BUDAPEST-The new government in Hungary plans to save at least euro 300 million ($490 million) by streamlining operations and selling off parts of a property portfolio likely to be worth billions of dollars. The move to save costs is an attempt to meet Maastricht criteria necessary for Hungary to introduce the euro as planned in 2010.
"If all the steps that we now foresee are actually implemented, we could definitely achieve savings of euro 300 million [$490 million] up front as a result," a government spokesman says. The government is now conducting an audit that is due for completion at the end of August.
The audit of institutions and at least 100 properties will be conducted by external consultants and top officials from all ministries. One option is to close human resource departments held across ministries and consolidate them into one operation in one building. "With this kind of centralization, the same work could be performed by 20-25% fewer people," according to the government spokesman.
He also notes that significant savings could come from the sale of buildings that now function as government offices but would become redundant as a result of the streamlining process. The combined value of such buildings, including a number of centrally located 19th-century palaces, is likely to amount to billions of dollars. "A major part of these real estate properties are unsuitable for the housing of ministries and government offices," the spokesman says, adding that the creation of a completely new government district, possibly on the outskirts of Budapest, cannot be ruled out over the longer term.
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