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The National Assembly Once Again Backs the Amendment to the Budget Implementation Act

Following a deferral veto by the National Council, the National Assembly reconsidered and supported the amendment to the Implementation of the Budget for 2023 and 2024 Act. In its response to the submitted veto, the Government emphasized that the adopted budget revision enables adequate financing of all highlighted areas while ensuring the long-term sustainability of public finances.

Despite the objections of the National Council, the approved budget revision for 2023 is aimed at supporting the economy and assisting citizens. Since the market conditions for energy sources are significantly less unpredictable today compared to the time in the fall when the budget for 2023 was prepared, the reserve for this purpose was adjusted to the actual market conditions in the revised budget.

The level of expenditure for investments and investment transfers remains the same in the budget revision as planned in the amended budget for 2023. This will be achieved through the utilization of European funds from the 2014-2020 multi-annual financial framework, the 2021-2027 multi-annual financial framework, and the Recovery and Resilience Mechanism. Additionally, the budget revision includes development incentives for the economy.

The Government firmly rejected the claims that representative associations of municipalities were not treated as equal partners. Reaching an agreement on the amount of the lump sum expenditure is a priority for the Government, especially during the process of preparing the state budget. The Government is in a challenging position as it seeks to reach an agreement while bearing responsibility for the sustainability of public finances. Considering the country's development ambitions and legal obligations, along with fiscal commitments, the Government is compelled to achieve an agreement which will be sustainable for public finances at both the national and local levels in the coming years. In 2024, fiscal rules will come into effect again.

In addition, municipalities have already been receiving additional funds from the state budget based on current regulations. When negotiating the agreement on the amount of the lump sum expenditure or its increase to EUR 700, the Government has already taken into account the wage increase agreed upon last October, as well as an inflation rate of 8.1 percent. Among other things, funds for balancing the municipalities’ development levels, which will be higher this year than they were last year, as well as co-financing programs and funds for investments at the local level have also been ensured in the revised budget.

Furthermore, the determination of the maximum retail price of natural gas and electricity, which also applies to providers of publicly valid education programs, has positively influenced municipal expenses. This regulation will be valid throughout 2023. The Government has also prepared various measures to alleviate the cost increases for parents in kindergartens, and the thresholds for social transfers are increasing, making them more accessible to parents.

According to the Government, the approved budget revision for 2023 enables adequate funding for all areas highlighted in the proposal of the veto deferral, while simultaneously ensuring the long-term sustainability of public finances.