video transcript

European Union finance ministers meet in Brussels. On the agenda, Hungary's failure to deliver on a promise to keep its fiscal deficit below the EU threshold of 3 percent of Gross Domestic Product. As punishment the finance ministers have suspended half a billion euros in aid to Hungary from next year. Olli Rehn is EU Commissioner on Economic and Monetary Affairs. (SOUNDBITE) (English) EU COMMISSIONER ON ECONOMIC AND MONETARY AFFAIRS OLLI REHN SAYING: "This provides a strong incentive for Hungary to conduct sound and sustainable fiscal policy. Effective action by the Hungarian authorities in response to the new EDB recommendations, will lead to the lifting of suspensions before they become effective." Hungary has until June to show it has sorted its budget shortfall. The EU fears Hungary's deficit could climb further unless the country finds new ways to cut spending. Its finance minister was confident his country would meet its obligations in time. (SOUNDBITE) (English) HUNGARIAN FINANCE MINISTER GYORGY MATOLCSY SAYING: "I am fully convinced, I am hundred percent confident of that. Because with the help of the convergence programme all the necessary measures will be in the convergence programme. They will be assessed and evaluated by the Commission and by the final assessment will lift the suspension of the cohesion fund. I am hundred percent optimistic about that." Hungary's problems are small when compared to Spain, which has also missed its budget deficit reduction target for this year. The Spanish finance minister told the meeting his government was working hard to meet its goal. (SOUNDBITE) (Spanish) SPANISH FINANCE MINISTER LUIS DE GUINDOS SAYING: "We reiterated Spain's commitment to meet the 3 percent target for 2013. The only thing Spain was asked for was an adjustment to its path towards the 3 percent level, around 0.5 percent for 2012. Spain is completely committed to this budget adjustment." The ministers also discussed the thorny issue of a European financial transaction tax. Britain is one of several governments to object to such a levy. And with disagreements over how such a plan would work, a decision isn't expected any time soon. Andrew Potter, Reuters