Hungary should achieve a fiscal adjustment of 0.5% of GDP this year and of 0.6% in 2016 to ensure reaching the medium-term objective of a structural deficit of 1.7% of GDP by 2017, the European Commission has said. The EC recommended that Hungary take measures to restore normal lending to the real economy and remove obstacles to market-based portfolio cleaning. A considerable reduction of contingent liability risks linked to increased state ownership in the banking sector was also advised. The EC called for reducing distortive sector-specific taxes, removing the unjustified entry barriers in the service sector, reducing the tax wedge for low-income earners, including by shifting taxation to areas less distortive to growth, and continuing to fight tax evasion. Hungary should strengthen structures in public procurement that promote competition and transparency, and further improve the anti-corruption framework, it said. It recommends reorienting the budget resources allocated to the public work scheme to active labour market measures. Hungary should increase the participation of disadvantaged groups, particularly Roma, in inclusive mainstream education and improve the support offered to these groups.