Hungary to revise upwards cash-based deficit target as govt boosts role in energy, broadcasting sectors

By bne IntelliNews May 27, 2014

Hungary's government plans to raise the cash-based budget deficit from current HUF 984bn (EUR 3.24bn) to over HUF 1,100bn  in order to ensure the purchase of regional gas distributor Fogaz and terrestrial broadcaster Antenna Hungaria, MTI news agency reported, citing an economy ministry official.

The cash-based fiscal gap would increase to 3.6% of GDP this year, the deputy state secretary at the economy ministry, Peter Beno Banai, said. However, under the EU methodology, there will be no impact on the deficit as the government is exchanging cash for shares, thus the gap is expected to remain bellow the reference value of 3% of GDP.

State-owned Hungarian Electricity Works (MVM) closed a HUF 41bn deal for the acquisition of a 49.83% stake in regional gas distributor Fogaz from German RWE in April 2014. According to a government decision published on March 25, MVM is to buy out the remaining Fogaz stake held by the Budapest local council by July 31, 2014. The purchase is part of the government's plans to raise the state's role in the energy sector.

Broadcaster Antenna Hungaria, on the other hand, is a subsidiary of French broadcast network group TDF. The owner launched the sale of 100% of Antenna Hungaria last year. The Hungarian state participated in the sale and as a result, the state-owned provider of governmental information and telecommunication operations and services - NISZ, will acquire Antenna Hungaria by the end of May.

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