Bloomberg News

Hungary May Need EU, IMF Budget Approval for Loan, HVG.hu Says

July 10, 2012

Hungary will probably need to have its 2013 budget approved by the International Monetary Fund and the European Union in order to qualify for a loan, HVG.hu reported, citing a European Commission document.

The EU executive, which considers the draft budget to be based on overly optimistic forecasts, may ask that Parliament delay approving the plan until after consultations with the lenders, the weekly newspaper’s website reported today. Prime Minister Viktor Orban wants the budget framework approved on July 12, before the summer recess, HVG.hu said.

The EU may ask Hungary to strengthen the Fiscal Council, reduce the tax burden on low-income workers, increase energy levies, introduce a real estate tax and cap an extraordinary bank tax while phasing out other industry levies, HVG.hu said.

Several hundred billion forint of tax cuts may not be covered in next year’s budget, HVG.hu said, citing commission concerns. One hundred billion forint is $428 million.

To contact the reporter on this story: Zoltan Simon in Budapest at zsimon@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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