Monday, September 19, 2005

Hungary in the slow lane

In what may be a blessing in disguise for Hungary its ambitions to be in the first tranche of the latest EU enlargement to join the Eurozone, Eurostat will reject Hungary's plan to account for motorway building off-budget.
It seems that Commissioner Almunia got rather short at a press conference in Budapest with Hungary's Finance Minister János Veres, claiming in a neat piece of hypocrisy that Hungary's budget must reflect reality.
If they are unable to fiddle their figures the Hungarians will be unable to meet their deficit target of 3.6 percent of gross domestic product in 2005. This of course would have ramifications with commentators and analysts stating that would be unable to meet the 2010 euro zone entry deadline if Eurostat does not consent to excluding motorway spending from the central budget. Indeed the financial markets claim that this decision could boost the Hungarian public sector deficit by 1.3 percent of GDP.Of course the Hungarian Government are spinning wildly against this, I tend to believe the markets, rather than government spin doctors.

None of this is overly surprising however with the announcement today that "Bribery, backroom agreements or irregularities are involved in about 90 percent of the approximately 3,700 public procurement deals struck in Hungary each year". I am sure OLAF will do its best

No comments: