Awwal 01, 1432, Feb 04, 2011, SPA -- Hungary's public debt will fall significantly in the coming years as the government implements lasting structural reforms and creates more jobs, AP quoted the economy minister as saying on Friday. In a letter to the European Commission, Economy Minister Gyorgy Matolcsy said the government aims to push national debt below 70 percent of GDP _ from above 80 percent now _ and create 300,000 jobs by the end of 2014. The structural measures to be announced later this month will show Hungary's «commitment toward sustainable public finances,» Matolcsy wrote to EU monetary affairs commissioner Olli Rehn. Instead of applying austerity measures, Prime Minister Viktor Orban's government has lowered personal tax rates and increased levies on some companies to balance public finances. The International Monetary Fund has described the plan as «bold but also risky.» In 2008, Hungary was rescued from insolvency by a ¤20 billion ($27 billion) loan from the IMF and other lenders. Matolcsy has also spearheaded the near-total dismantling of Hungary's private pension scheme, which was launched in the late 1990s and holds some 3 trillion forints (¤11.1 billion, $15.1 billion) in savings, most of which will soon be transferred to state coffers. Orban said the money would be used to pay current pensions and help pay down Hungary's debt. In a report on Hungary released Thursday, the IMF outlined the risks it sees in the economic plan. «The government's strategy is risky as it needs the otherwise costly tax cuts to trigger a strong response in economic activity, which may not materialize,» the IMF said, urging Hungary to focus instead on reforms and cutting expenditure. -- SPA
