Merkel praises Hungary's efforts to slash deficits
German Chancellor Angela Merkel on Wednesday praised Hungary's efforts to meet European Union deficit criteria, dpa reported.
"In the last months I think Hungary has taken energetic steps to meet the deficit reduction demands, and we are in joint discussions over this," Merkel said during Hungarian Prime Minister Victor Orban's inaugural visit to Berlin.
Hungary does not use the euro currency but is bound by the rules of the EU's Stability and Growth Pact, which limits state deficits to 3 per cent of gross domestic product (GDP).
Austerity measures under Hungary's previous socialist-backed government brought the budget deficit down to 4 per cent of GDP in 2009.
Orban said the country was on its way to becoming a "world champion" at cost-cutting, adding that Germany's aim to apply financial discipline whilst stimulating the economy served as a good example to his country.
"If you look at everything that Hungary has done in the past years to achieve financial stability, this can without exaggeration be described as a world record," the premier said.
Orban had vowed on Tuesday that Hungary would meet the 3.8-per- cent deficit limit set by the International Monetary Fund (IMF), after three-way talks with the IMF and the European Union collapsed at the weekend.
IMF and EU delegations were in Budapest for a scheduled review under the terms of a 25-billion-dollar bailout package Hungary received in 2008, but complained that the government appeared reluctant to make additional spending cuts.
Instead, the Hungarian government plans to reduce its deficit by introducing a banking tax.