Govt Office Chief Presses For National Infrastructure Development Programme

  • 1 Oct 2015 5:24 AM
Govt Office Chief Presses For National Infrastructure Development Programme
Government office chief János Lázár urged the launch of a national infrastructure development programme, speaking at a conference organised by Portfolio.hu. The development programme will be used to fund the roughly 100 Hungarian companies that do not count as small and medium-sized firms and are thus not eligible for EU funds.

In the coming weeks, the government will weigh—together with social partners —the tools it can use to sustain economic growth. It is “vital” for Hungary to maintain an economic growth rate above 2%, he said, mentioning transport investments as well as support for home construction as possibilities.

Lázár said that Hungary is in need of at least 2,000 billion forints (EUR 6.4bn) in European Union payments in 2016 in order to sustain the current level of economic growth. The government expects to receive 1,300-1,400 billion forints, but there is a chance of receiving up to 1,600 billion, he said.

Lázár noted that the government will call tenders for all EU funds available for the 2014-2020 funding period by June 30, 2017.

He said the government would call a total of 133 tenders this year for the 2,700 billion forints available. Lázár said there is also a need for “gigantic symbolic” investments in Budapest to sustain growth. He said the government will have to spend about 130 billion forints on developments in Pest County which is, similarly to Budapest, not eligible for structural fund money. He said the government is ready to “separate” Pest County from Budapest in terms of eligibility for EU funds by 2021, even if it means creating an entirely new county structure.

The government office chief pointed out a number of risks to growth such as the volume of bank loans to businesses, which he said would have to increase significantly over the first half of 2016. Bureaucracy must be scaled back, he said, adding that the government must take a decision on the matter in 3-6 months.

Lázár touched on the state of Hungarian agriculture and said that if the government fails to take action, the sector will weaken due to changes in EU rules, like the elimination of milk quotas. In connection with an agreement forged between the European Bank for Reconstruction and Development (EBRD) and Erste Bank in February, Lazar said it was “worth reviewing whether commitments had been fulfilled both on the part of the government and the financial sector”.

The cabinet and the Banking Association should jointly look into how corporate lending could be substantially boosted by commercial banks as soon as in the first half of 2016, he said.

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MTI photo: Koszticsák Szilárd

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