Hungary parliament approves fiscal watchdog curbs

BUDAPEST, Dec 6 (BestGrowthStock) – Hungary’s parliament on Monday
approved a proposal to strip the Fiscal Council, an independent
body critical of budget trends, of its staff and change its
members.

The Council is led by three independent economists and has
a staff that publishes analyses on the feasibility of
government budget plans and their compliance with rules
designed to keep the fiscal gap low and ensure state debt
levels decline.

The body has called attention to fiscal sustainability
risks as the government opens room for a cut in the budget
deficit and personal income taxes in the 2011 budget with
one-off measures, including windfall taxes on certain corporate
sectors.

According to the proposal of parliament’s budget committee
approved on Monday, the governor of the central bank, the
chairman of the State Audit Office and a third person will be
the new members of the Council.

The proposal, which the committee said would bring savings,
also strips the Council of its own staff. The new members of
the panel have their own crew.

Plans to cut the role of the Council have contributed to
the fall of Hungarian assets in the past weeks when the debt
problems of euro-zone states increased risk aversion in
markets.

The government’s unorthodox economic policy has confounded
investors and curbed the Constitutional Court’s jurisdiction
over budget issues and plans to allow a parliament committee
appoint all new central bankers next year.
(Reporting by Sandor Peto; Editing by Padraic Cassidy)

Hungary parliament approves fiscal watchdog curbs