Hungary – In face of its left-wing opposition (Klára Dobrev’s shadow cabinet) weaponizing the issue of Hungary joining the euro zone, Viktor Orbán generally chooses to buy time, with some members of his cabinet (such as Finance Minister Mihály Varga) nonetheless issuing more univocal statements against a quick introduction.
While often found at odds with Varga, György Matolcsy, Governor of the central bank (in Hungarian: Magyar Nemzeti Bank – MNB), in response to a question from a member of parliament belonging to the governmental party, has also stated that “the country’s economy is not yet at the right level of euro maturity”.
According to Matolcsy, at the moment, in the high inflation environment of recent years, even the nominal Maastricht criteria are not met, as both inflation and long-term borrowing rate indicators are above the upper limit.
The debate surrounding euro introduction in the non-euro economies of Central-Eastern Europe within the EU has been fuelled by conflicting interpretations of the outcome of Slovenia, Croatia and Slovakia joining the euro. While the Slovenian results are generally met with approval, it is often stressed that in Slovakia, introducing the euro did not allow to avoid bottlenecks to value added growth and a decline in total factor productivity. As a result, in terms of GDP growth indicators of recent years, Slovakia is outperformed by non-euro Hungary and Poland.
As pointed out by Index, quoting from financial analyst Szabolcs Pásztor,
“The euro alone will not bring higher living standards and competitiveness, it is only an opportunity to catch up. The world economy is full of cases where a small and open country has caught up and become competitive with its own currency, such as Singapore or South Korea.”
According toPásztor, it is clear that in the midst of the crises of the 2020s, it is the fundamentals of the member states that will be decisive, not the existence of the euro. (…) So it cannot be said that countries using the euro are more protected and perform better. The euro is a powerful symbol and proof of modernity and EU membership, but it is worth thinking realistically about the single currency.