BRUSSELS Jan 11 Hungary could lose up to
1.7 percent of its gross domestic product as a result of a
suspension of European Union cohesion funds from 2013 if
Budapest fails to correct its budget deficit, EU officials said
The officials said the 1.7 percent figure would be the total
effect on the Hungarian economy of the funds being suspended in
2013, rather than the precise size of the funds withheld.
Hungary's deficits have exceeded the European Union's
threshold of 3 percent of gross domestic product since it joined
the bloc in 2004 and the European Commission ruled on Wednesday
that Budapest had failed to take effective action to reduce the
deficit by 2012 in a sustainable way.
The Commission said that although Hungary did take steps to
reduce the gap, they were mainly one-off measures that would not
bring the shortfall down in a sustainable way.