Hungarian parliamentary panel reiterates opposition to global minimum tax


Hungarian Prime Minister Viktor Orban attends a dinner at the Prado Museum during a NATO summit in Madrid, Spain, June 29, 2022. REUTERS/Violeta Santos Moura

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BUDAPEST, July 11 (Reuters) – Hungary’s parliamentary economic affairs committee on Monday reiterated ruling party Fidesz’s opposition to a back-to-back global minimum tax that has sparked a dispute with the United States and pressured the forint.

Hungary, already locked in a rule of law debate with the European Union that has hampered access to billions of euros in salvage money, has blocked approval of a global agreement on a rate minimum corporate tax last month. Read more

Nationalist Prime Minister Viktor Orban’s government has argued that approving the tax could hurt Europe’s economy already reeling from soaring inflation and an energy crisis due to war in Ukraine.

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Hungary’s move led Washington to end a 1979 tax treaty, contributing to pressure on the forint, central Europe’s worst-performing currency. It fell to record lows last week despite massive central bank rate hikes. Read more

In a political statement to parliament titled “On the rejection of political pressure against the protection of Hungary’s economic interests”, the economic affairs panel said a European Parliament motion approved last week put pressure on members of the EU opposing measures contrary to their interests.

“Clearly exceeding its authority, the European Parliament would force Hungary to renounce its economic interests,” the statement read, calling on Orban’s government to defend Hungary’s interests “with all legal means” in EU forums. EU.

Opposition lawmakers slammed the text at a committee meeting on Monday, saying it unnecessarily raised political tensions with Western allies when Hungarian markets were fragile.

Some opposition MPs said approval of the document could further undermine Hungary’s negotiating position to unlock EU funds to shore up its economy and markets. Read more

“The large current account deficit and further deterioration in global risk sentiment puts Hungary’s balance of payments funding at risk, putting further pressure on the HUF and credit over the coming quarters,” he said. May Doan of Bank of America in a note.

“There are no better alternatives at this stage than agreeing a deal with the EU on recovery funds, which would provide investors with assurances of additional future inflows.”

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Reporting by Gergely Szakacs; Editing by Nick Macfie

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