Hungary denies it is like Greece

HUNGARY’S finance minister Gyorgy Matolcsy yesterday said the country would be sticking by its 3.8 per cent of GDP budget deficit target and dismissed comparisons with Greece.

Matolcsy yesterday told CNBC that although there were “worrying signs” about the Hungarian budget, “it is blatant that Hungary is not Greece”. He said: “We’ll stick to our 3.8 per cent budget deficit level for this year. It is evident that we have tightening measures in place.”

“There is no need for new austerity plans but on the other hand we have to cut budget expenditures, we have to cut bureaucracy and of course we have to boost investments,” he added.

Matolcsy’s comments come after Hungarian officials said last week that the state of the country’s finances put it close to default. The euro suffered, falling to a four-year low of $1.1820 against the dollar.

BNP Paribas’ Hans-Guenter Redeker said: “Comparison with Greece and comments suggesting that Hungary was on the brink of default have to be seen as designed to prepare the domestic audience for the austerity measures to come.”

He added: “However, these are not the right times to play scaremongering. Hungary needs to gain credibility back and it has now attracted the attention of markets concerned with debt sustainability probably more than they should be.”