EU will take 'not a single cent' from Hungary, says PM

(BUDAPEST) - Hungary will not lose a single cent of its EU funds, Prime Minister Viktor Orban insisted on Friday after Brussels threatened last week to freeze 495 million euros ($655 million) destined for Budapest in 2013.

"You can count on it: not a single cent will be taken from Hungary in January 2013," Orban said in his weekly interview with MR1 national radio.

The European Commission said last week it was considering the unprecedented move of freezing so-called cohesion funding to Hungary to pressure it into reducing its excessive deficit.

Relations between Budapest and Brussels are already tense following a raft of new laws passed in Hungary which critics see as undemocratic.

"The procedure for excessive deficit against Hungary has been ongoing since 2004, we are suffering the consequences of the past," Orban said Friday, laying the blame squarely on previous governments.

The Commission's latest move was purely "technical," he went on, arguing that: "Everyone in Brussels knows Hungary's efforts to lower the deficit and only seven countries in the EU have a lower deficit than ours."

"It is impossible that even a cent be taken from a country in a position as good as ours," he went on.

Budapest says its budget deficit fell below the EU threshold of 3.0 percent in 2011 for the first time since the country joined the bloc in 2004, making it the eighth-lowest deficit in the European Union.

Stripping out one-off measures, however, the deficit in 2011 was in fact some six percent of gross domestic product.

The freeze threatened by the Commission would hit so-called cohesion funding, aimed at reducing economic disparities across the 27-nation bloc, and would concern 29 percent of Hungary's allocations for the year.

It would take effect January 1, 2013.