The European Parliament has approved the updating of EU budget rules, the aim of which is to make it easier for member states to achieve sustainable economic growth. The focus is on encouraging investments, preserving credibility, reducing deficits and debt, and improving dialogue and responsibility, portfolio.hu said.
The most important changes:
- It is more difficult for the EU to initiate proceedings for an excessive deficit if the investments increase the resilience of the economy.
- THE countries with excessive debt must reduce their debt as a percentage of GDP by an average of 1% per year.
- The deficit cannot exceed 3%, the goal is to reach it within 3 years. Certain exemptions apply to defense investments and developments that increase economic resilience.
- The member states get 3 extra years to reach the goals, they can negotiate with the European Commission, and the national independent budget institutions get a bigger role.
In Hungary, the public debt to GDP ratio was 73.5% at the end of 2023. The deficit in 2023 is 6.7%, which is well above the target level of 3%. The government plans a deficit of 4.5% by 2024. However, this is still higher than prescribed by the European Parliament, so there is a good chance that the excessive deficit procedure will be launched against Hungary as well.
Member States must submit their first national plans by 20 September 2024. The goal is to encourage investments in priority areas, a more personalized approach, and consideration of social aspects.
