"Hungary's Prime Minister, Ferenc Gyurcsány, has announced on Tuesday to deliver a three-package set of proposals to a summit of EU-27 Premiers and Presidents in Brussels on Wednesday. He compiled the fourth package in the spring already and - in view of the current market environment - will submit it again.The PM will propose the following:
1.) Changing the current cohesion policy regulations so that bigger funds may be granted to small and medium-sized enterprises and faster. To this end the PM proposes lowering the budget burden of the affected countries (smaller national contributions) within the different subsidy programmes. Setting up regional crisis management funds (in Hungary) that may concentrate EU tender money currently parcelled out in different areas. The PM also urges EU decision makers to speed up the fund granting process on major projects, because occasionally it drags out for six months.
2.) In times of recession “such as we're looking at right now" the EU should lift the obligation of a continued reduction in the public sector deficit even if a country pushes it to below 3% of GDP. In Gyurcsány's interpretation this means that in periods of economic recession a member state should be allowed “to set its budget (deficit) target freely in a 0-3% range". He added that Hungary's budget gap will be below 3% this year (when adjusted for private pension fund payments).
3.) The European Central Bank (ECB) should be allowed to use the same means of intervention in any EU member state, irrespective of the fact that the country is a member of the euro zone or not. Gyurcsány noted that via a special agreement Hungary “has secured this (allowance) in the past days".
4.) Hungary already made a proposal to Brussels this spring to create new financial regulations and set up a central European supervision."
Source: Portfolio Online Financial Journal
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15.10.2008