2009/103/EC: Council Decision of 4 November 2008 granting mutual assistance for Hungary
Date: 2008-11-04
Institutions: Council of the European Union
Subjects: Hungary, financial market, loss, public administration

6.2.2009

EN

Official Journal of the European Union

L 37/7

COUNCIL DECISION

of 4 November 2008

granting mutual assistance for Hungary

(2009/103/EC)

THE COUNCIL OF THE EUROPEAN UNION,

(3)

Having regard to the Treaty
Community, and in particular Article 119,

establishing the European

Having regard to the recommendation from the Commission
made after consulting the Economic and Financial Committee,

(4)

Whereas:

The Council is reviewing on a regular basis the economic
in particular in the
policies implemented by Hungary,
context of the annual reviews of Hungary’s update of
the convergence programme and implementation of the
National Reform Programme,
review of
progress made by Hungary related to the Council recom­
mendation on the Excessive Deficit Procedure, as well as
in the context of the Convergence Report.

the regular

the

in the

expected improvement

current
Despite
financing needs in
account, Hungary faces substantial
2008 and 2009 (estimated at around EUR 20 billion)
as recent developments on the financial market suggest
that the capital and financial account could substantially
deteriorate, with the
acceleration of net portfolio
outflows.

(1)

(2)

Since mid-2006,
the Hungarian authorities have been
making significant efforts to correct the country’s accu­
imbalances. Despite the
mulated external and internal
two years,
tangible
general
including
the
government deficit and a gradual decrease
in the
current account deficit, the Hungarian financial markets
have come under severe stress from early October 2008.

achieved over

reduction in

results
a

significant

last

the

In October 2008 the Hungarian authorities adopted a
comprehensive economic policy programme designed
to restore investor confidence and to alleviate the stress
experienced in the preceding weeks in the Hungarian
financial markets. That programme includes measures
to secure adequate liquidity and financing for
the
banking system, actions to ensure adequate capitalisation
of banks, as well as plans to ensure fiscal sustainability
and contain financing needs. In particular, the Hungarian
Government revised its deficit target for 2008 to 3,4 %
of GDP compared to a budgeted 4 % of GDP and for
2009 from 3,2 % of GDP to 2,6 % of GDP. This
economic programme
fiscal
targets will be reflected in the government’s budget as
well as
in the convergence programme which also
contain other policy measures and structural reforms.

and in particular

the

(5)

(6)

The Hungarian authorities have requested substantial
financial assistance from the Community,
international
institutions and other countries to support
financial
balance of payments sustainability and to bring inter­
national currency reserves to a prudent level.

There is a serious threat to the Hungarian balance of
payments which justifies the urgent granting of mutual
assistance by the Community,

HAS ADOPTED THIS DECISION:

Sole Article

The Community shall grant mutual assistance to Hungary.

This Decision is addressed to the Member States. It shall be
published in the Official Journal of the European Union.

Done at Brussels, 4 November 2008.

For the Council
The President

C. LAGARDE