Hungarian government’s latest decision may override everything economically

The government is setting up a working group to review public spending at the request of the European Union, and not because it is looking to introduce austerity measures as reported by left-wing media, the finance ministry said on Wednesday.

Only leftist parties and the EU “want austerity measures”, not the government, the statement said.

The government is setting up the working group at the EU’s request, and in line with its country specific recommendations. “The government continues to stand by its firm decision not to comply with any requests from Brussels aiming to scrap family support or the utility price cap scheme,” the statement said.

The European Commission called on Hungary in May to improve budgetary balance and to scrap the energy support schemes by the end of the year. “We reject that Brussels wants austerity measures and to scrap utility price caps,” the ministry said.

The government will continue to preserve fiscal stability and has set the target deficit at 2.9 percent of GDP in 2024, the ministry said. State debt is expected to fall to 66.7 percent, the statement said.