The European Commission has given Hungary six months to correct its budget deficit in a sustainable and credible manner. The government must meet its own deficit target of 2.5 percent of GDP in 2012 and should ensure that in 2013 the deficit remains below 3 percent of GDP. The recommendation will be discussed by ECOFIN (Economic and Financial Affairs) next week in Brussels. In February, the EC proposed freezing Hungary’s cohesion fund subsidies, which would be a blow as they’re worth approximately €500m. This proposal could be revoked by the end of the year if Brussels believes the government in Budapest is back on the right track.
