EU to unblock more emergency funding to Hungary
(BRUSSELS) - The European Union will unblock more financial aid to Hungary next month as the government there has made enough fiscal progress to deserve it, EU Commission chief Jose Manuel Barroso said Tuesday.
"Hungary is adopting the right policies to address high levels of government and external debt," Barroso told a joint press conference with Hungarian Prime Minister Ferenc Gyurcsany.
"Our assessment is positive and the next installment will be paid at the end of March," he said, without giving an amount.
Last October, the EU promised 6.5 billion dollars in total for Hungary, badly hit by the global financial crisis, as part of a bigger 20 billion euro bailout deal with the International Monetary Fund and the World Bank.
Budapest agreed to tight budgetary policies in exchange for the massive lifeline to help it avert default.
Nevertheless the economy is still experiencing major problems.
"We're in serious trouble indeed," the Hungarian prime minister said.
The Hungarian forint has hit record lows against the euro, diving to 304.60 forint to the European currency this week compared with 220 forint last year.
Gyurcsany stressed the need for his country to adopt the euro as soon as possible and called for swifter accession procedures.
"Do we have to wait two, or two and a half years in the ante-chamber of the euro?" he asked.
He has said that the euro will probably not be introduced in Hungary before 2014.
On Monday, Gyurcsany said that Hungary must revamp its tax, social security and pension systems to re-invigorate the economy and meet its budget deficit target.
"The state has to spend 200-220 billion forint (660-726 million euros, 847-927 million dollars) less than was previously planned" for 2009, Gyurcsany told parliament.
Barroso praised Hungary for bringing the budget deficit down from over nine percent of Gross Domestic Product (GDP) in 2006 to under three percent.
Gyurcsany also called for a 100-billion-euro (126-billion-dollar) rescue plan from the European Union for crisis-hit banks in Central and Eastern Europe.
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