforms and cuts to unemployment benefits.
Orban repeated a pledge made earlier to outline a series of measures aimed at shrinking spending on pensions, unemployment benefits and state subsidies for drugs. So far the government has no estimates for how much money these moves would save.
Rating agencies have given warning that Hungary's long-term fiscal sustainability hinges on structural reforms rather than short-term fixes such as temporary taxes on banks and other sectors aimed at meeting this year's budget-deficit target of under 3 percent of gross domestic product. Once the taxes expire in 2012 the centre-right Fidesz government will have to ensure the budget's sustainability by other means, analysts said.
Gergely Suppan, an analyst with Takarek Bank, noted that Orban's pledges had not been costed yet, but were the government to follow through in February with structural reforms this could radically improve Hungary's risk assessment and sovereign debt rating.


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