Publication: Magyar Közlöny
Issue: MK-2009-42 (Year: 2009, Number: 42)
Era: 2004-2010
Section: 
Paragraph Index: 178

2009. in four originals in the English language. REPUBLIC EUROPEAN OF HUNGARY COMMUNITY Rep re sen ted by Rep re sen ted by Eu ro pe an Com mis si on Já nos Ve res, Dr. Jo a qu ín Al mu nia Mi nis ter of Fi nan ce Mem ber of the Eu ro pe an Com mis si on NATIONAL BANK OF HUNGARY Rep re sen ted by And rás Si mor Go ver nor of the Na ti o nal Bank of Hun ga ry ANNEX SPECIFIC ECONOMIC POLICY CRITERIA At the time of the Commission staff review that will precede the decision on the disbursement of each instalment, the Hungarian authorities are committed to have accomplished progress in fiscal consolidation and expenditure control, fiscal governance reform, achievement of price stability, banking sector stability, financial sector regulation and supervision reforms, as well as structural reforms. In view of the significantly deteriorated economic outlook for 2009 in the context of the global financial crisis, the 2009 ESA deficit target of 2.6% of GDP referred to in the Memorandum of Understanding, as far as the conditions for the release of the third and fourth instalments of the Community assistance are concerned, shall be replaced by a new target of 2.9% of GDP. The corresponding cash-flow deficit target for the central government subsector is 2.7% of GDP. Thus progress shall be monitored against this basis and reviewed before the release of the third and fourth instalments. Furthermore, the specific economic policy criteria spelled out in the Memorandum of Understanding shall be augmented by the following actions: Third instalment A: Fiscal consolidation – Full implementation of the recently announced corrective package of 0.7% of GDP. These deficit-reducing measures notably include: (i) further cuts in the operational expenditures and chapter-administered appropriations of budgetary chapters; (ii) reducing the national top-up in agricultural subsidies; and (iii) effectively tightening of the eligibility criteria for disability benefits and rehabilitation allowances. C: Financial sector regulation and supervision – Revision of the Financial Stability Act, in line with agreed EU principles and in conformity with the guidance provided by the Commission on the application of EU state aid rules, including such amendments as: (i) aligning the expiration date of the recapitalisation measure with that of the guarantee measure; (ii) specifying that the option granted to shareholders of a troubled bank to sell their share to the state should be exercised at a price reflecting the current and prospective conditions of the bank as determined by an independent third party jointly selected by the central bank and the HFSA. D: Structural reforms In line with the Government announcement of 16 February: – Submission to the Parliament of a draft law aiming to improve the financial sustainability of the pension system, including (i) a move to increase the weight of inflation-related adjustment in the indexation mechanism; (ii) the abolition of the 13th month pension for new beneficiaries; (iii) containing the size of the last phase of the pension correction programme; and (iv) a 3-year increase in the mandatory retirement age between 2016 and 2025. – Submission to the Parliament of draft laws to improve the financial sustainability of the social support system, including (i) the tightening of eligibility for housing subsidy programmes and reducing interest subsidies for housing loans as well as (ii) the achievement of savings by reforming the cash support system for the first years of parenthood, also by taking into account the time during which the eligible person has been employed when defining the length of the salary related child allowance (GYED). 2009/42. szám Fourth instalment A: Fiscal consolidation – Incorporation of the budgetary measures in the 2010 budget which underpin (i) the planned reforms in the social transfer system leading to lower-than-planned social spending from 2010; and (ii) reforms for the sub-national sector, including effective rules to encourage further progress in the joint service provision of local governments as well as in the establishment of joint administrative offices. D: Structural reforms – Adoption by Parliament of a draft law aiming to improve the financial sustainability of the pension system, including (i) a move to increase the weight of inflation-related adjustment in the indexation mechanism; (ii) the abolition of the 13th month pension for new beneficiaries; (iii) reducing the size of the last phase of the pension correction programme; and (iv) a 3-year increase in the mandatory retirement age between 2016 and 2025. – Adoption by the Parliament of draft laws to improve the financial sustainability of the social support system, including (i) the tightening of the eligibility of housing subsidy programmes and reduction of interest subsidies for housing loans as well as (ii) the achievement of savings by reforming the cash support system for the first years of parenthood, also by taking into account the time during which the eligible person has been employed when defining the length of the earning related child allowance (GYED). KIEGÉSZÍTÕ EGYETÉRTÉSI MEGÁLLAPODÁS AZ EURÓPAI KÖZÖSSÉG ÉS A MAGYAR KÖZTÁRSASÁG KÖZÖTT Addendum az Egyetértési Megállapodáshoz

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