Ministers support action on Hungarian debt

Finance ministers agree with Commission that Hungary has not done enough to reduce its deficit.

National finance ministers today endorsed the European Commission’s decision to take action against Hungary over its failure to deal with its deficit.

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The ministers, who met in Brussels, agreed with the Commission’s verdict, published on 11 January, that the country had not taken sufficient action under the terms of the EU’s strengthened stability and growth pact.

This is the first time that the Commission has applied the rules of the pact since the so-called ‘six-pack’ of economic governance legislation came into force on 13 December 2011.

If Hungary continues to take no action it could lose access to EU cohesion funds as a penalty for fiscal laxity. Hungary cannot be fined because it is not in the eurozone, but it could become ineligible for cohesion funding from January 2013.

Today’s agreement does not approve the suspension of funds but endorses the Commission’s original decision and enables it to take further steps.

Speaking after today’s meeting, Olli Rehn, the European commissioner for economic and monetary affairs, said that the endorsement showed that tougher enforcement under the six-pack was working.