Hungarian economy minister: Next EU budget should be negotiated with new commission – Interview

Finance Minister Mihály Varga, in an interview to news portal Origo on Saturday, said it may not be worthwhile to negotiate the next European Union budget with the incumbent European Commission, arguing that a new commission will take office after next year’s European parliamentary elections, whose president will likely be someone other than Jean-Claude Juncker.

The next commission will have to be granted the right to prepare the budget that will be in effect during its own term, Varga said.

The minister called the current situation around the EU budget a “strange” one, arguing that the incumbent commission was trying to “force through” a budget that it will not even have the power to implement.

“I think it’s very likely that the new budget will be prepared by the next European Commission,” Varga said.

The minister said the new budget should be drawn up on the basis of the EU’s “old” fundamental values. Economic development should be targeted at areas that are still behind, he argued.

“There’s a kind of quiet, internal war going on,” he said.

“This is what’s really behind the debates around the directive on posted worker rules and the pillar of social rights, and the draft budget for the next funding period falls into this line as well. The draft would take [funds] away from central and eastern Europe and divert them to the Mediterranean countries,” Varga added.

“And the fact that the European Commission has prepared a pro-migration draft budget which would take money away from European people while providing extra to migrants and for their admission is especially unacceptable,” the minister added. “It’s a bad proposal and it generates bad debates.”

As regards the shape of the Hungarian economy, Varga said the second quarter GDP growth rate was a positive surprise “which puts us on the podium in the EU”. He said it was realistic to expect a growth rate of more than 4 percent for the full year after a 4.5 percent growth rate in Q1 and last quarter’s 4.6 percent growth rate.

The finance ministry stands by its full-year deficit target of 2.4 percent of GDP, he said.

Hungary’s internal economic situation suggests that the economy will continue to grow, he said, adding that only “global market disturbances” could spring a “negative surprise” in the coming months. Varga added, however, that Hungary was now much better prepared for any external economic shocks than it had been at the beginning of the decade.

The country’s external financing position is stable, Varga said, adding that the state budget had ample reserves. The public debt-to-GDP ratio has fallen from 83 percent to 73 percent in recent years, while the share of FX debt within public debt has fallen under 20 percent, the minister said.

Photo: MTI

Source: MTI