Barroso: Hungary must speed up fiscal consolidation

European Commission President José Manuel Barroso has called on the new Hungarian government to speed up fiscal consolidation, stressing that it was not Brussels that was demanding action but the financial markets. EURACTIV Hungary reports.

After meeting newly-elected Hungarian Prime Minister Viktor Orbán of the centre-right Fidesz party in Brussels yesterday (3 June), Barroso urged the country's new leader to accelerate fiscal consolidation measures in the coming months.

Orbán promised an initial economic "action plan" within 72 hours.

''The Commission says to Hungary and every other member state […] to speed up fiscal consolidation and not to loosen it,'' said Barroso, stressing that this was ''a very clear message, lacking any ambiguity''.

Barroso stressed that it was not Brussels who was asking for such fiscal discipline, but the markets themselves. He insisted that the Commission does not want to give instructions to individual countries, but said consolidation was in the interest of every member state as ''markets punish steps in the other direction''.

The Commission president welcomed the structural reforms proposed by the Hungarian prime minister in Brussels. Orbán stressed that his government would carry out structural reforms to bring transparency, less bureaucracy, ''bearable and collectable'' taxes and political responsibility to Hungary.

The new prime minister assured Barroso that Hungary will decrease its budget deficit during his tenure. ''It is not because of the Commission or the markets, but because a deficit is a bad thing and budgetary balance is good,'' he said, pledging to decrease the country's debt and boost the competitiveness of the Hungarian economy through a ''competitive'' tax system.

Barroso still silent on Hungary-Slovakia row

Although journalists in both Hungary and Slovakia are demanding a reaction from the European institutions on tensions between the two countries – which increased after Hungary introduced a law allowing dual citizenship for 'ethnic Hungarians' living in neighbouring countries (EURACTIV 27/05/10) – Barroso refused to be drawn on the issue.

''What I can say is that I asked Prime Minister Orbán to discuss the problem with his counterpart in a European spirit,'' he said when asked to comment on the row. He explained that this is what he always advises when it comes to bilateral disputes between member states.

When asked for his view, Orbán simply said that Slovakia was the only neighbouring country to object to Hungary's policies. ''Hungary has seven neighbours. With six we have managed to build a good relationship until today, and I hope that we will manage the same with the seventh too," declared the prime minister.