Publication: Magyar Közlöny
Issue: MK-2010-19 (Year: 2010, Number: 19)
Era: contemporary
Section: A Kormány 28/2010. (II. 16.) Korm. rendelete
Paragraph Index: 18

13. All notices in relation with the present Supplemental Memorandum shall validly be given if in writing and sent to: For the European Union European Commission Directorate General for Economic and Financial Affairs B–1049 Brussels Fax No.: (+32-2) 296.48.85 For the Ministry of Finance of Hungary Ministry of Finance of Hungary József nádor tér 2–4, H–1051 Budapest Fax No.: (+36 1) 79 50 327 For the National Bank of Hungary National Bank of Hungary Szabadság tér 8–9, H–1054 Budapest Fax No.: (+36 1) 428 25 23 Done in Brussels on 21/01/2010 and in Budapest on 15/01/2010 in four originals in the English language. REPUBLIC OF HUNGARY EUROPEAN UNION Represented by Represented by EUROPEAN COMMISSION Péter Oszkó Joaquín Almunia Minister of Finance Member of the European Commission NATIONAL BANK OF HUNGARY Represented by András Simor Governor of the National Bank of Hungary ANNEX SPECIFIC ECONOMIC POLICY CRITERIA At the time of the Commission staff review that will precede the decision on the disbursement of each sub-tranche of the fourth instalment, the Hungarian authorities are committed to have accomplished progress in the areas of fiscal consolidation and expenditure control, fiscal governance reform, financial sector regulatory and supervisory reforms, and other structural reforms. Fourth instalment – first sub-tranche A: Fiscal consolidation – Confirmation of the general government 2009 deficit target of 3.9% of GDP supported by achieving the official 2009 cash flow deficit target for the central government (of 3.8% of GDP). – Implement expenditure controls, including through the newly established system of treasurers, to ensure the achievement of the 2010 general government deficit target of 3.8% of GDP. Take steps to ensure that budgetary reserves remain at a sufficiently high level in case of adverse developments. B: Fiscal governance – On the basis of Act CV of 2008 on the legal status and financial management of budgetary institutions and the amended Public Finance Act, prepare and adopt a new government regulation on the general rules of public finance administration (i.e. the implementing rules of Public Finance Act) revamping the budgetary planning and execution of budgetary institutions in order to increase their efficiency and transparency. – Modify the current budgetary process of advance payments by the Government to the final beneficiaries of EU funds (i.e. to establish differentiated advance payment procedures instead of general rules) in order to better target the available sources. C: Financial sector regulation and supervision – Ensure timely notification of state-aid measures adopted in support of the financial sector to the Commission and their compliance with the agreed EU principles and the guidance provided by the Commission. In particular, the Hungarian authorities will make strong efforts to regularize the case of government capital injection to the FHB (by March 2010), in close cooperation with the Commission services. – The Hungarian Financial Sector Authority (HFSA) will take measures to strengthen its consumer protection arm in line with the Draft HFSA Law, expected to be approved by the Parliament in late 2009. In this context, the HFSA Board will adopt the Consumer Protection Strategy and the 2010 Action Plan by end–2009. D: Structural reforms – Continue to implement appropriate measures to ensure the realization of the planned durable savings in the area of long-distance public transport with a view to underpin the reduced budgetary appropriations of at least HUF 30 billion. In particular, tariffs will be increased and subsidies reduced. Moreover, redundant railway lines will be suppressed as announced. Fourth instalment – second sub-tranche A: Fiscal consolidation – The 2009 budget deficit, as validated by Eurostat following the April 2010 Spring fiscal notification, is in line with the general government deficit target of 3.9% of GDP. – Progress is made towards the achievement of the 2010 general government deficit target of 3.8% of GDP, as supported by progress made towards the revised official cash flow deficit target for the central government subsector (3.3%), in particular through a rigorous expenditure control and by ensuring that budgetary reserves remain at a sufficiently high level in case of adverse developments. B: Fiscal governance – On the basis of Act CV of 2008 on the legal status and financial management of budgetary institutions and the amended Public Finance Act, monitor and evaluate the implementation of general rules of public finance administration (i.e. the implementing rules of Public Finance Act) adopted. In order to enhance the proper application of new processes, the authorities make available the necessary technical assistance and resources to budgetary institutions in the context of a targeted project under the State Reform Operative Programme. – After the treasurers` system has been in place for six months, by 30 April 2010 prepare a review of the results and the proper functioning of procedures and identify possible improvements; – MonitorandreportonthemethodsandaverageamountsofadvancepaymentstofinalbeneficiariesofEU funds. C: Financial sector regulation and supervision – The HFSA continues to enhance on-site inspections, particularly with a focus on credit quality and provisioning, and will complete reports on examinations of three large banks by the end-March, 2010. – The HFSA will reflect on 2009 external audit recommendations on improving consumer protection by adopting an action plan for implementing the audit recommendations by end-April, 2010. D: Structural reforms – Continue to implement appropriate measures to ensure the realization of the planned durable savings in the area of long-distance public transport with a view to underpin the reduced budgetary appropriations of at least HUF 30 bn. In particular, steps will be taken to achieve efficiency gains and savings (including on public procurement and staff costs). Progress will be measured against steps taken at the company level and the financial outcome in Q1 2010. Fourth instalment – third sub-tranche A: Fiscal consolidation – Progress in achieving the 2010 deficit target of 3.8% of GDP, as supported by progress made towards the revised official cash flow deficit target for the central government subsector (3.3%), in particular through a rigorous expenditure control and by ensuring that reserves remain at a sufficiently high level in case of adverse developments. – Submission to Parliament of a 2011 draft budget that is fully in line with a general government deficit of below 3% of GDP (ESA definition). B: Fiscal governance – Based on the experiences of the implementation of the fiscal responsibility law, identify its possible inconsistencies with the relevant legislation, and make arrangements to resolve them. – Submit to Parliament the 2011 draft budget in full accordance with the prevailing fiscal framework. – Report on the results of changes in the implementation process of EU funded projects and programmes. C: Financial sector regulation and supervision – The HFSA will finalize Basel II Internal Rating based validation examinations for credit risk and/or operational risk, in cooperation with respective home supervisors, in at least four foreign subsidiaries by end-June, 2010. – The HFSA continues to enhance on-site inspections, particularly with a focus on credit quality and provisioning, and will complete reports on examinations of six large banks by the end-August 2010. D: Structural reforms – Continue to implement appropriate measures to ensure the realization of the planned durable savings in the area of long-distance public transport with a view to underpin the reduced budgetary appropriations of at least HUF 30 bn.ProgresswillbemeasuredagainststepstakenatthecompanylevelandthefinancialoutcomeinH1 2010.” „KIEGÉSZÍTÕ EGYETÉRTÉSI MEGÁLLAPODÁS (Harmadik addendum az Egyetértési Megállapodáshoz) AZ EURÓPAI UNIÓ ÉS A MAGYAR KÖZTÁRSASÁG között

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