"The government will stick with the ongoing reduction of thenational debt and keep the budget deficit below 3 per cent (of grossdomestic product)," a spokesman told the state news agency MTI.
The new basic law, due to come into force in January, prohibitsgovernments from increasing the public debt until it has been broughtbelow 50 per cent of GDP. Under Matolcsy‘s proposal, this limitationwould only be applied from 2016.
A "battle" against the national debt to secure Hungary‘s"financial autonomy" has been a cornerstone of Prime Minister ViktorOrban‘s rhetoric since his government took office in the spring oflast year.
The government trumpeted earlier this year an almostsix-percentage-point debt reduction to 76 per cent, achieved througha de facto nationalization of pension funds.
However, with much of what Hungary owes abroad denominated inforeign currencies, a dramatic weakening of the Hungarian forintmeans the debt-to-GDP ratio climbed back to 82 per cent between Julyand October, recent central bank data showed.
Following an embarrassing policy U-turn for Orban‘s government,Hungary is currently seeking a new deal with the InternationalMonetary Fund, which put up the bulk of a 25-billion-dollar standbyloan in 2008.dpa rh nprAuthor: Robert Hodgson
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