Development and Finance from issue 2009/3

Dóra Győrffy

Hungarian Budget Council

- Abstract -

JEL H-300

For quite some time now both Hungarian and international experts have been proposing that such an institution be set up, but in the past few years such plans have foundered, as a rule, thanks to party squabbling. Hungarian politicians were rather reluctant to take the idea on board that their plans and commitments should undergo intense scrutiny by an independent body. However, the global financial crisis has made them agree to the proposal which they previously rejected, and the setting up of the Budget Council has become a key prerequisite of the financial rescue package under the agreement reached with the International Monetary Fund and the European Commission. Although the bill was adopted with a simple majority of votes instead of being a two-thirds act that analysts were keen to see, the setting up of a supervisory body to monitor responsible budget management is definitely a step forward, especially in light of practice in previous years. Nevertheless, establishing a new institution is no guarantee per se that it will be successful. In this case, the objective is to weed out or at least curb the government’s tendency to overspend and to start reducing public debt.

Dóra Győrffy, PhD, assistant professor (University of Debrecen)

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