Primary aim of reducing deficit is to cut debt, Varga says

The government's primary aim in reducing the budget deficit was not to free Hungary from the European Union's excessive deficit procedure, but to reduce the country's debt, enabling Hungary to finance itself, National Economy Minister Mihály Varga said on Wednesday. The minister was speaking after the European Commission announced its recommendation to lift the excessive deficit procedure, which had been in force against Hungary since 2004. Varga said that the Commission, when making its recommendation, appreciated the Hungarian government's freezing budget reserves and ruling that one-off investment projects should be financed from one-off sources. He added that state projects now underway would be maintained and financed from alternative resources. He confirmed that the government is committed to keeping the budget deficit below 3% of GDP even after 2014. "It is not the government's aim to take the opposite direction with the opportunity it has now been given", Varga said. The minister cited low inflation, an improved growth rate, a positive foreign trade balance and improving employment, and voiced hope that "in the second half of the year the economy would grow more markedly after modest growth in the first six months".