BRUSSELS – Hungary on Wednesday (22 February) was given less than a year to lower its public deficit or have a third of its EU subsidies slashed, amounting to €495 million. It is the first time the EU commission takes such an action.
“This unprecedented step follows the commission’s repeated warnings to Hungary urging it to step up its efforts to end the country’s excessive government deficit, and its subsequent failure to take appropriate action,” the EU executive said in a statement. Hungary has overshot the EU deficit threshold of three-percent of gross domestic product every single year since it joined the EU, in 2004.
The freeze will affec one third of the EU funding for infrastructure projects in Hungary and will take effect on 1 January 2013 if the Hungarian government does not take “satisfactory”, “structural” measures to reduce the deficit, rather than the one-off measures tabled hastily by the Viktor Orban government on the eve of the decision.
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