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EU Threatens To Freeze Hungary Aid Over High Deficit

European Commissioner for Economic and Monetary Affairs Olli Rehn
The European Commission is threatening to withhold $655 million in EU development funds from Hungary because the Hungarian government has failed to reduce its deficit.

EU Economy Commissioner Olli Rehn said on February 22 that any such suspension of aid to Hungary would apply from January 2013.

The EU has been pressuring Budapest to cut its budget deficit, which for several years has been breaking the bloc's limit of 3 percent of economic output.

According to the latest available figures, Hungary has already received about $2.5 billion of EU funds.

The EU is also in a broader conflict with Hungary over concerns that the Central European country's new constitution could lead to restrictions on civil liberties.