BUDAPEST (AFP) — Government and central bank officials outlined measures, including cutting government spending, to mitigate Hungary's risks in the current global financial crisis at a meeting in Budapest Saturday.
Hungarian Prime Minister Ferenc Gyurcsany expressed hope that "ongoing investments would not have to be suspended," during a meeting of some 60 top lawmakers, ministers, central bank chiefs and trade union leaders to work out a short-to-medium term action plan to tackle the financial turmoil.
He also announced modifying the use of European funds "if necessary," while offering no specifics, and ruled out implementing tax cut proposals during the current financial turbulence, a decision supported by business groups.
"(Tax cuts) should be carried out but at the moment the state lives day by day in order to maintain its solvency. First we have to put the fire out," said Sandor Demjan, representing Hungarian employers.
But, Demjan added, "there is no reason to congratulate ourselves for the five-billion-euro (6.73-billion-dollar) loan received from the European Central Bank, as Hungarian citizens will have to pay for it back for long years (to come)."
For his part, central bank governor Andras Simor said Hungary can fend off the effects of the financial crisis only if its economy becomes less vulnerable by "the adoption of the euro, a hike (in competitiveness) by increasing economic growth and a significant decrease of social expenses."
Limiting wage increases might be a tool for reaching this goal, he said, adding that "asking for further sacrifices of the population is difficult but in the interest of all."
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