Economy
Hungary PM Orbán pledges deficit cuts, sends message to banks
Hungary's Viktor Orbán is gearing up for another milestone announcement on reducing the country's government debt, the Prime Minister said in a public radio programme on Wednesday morning. The government is planning to rely once again on funds becoming available as a result of pension system restructuring as a key financial source of deficit cutting, Orbán said on Kossuth Radio today.
The premier has also discussed plans for a "routine solution" to short-term fiscal measures and accelerating nationwide reform. In a comment addressed to banks, he said splitting losses are among the priority tasks outlined for the fall.
Europe in big trouble
After the earlier speculation, new developments in the past few days have revealed the true nature of the crisis. It has become clear that Europe is in big trouble, recession can be expected to be long drawn out including the next 8 or 10 years, Orbán said in the radio interview.
The worst issue hampering Europe is high debt, the PM said, highlighting the graveness of the situation by pointing to the fact that only Sweden and Hungary have been able to reduce government debt this year.
Some will fail...
The Prime Minister has reiterated an earlier statement that Hungary "must certainly avoid drifting onto the Greek path". Following its own course of action, Hungary will emerge as a winner from the battle, Orbán said, claiming the government is not going to change directions. The government remains strongly opposed to austerity measures which will therefore not be employed, he said.
Deficit cuts at all costs
The government is going to announce new deficit-cutting measures in the next few weeks, Orbán said.
The Prime Minister has confirmed he would like to see GDP drop below 70% of GDP in 2012, and be closer to 60% than to 70% by the time the government's mandate expires in 2014.
As reported earlier, Orbán announced a single deficit cut from 81% to 77% of GDP using funds that had become available as a result of private pension fund restructuring in late June, totaling over HUF 1,340 billion. Subsequently, he broke news of the next move which is to take place early in the fall which will amount to 2% to 3.5%.
Reform to gain speed
In Orbán's words, the government will sort out short-term budget issues "as a matter of routine". A much greater task ahead is a long-term restructurng aimed at revitalizing the entire national economy, he said.
Hungary's government is responding to the European economic crisis by accelerating plans to reorganize and re-invigorate the country, Orbán said on public radio. At some point over the next 7 days, the premier is going to submit a proposal to the cabinet and governing parties Fidesz and KDNP to accelerate reform plans aiming to re-vitalize Hungary including education, healthcare, local government and the system of business subsidies.
"We cannot afford a single wasted forint, a single wasted expense, or a single employee working in state administration in excess of what is needed; the country can no longer afford these costs," Orbán said.
Message to banks
Talking about the issue of FX mortgage holders, the Prime Minister has responded to an earlier statement by National Bank of Hungary Governor András Simor which was released by WikiLeaks yesterday. According to the latter, Simor has said FX mortgage holders need not be bailed out as people should at last learn there is no such thing as a free lunch. In his response today, Orbán said these were "the words of a banker", this was the typical bankers' mindset which is why they should not be allowed to get within close range of government roles.
"Surely there is a lesson to be learned, however this includes banks as well. They will have to share the present financial burden of earlier ill-advised foreign currency loan products, and splitting these losses will be one of the key tasks ahead this fall. Meanwhile, the exchange rate barrier is already in place, the government programme for protecting homeowners threatened by repossession is being continued, or may even be expanded by adding new features," Orbán concluded.
The premier has also discussed plans for a "routine solution" to short-term fiscal measures and accelerating nationwide reform. In a comment addressed to banks, he said splitting losses are among the priority tasks outlined for the fall.
Europe in big trouble
After the earlier speculation, new developments in the past few days have revealed the true nature of the crisis. It has become clear that Europe is in big trouble, recession can be expected to be long drawn out including the next 8 or 10 years, Orbán said in the radio interview.
The worst issue hampering Europe is high debt, the PM said, highlighting the graveness of the situation by pointing to the fact that only Sweden and Hungary have been able to reduce government debt this year.
Some will fail...
The Prime Minister has reiterated an earlier statement that Hungary "must certainly avoid drifting onto the Greek path". Following its own course of action, Hungary will emerge as a winner from the battle, Orbán said, claiming the government is not going to change directions. The government remains strongly opposed to austerity measures which will therefore not be employed, he said.
Deficit cuts at all costs
The government is going to announce new deficit-cutting measures in the next few weeks, Orbán said.
The Prime Minister has confirmed he would like to see GDP drop below 70% of GDP in 2012, and be closer to 60% than to 70% by the time the government's mandate expires in 2014.
As reported earlier, Orbán announced a single deficit cut from 81% to 77% of GDP using funds that had become available as a result of private pension fund restructuring in late June, totaling over HUF 1,340 billion. Subsequently, he broke news of the next move which is to take place early in the fall which will amount to 2% to 3.5%.
Reform to gain speed
In Orbán's words, the government will sort out short-term budget issues "as a matter of routine". A much greater task ahead is a long-term restructurng aimed at revitalizing the entire national economy, he said.
Hungary's government is responding to the European economic crisis by accelerating plans to reorganize and re-invigorate the country, Orbán said on public radio. At some point over the next 7 days, the premier is going to submit a proposal to the cabinet and governing parties Fidesz and KDNP to accelerate reform plans aiming to re-vitalize Hungary including education, healthcare, local government and the system of business subsidies.
"We cannot afford a single wasted forint, a single wasted expense, or a single employee working in state administration in excess of what is needed; the country can no longer afford these costs," Orbán said.
Message to banks
Talking about the issue of FX mortgage holders, the Prime Minister has responded to an earlier statement by National Bank of Hungary Governor András Simor which was released by WikiLeaks yesterday. According to the latter, Simor has said FX mortgage holders need not be bailed out as people should at last learn there is no such thing as a free lunch. In his response today, Orbán said these were "the words of a banker", this was the typical bankers' mindset which is why they should not be allowed to get within close range of government roles.
"Surely there is a lesson to be learned, however this includes banks as well. They will have to share the present financial burden of earlier ill-advised foreign currency loan products, and splitting these losses will be one of the key tasks ahead this fall. Meanwhile, the exchange rate barrier is already in place, the government programme for protecting homeowners threatened by repossession is being continued, or may even be expanded by adding new features," Orbán concluded.
