Hungary May Delay Public-Debt Reduction Rule Until 2016

Hungary may delay until 2016 a constitutional rule passed in April that forces the government to keep cutting public debt, according to a bill proposed by Economy Minister Gyorgy Matolcsy.

The constitution adopted this year requires the government to lower debt each year until it reaches 50 percent of gross domestic product, with the Fiscal Council in charge of implementation. Hungary was the European Union’s most indebted eastern member last year, with its public debt at 81 percent of gross domestic product.

“According to the transitional rule, the debt-reduction rule would be first applied when making the budget for 2016,” said the draft, which is dated yesterday and posted on parliament’s website.

To contact the reporter on this story: Andras Gergely in Budapest at agergely@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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