„The next time someone tells you that the European Union is a club of equals where the rules apply uniformly to all member states, direct them to the case of Hungary in 2012. The European Commission is threatening to suspend €495 million of EU aid to Hungary—0.5% of Hungarian GDP—unless the country takes "decisive action" to reduce its budget deficit. The rap on Hungary is that its fiscal situation is about to spiral out of control, and that recent changes to the Hungarian Constitution threaten democracy.
The Commission's assessment isn't entirely off the mark. Hungary's economy isn't growing, and public debt is about 80% of GDP, with more than 40% of it denominated in foreign currencies. Prime Minister Viktor Orban has tried to narrow the fiscal gap with a series of one-off levies that are inadequate to repair Budapest's finances—and mostly hit sectors dominated by foreign corporations.
But there's a whiff of hypocrisy in the Commission brandishing the budget rod on Hungary. EU law sets a deficit ceiling of 3% of GDP, but few members meet that criterion today—or have ever met it consistently. The Commission says it expects Hungary's budget hole in 2013 to be all of 0.25 percentage points of GDP above the threshold. Even a 3.25% deficit puts Hungary less in the red than the likes of Germany, the Netherlands and Britain.”