There was a consensus at the EU Finance Ministers’ Summit that a supportive fiscal policy is still needed to relaunch the economy. Any early withdrawal of support could even lead to a new setback, Finance Minister Mihály Varga said after the Economic and Financial Affairs Council summit (ECOFIN) in Brdo, Slovenia.
The meeting also reaffirmed Hungary’s position that economic policy should focus primarily on increasing investments, job creation and qualitatively and competitively replacing capacity lost as a result of the crisis, the minister of finance said.
The leaders discussed, among other things, how Member States can return to the balanced fiscal policy required by general EU rules post-crisis without compromising growth.
Varga emphasized that the position of the Hungarian government has been clear from the beginning. After economic protection, it is necessary to restart the economy and gradually return to reducing the budget deficit. We are currently in the phase of relaunching the economy, so supportive fiscal policies are still needed, he added.
Varga pointed out that the government’s economic protection and restart measures have contributed about 8 percentage points to the economy’s performance this year. The restart of the Hungarian economy is one of the fastest, with GDP growth of 17.9 percent in the second quarter compared to the same period last year, currently third in EU rankings, he indicated.
The minister emphasized that those participating in the meeting agreed that the premature withdrawal of subsidies could slow the growth of European economies and even lead to a new crisis.
Mihály Varga said that they also discussed current issues related to the future of international taxation. Hungary still refuses any tax increase, such as the introduction of a minimum tax of 15 percent. This would mean a deterioration of Hungary’s competitiveness and is thus not supported by the Hungarian government despite international pressure, the finance minister said.