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Vienna, 14 March 2012 Fekter: “No double standards when assessing compliance of EU member states” ECOFIN freezes cohesion fund allocations for Hungary

At the council meeting of EU finance ministers (ECOFIN) on Tuesday, 13 March 2012, in Brussels, EU finance ministers agreed to impose sanctions on Hungary due to its excessive deficit. ECOFIN decided to partially suspend cohesion fund allocations for 2013. The volume of the suspended funding totals EUR 495 million or 0.5 of Hungarian GDP. Pursuant to EU council chair Margrete Vestager, the decision could still be rescinded if Hungary makes the recommended corrections to its budget.

In advance of the meeting, Austrian Finance Minister Dr. Fekter had already expressed criticism regarding the plans to impose sanctions. In particular, Dr. Fekter called for the EU to treat member states equally in respect of budget discipline: "Looking at the pressure being put on Hungary, the feeling I am getting is that a double standard is being applied here." Particularly as compared with the case of Spain, the measures planned appeared to Dr. Fekter to be “too strict. In 2011, Hungary was still running a budget surplus. Unfortunately, growth did not develop as anticipated, and for that reason a downward adjustment to Hungary’s figures had to be made.” Dr. Fekter stated further: “We had very intense debates about Spain. And in the case of Spain, we didn’t immediately go for sanctions.” Rather, “Spain was given the opportunity to be more ambitious” in its budget planning for 2012 and was given until 2013 to bring its deficit down to three percent.

Following intense debate, Finance Minister Dr. Fekter agreed to the sanctions: “Austria would have preferred to see Hungary given more time to make adjustments. At the same time, however, our European community, our network of member states, must strive to ensure that the rules we make for ourselves are in fact complied with."

Hungary has confirmed that it is willing to implement all of the recommendations by May. ECOFIN will take up this issue again on 22 June. “I am optimistic that Hungary will put forth the necessary effort and will avert these sanctions on its own initiative”, Austrian Finance Minister Dr. Fekter stated in closing. al basis and no additional costs will arise for taxpayers."