European Interest

Brussels targets Hungary over regulatory barriers

Flickr/serzhile/CC BY 2.0
A view of the headquarters of the Hungarian government in Budapest.

Hungary has been warned by the European Commission over “the existence of a significant deviation from the adjustment path toward the medium-term budgetary objective in 2017”.  The Commission also made several recommendations.

Brussels on May 23 released a “Recommendation for a Council Recommendation on the 2018 National Reform Programme of Hungary and delivering a Council opinion on the 2018 Convergence Programme of Hungary”.

The document says that next year, in view of Hungary’s general government debt ratio above 60% of GDP and projected output gap of 2.3%, the nominal growth rate of net primary government expenditure should not exceed 3.9%. This is in line with the structural adjustment of 0.75% of GDP stemming from the matrix of requirements under the Stability and Growth Pact, the Commission’s recommendation says.

As reported by the Budapest Business Journal, Brusselsʼ 2018 spring forecast suggests there is a risk of a significant deviation from that requirement in 2019. This is why the Commission wants further measures to be implemented this year – to comply with the provisions of the Stability and Growth Pact, in light of a strongly deteriorating fiscal outlook.

The Commission also noted that while the proportion of people at risk of poverty and social exclusion decreased to 26.3% in 2016, it remains above the EU average. Also, the Commission notes that children in general are more exposed to poverty than other age groups.

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