Forex news, euro rate. Today European Commission has made a decision to suspend 495 mln. euro support of EU to Hungary, having stated that the country has not done enough to reduce the enormous state deficit. Today’s decision concerns Cohesion Fund that supports poor regions of EU countries. Budapest is supposed to gain support in 2013, which is to be finally approved by EU countries in March.
"Facts give evidence that the economic policy of the government is following the right direction, for last year economic growth has exceeded the average in EU. At the same time, national debt is to be constantly reduced," explained Hungarian government.
"It is not clear why the Commission does not consider the following facts: in 2011 Hungarian budget deficit is below 3% of GDP, for the first time since the country entered EU in 2004, and it will remain at this point till the end of the year," highlights the country’s government. Budget deficit is one of the lowest among 27 members of EU.
However, the Commission claims that in 2011 Hungarian budget deficit if below 3% of GDP because emergency measures enabled the country to hide financial failures. Without such measures, the country’s deficit will amount to about 6%.
European Commission has already warned about possible sanctions towards the country, which is experiencing lawsuit for breaking the Stability Pact soon after it joined EU in 2004. Hungary may become the first country, to which such measures are applied.
How will this influence euro rate? Analysts of Masterforex-V Academy make the following suggestions about the mid-term trend:
1) Rising HOUND within MID-term trend с(С) n4, full cycle, а(С) 1.2974-1.3291
2) red.с / red.с(С), looking for falling reversal wave А + FZR
3) add bullish NK 1.2974/1.3211, when it is passed – D1 will descend
pivot 1.3233
