Economy minister: Hungary reforms working

Baile Tusnad, Romania, July 23 (MTI) – Hungary’s reforms are working and the economy is now on a new growth path which must be stabilised, economy minister Mihaly Varga said at an economic forum at the 26th annual Balvanyos Summer University in Baile Tusnad (Tusnadfurdo), in Szeklerland, central Romania, on Thursday.

When the current government was sworn in in 2010, Hungary, like Greece, was among the world’s ten riskiest economies, Varga said. “We were a country on the brink of default,” the minister added.

Hungary today is “light years ahead of Greece, which is still on life support”, he said. Unlike Greece, Hungary was able to pay back the IMF loan of over 7 billion euros, which it took up in 2008, Varga said, adding that the government has also paid back 4 billion euros of the 5.5 billion euro loan it took up from the European Commission.

The minister said the government had balanced the budget and has been keeping the deficit below 3 percent “for years”, while public debt is constantly shrinking. He said Hungary achieved the second largest public debt reduction after Greece.

On the topic of Hungarian-Romanian economic relations, Varga said the completion of the North Transylvanian motorway would be a major step forward. He said that bilateral trade could be intensified, as Romania accounts for merely 4.4 percent of Hungary’s foreign trade turnover.

The minister said the hope of Europe today rests on Central Europe, a region which he said “is seeing far more dynamic economic growth” than Western Europe. Varga noted that every country in the region has “close ties with the EU”, especially with its “powerhouse”, Germany.

The minister said that Central Europe still had much to improve the quality of public services.

Varga pointed out the automotive industry, as a key driver of future growth, and added that every country must keep up with the “unstoppable” technological revolution.

He said the government would offer assistance to borrowers with foreign currency-denominated car loans similar to that received by households with forex home loans. Varga said the cabinet will soon decide on the conversion of forex vehicle loans into forints, ensuring more favourable conditions for those affected than ones at present. He noted that Hungarians have more than 200,000 forex vehicle and personal loan contracts with a value of almost 300 billion forints (EUR 970m)

Varga touched on the topic of wages, and said current levels resulted in Hungary being subjected to “constant brain-drain”. He said the training of young people who later take up jobs in Western Europe was unsustainable in the long run. He said the problem could only be resolved by reducing the wage gap.

Photo: MTI

Source: http://mtva.hu/hu/hungary-matters