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Hungary econ min says no need for austerity -TV2

Published 09/16/2010, 01:37 AM
Updated 09/16/2010, 01:40 AM

BUDAPEST, Sept 16 (Reuters) - There is no need for austerity measures to cut Hungary's 2011 budget gap below 3 percent of gross domestic product as a bank tax will help the government meet the target, Economy Minister Gyorgy Matolcsy told TV2 on Thursday.

Matolcsy said the International Monetary Fund (IMF) wanted Hungary to launch a 300 billion forints austerity package but the government said this was not possible, and therefore it imposed a tax on the financial sector this year and in 2011.

Hungary's talks with the IMF collapsed in July.

Matolcsy reiterated the government was committed to the below 3 percent deficit goal next year even if the European Union does not accept a change in the accounting rules of the costs of pension reform into the deficit and debt numbers.

Matolcsy also said the government would introduce a 16 percent flat personal income tax from Jan 1 2011, but it was to be seen whether it can be done in one, two or three stages.

(Reporting by Krisztina Than)

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