Published: November 22 2023
While some political actors believe that introducing the euro in the longer term could be beneficial for Hungary, others have expressed reservations. Finance Minister Mihály Varga stated that it was premature to discuss Hungary joining the euro area and emphasized the need to focus on achieving a balanced position in the economy. Minister of Economic Development Márton Nagy also expressed that the euro is not a short to medium-term priority for the government and that there is no ambition to adopt it. Nagy highlighted potential disadvantages of the euro during a recession for a country like Hungary.
The question of whether Hungary will introduce the euro remains uncertain. According to György Matolcsy, the country's economy is not yet at the right level of euro maturity and does not meet the required criteria. Perspectives from political actors vary, with some advocating for a potential introduction in the longer term and others expressing reservations and prioritizing other economic considerations.
Questions & Answers
Will Hungary introduce the euro? There has not been an official statement on the probabilities of introducing the euro to replace the Hungarian forint. The Governor of the National Bank of Hungary stated that the country's economy is not yet at the right level of euro maturity.
What conditions are necessary for the introduction of the euro in Hungary? According to the Governor of the National Bank of Hungary, the country's economy needs to reach the right level of euro maturity. Currently, the Maastricht criteria for joining the euro area would not be met. The central bank has developed a set of conditions called Maastricht 2.0, which takes into account new real criteria in addition to the original criteria.
Are the nominal Maastricht criteria being met in Hungary? No, even the nominal Maastricht criteria are not being met in Hungary due to the high inflationary environment of recent years. Both Hungary's inflation and long-term interest rate ratios are above the upper bound.
What is the Finance Ministry's stance on the introduction of the euro? According to the Finance Minister, it is premature to talk about Hungary joining the euro area at the moment. The focus is currently on achieving a balanced position. The minister also mentioned that having the euro now would mean taking fewer risks for the economy.
Does the Hungarian government have plans to adopt the euro in the short to medium term? No, the Minister of Economic Development stated that the euro is not an issue in the short to medium term for the Hungarian government. The government has no ambition to adopt the euro at this time, but he did not rule out the possibility in the longer term.