Finance minister optimistic about growth, despite problems with EU and Covid

HUNGARY - In Brief 12 Jul 2021 by Istvan Racz

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This morning, finance minister Varga was quoted in the press as saying that the domestic economy is set to grow by 6.5% this year (more than the 4.8% on which this year's budget was originally based, the 4.3% predicted in late April or the 5.5% set as a target a few weeks ago) according to latest data, and it could grow by over 6% even if Hungary did not get any transfer from the EU this year. The Finance Ministry, he said, has got plans on what to do if financial transfers from the EU did not arrive.Why is such a statement from Mr. Varga timely? This is because today is the deadline for the EU Commission's approval of national plans for the utilisation of the RRF, the EU's extraordinary transfer plan, under which Hungary would get HUF 2511bn (4.3% of one year's GDP) between 2021-2023 in transfers (= development grants) from the EU. The rumour and then the news of recent days has been that the Commission still has problems with the Hungarian plan and expects further measures and guarantees from the government to secure that EU funds will be utilised in an orderly manner. The government, represented this time by cabinet minister Gulyás, has acknowledged the existence of the problem, even adding that the Commission has become especially hostile after the recent approval by Hungary's parliament of what is commonly described as an 'act on pedophilia', the piece of legislation that has been since then described as one including a homophobic clause by the European Parliament and many others.What exactly the Commission wants from the government is not publicly known. The EP expressly wants Hungary to scrap this law or the EU Commission to stop financing Hungary - the latter t...