BUDAPEST | Fri Aug 16, 2013 3:40am EDT
BUDAPEST Aug 16 (Reuters) - Hungary can cover the funding the European Union withdrew from the state budget "for months", and at least until Sept. 9 when it hopes to reach a deal to restore the subsidies, an official said.
On Monday, Hungary said the European Union had put on hold 13 out of 15 programmes it funded after it found alleged irregularities in Hungary's financial control systems, but an EU official said on Wednesday there was no evidence of fraud.
It is not clear when the European Union stopped the financing, which it provides to Hungary, and other member states in central and eastern Europe, for transport, environmental, water treatment, health and tourism projects, among others.
Nandor Csepreghy, a deputy state secretary at the National Development Ministry, told business daily Vilaggazdasag in an interview published on Friday the suspended payments totalled around 400 billion forints ($1.77 billion).
"The liquidity of the (state) budget is such that it can handle this situation for months," Csepreghy said.
"Our aim is to agree on the lowest possible sanction with the European Commission."
He said the government expected to reach agreement to regain access to the suspended financing at a meeting with EU Commissioner for Regional Policy Johannes Hahn on Sept. 9.
Budapest has said it is ready to accept an EU fine of between 50 and 100 billion forints to regain access to the money, vital to the country's economy.
The Hungarian official said the government took over the management of 59 EU-funded projects from local governments because they failed to manage the programmes properly. There were severe delays in implementation, he said.
Between 2007 and 2013, Hungary was entitled to receive 8.2 trillion forints in EU subsidies for development programmes.
Csepreghy said 95-96 percent of these funds had been allocated and the government wanted to allocate the remaining funds worth 400-500 billion forints by mid-September.
From Jan. 1, 2014, the allocation of EU funds will be centralised under the prime minister's office as the institutional framework will be revamped, he said.
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