Hungary's PM: 2016 Budget Planning Means “Everyone Can Move Forward”

  • 27 Apr 2015 10:00 AM
Hungary's PM: 2016 Budget Planning Means “Everyone Can Move Forward”
Thanks to the government’s advance planning for the 2016 budget “everyone can move forward,” Prime Minister Viktor Orbán said in his regular Friday morning interview with public radio. The goal is to push the jobless rate down to around 3% by 2018- 2019, which in effect would mean full employment. Tax cuts are a means to stimulate employment and they are also tantamount to a pay rise, he added.

The prime minister said Hungary’s bank levy would remain the highest in Europe, even after it is reduced, but the government is committed to fulfilling its part of an agreement it recently reached with the EBRD on cutting the bank levy in return for increased lending activity by banks.

“This will happen in two or three steps,” Orbán said. He noted that banks had not agreed to be legally bound to boost their lending activity, but had made a promise to do so. “We will keep our word, then we will see if the banking sector keeps theirs,” he said.

Orbán said it was not yet known how great the burden would be on the banking sector due to compensating clients of failed brokerages, and whereas there is a debate about whether the burden conflicts with the EBRD agreement, he said he did not want to weigh in on the matter.

There is some truth to what the banks say concerning the fairness of making them pay into the compensation fund, he said. But decades of financial fraud must also be taken into account, and that professionals in the business must have seen the unreliability of certain companies, he added.

The prime minister said that the state had lost 400-500 million forints because a government background institution had kept money at one of the brokerages unlawfully.

He said there people had already been dismissed or suspended, but the related investigation was ongoing.

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