Surprising: German companies push for euro in Hungary – will PM Orbán introduce it?
German companies in Hungary are unsure about the future, they push for the euro introduction in Hungary and would like a predictable economic policy. They see 2024 as grim, believe that consumption will fall and struggle with a labour shortage. The German–Hungarian Chamber of Industry and Commerce’s latest business survey did not bring good news.
German-owned companies struggle in Hungary
According to portfolio.hu, the German–Hungarian Chamber of Industry and Commerce found that future economic prospects in Hungary worsened in 2024. In Hungary, 241 German companies filled out the survey’s questionnaires, while the regional number, including 14 more countries, was 1,292.
German companies struggle with weak consumption, high employee costs, labour shortage and euro-forint exchange rate swings. Automation and workers’ training cannot compensate them for the hardships.
The Mercedes-Benz plant in Kecskemét.
Pushing for euro introduction
Furthermore, the CEOs of the German firms believe that the predictability of the Hungarian economic policy decreases and have issues with the rule of law in Hungary, as well. In the latter category, 48% of the leaders are dissatisfied, while that rate was only 36% in 2022. Concerning the Orbán cabinet’s economy policy, the dissatisfaction rate is 60%, while it was only 41% in 2022.
Interestingly, the German company heads regard the Hungarian public administration system as one of the region’s best. Only Estonia, Lithuania and Poland precede our country in that regard. Moreover, they are satisfied with the Hungarian infrastructure, local suppliers and payment discipline.
Because of the exchange rate swings, 73% of the German company leaders would support the introduction of the euro in Hungary. That is the highest rate since 2011. However, the Orbán cabinet made it clear multiple times that they would not like to introduce the common European currency in Hungary even though it has already introduced itself in some shops and cities.
Forint remains Hungary’s official currency. Photo: Pexels
German companies are one of the largest employers in Hungary
There are 2,437 German companies in Hungary, and German-owned enterprises dominate the country’s car manufacturing sector. Their annual investment is 2-3 billion euros, while their added value reaches 10 billion euros. 94% of the Hungarian car manufacturing sector is in foreign hands, and the rate of German companies is 59%.
German companies employ more than 220 thousand workers. That is 10% of the entire workforce active in Hungary’s private sector. In 2024, they plan an average 11% wage increase.
Lots of German pensioners choose to live in Hungary because life is cheaper and safer here. Illustration. Read our article HERE. Photo: pixabay
Read also:
- People have spoken: 2/3 of Hungarians would introduce the euro – Details in THIS article
- When will Hungary introduce the euro and what effect will it possibly have?
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8 Comments
Please don’t. The price of stuff will rocket. And the Hungary is struggling with the cost of living as it is.
The GROWING International WORTHLESSNESS on the International Monetary Markets and Exchange, compounded by the FACT, that Hungary, through the direction & Policies it has undertaken – set in course by the current Prime Minister – Victor Orban and his “Fledgling” Minister of Finance – Mihaly Varga, for Hungary, the Future of Hungary, in this PERILOUS downward trend, it MUST go Euro.
It WILL be increased PAIN on citizens initially, with POSSIBLE inflation being noticed, impacting on price rises, that in time should re-adjust, back to an over-all alignment with the other 26 member country’s of the European Union.
It’s the long term BENIFITS – when Hungary remove the Orban – Fidesz Government, it will have POSITIVE effects, working closely, with the “other” 26 – European Union country’s of Membership.
Hungary can’t SUSTAIN it-self continuing into an ABYSS, under its present currency the forint.
Hungary – will they be ESPELED – out of the European Union ?
WILL the Government of the Day, under it’s current Prime Minister – Victor Orban and his Fidesz Government, will thet choose vote Hungary out of The European Union.
Hungary the increasing FRAGAGILITY rapidly mounting – the growing in-ability of Hungary to SUSTAIN it-self without the TOTAL cataclysmic collapse of it Financially and Economically, it’s complete Infrastructure, what Orban has DELIVERED to Hungary, his Fidesz Government, his Minister of Finance – Mihaly Varga – is BLEAKNESS and Gloom.
The MASSIVE losers already having been SMASHED over the course of 14 years in there Millions, from Cities, to Towns, to Villages and Hamlets – through the “Warped” Political Ideology of Victor Orban, the distillation he continues on with, of DEMOCRACY in Hungary – in there MILLIONS – the citizens of HUNGARY have been, continue to be SMASHED, lessening there quality of life, that will WORSEN.
I’m with Christopher. Croatia is a good case study. They fought a bloody war of independence, only to become just another nondescript province of the E.U., bending to Brussels’ diktats. They introduced the ridiculous concept that is the euro, giving up on its treasured national currency with a long history, only for the prices to be marked up by a huge margin. If Germany can do brisk trade with China and dozens of other non-euro countries, then us keeping the forint should really not matter one bit.
I was in Croatia on vacation in August 2023 for 2.5 weeks. Sadly the price of everything was astronomical. I think we spent at least 3000 Euro more than we expected. A small, 1 person pizza being 28 Euro. Breakfast of eggs and bacon and toast with one coffee each for three people was 60 euro. Overnight parking for our vehicle in Dubrovnick was 100 Euro per night. We spent time getting to know the Croats (some of the nicest people in Europe ) and many of them were wondering if they could remain in Croatia as it was just about unaffordable for them. Our uber driver was an accountant by day, because he could not be an accountant and still afford to eat. Average income for the month is 1000. People were spending less at the shops. I love Croatia but I doubt we will go back.
If Hungary goes on the Euro, the people will suffer terribly and many will lose what savings they have.
Hungary, what Victor Orban and his Fidesz Government have DELIVERED us to today, the overall STATE the country is IN, that daily is WORSENING, the word Sustainability is what Hungarians SHOULD look at.
If we are Expelled or of choice leave the European Union – will in the downward TREND of Hungary, in ALL aspects of life, would life as we know it today, the standards in MILLIONS by the Orban – Fidesz Government there treatment of them, there POLICIES that have SMASHED ruined in millions of cases LIVES – what is SUSTAINABLE ???
HAVE not – that RICH have got RICHER and the POOR got POORER throughout Hungary – through the period in time of 14 plus years, that Victor Orban, as Prime Minister, and his Fidesz Government been in POWER in Hungary ???
Answer – yes and the HORRENDOUS division GROWING of the Rich over the POOR in Hungary – HORRIFYING.
Through the WRONGFUL “paths” direction, the DISTALLATION of DEMOCRACY played out by Victor Orban and his Fidesz Government, the CEASING of Friendships of country’s under Governance practice of DEMOCRACY – in Europe & Globally, the Orban Government achieved “transferring” Hungary back into a Communistic Dictatorship “new wave” is how Orban, would express it, under Laws of COMMUNISIM aligned to Russia & China – PERILOUS.
WILL this “rampant” progress in PLAY – before our vert eyes, in ALL Hungarian faces DAILY – will it bring about SUSTAINABILITY in Hungary ???
Answer – NO.
Will it INCREASE the Value of the Forint ?
Answer -NO.
WILL it Excite and INSPIRE investment from the WEST into Hungary ?
Answer – NO.
Western Companies presently in Hungary – would in time LEAVE Hungary, especially in the automotive sector, with the Chinese looking at building a SIZEABLE plant in Hungary.
If this CHINESE another investment into Hungary was to HAPPEN – the staffing of it, the experts in the operation, who are they along with the major number of “floor workers” – from what country are they going to COME from ?
Answer – China.
Sustainability – the growing PRESSURIZATION on Hungary, the FORCES of pressures will continue to SMASH us – Hungary – that WE will continue to witness the downward TRENDING of us as a country Economically & Financially, the collapsing of Infrastructure – that paints an UGLY picture or FUTURE for our country – Hungary.
WHO besides China or possible most likely in FACT occurring as I commentate adding to the what’s already been acquired through “under the table” or “contra arrangement/agreements” with “Mother Russia – who – what country’s from the WEST would seriously look at INVESTING into Hungary, the “new wave” Governed Hungary that answer to Beijing and Moscow ???
Hungary – we had it from 1945 to 1989 – and the “new wave” version, a somewhat replication of that DARK period in time of our HISTORY, of WHICH – we as a country have “signed off on” agreed to by our ACCEPTANCE of the Victor Orban – Fidesz Governance of Hungary.
Budapest, our Capital, all the Districts that come under Budapest, that total = 23, our Regional Cities, towns and villages inclusive of “growing” Hamlets – what and HOW is going to overall SUSTAIN – life qualities, that in millions of Hungarians LIVES has been “Raped” taken away removed – of NO future by the Orban – Fidesz Government – there acts of POLICY’s – that have DELIVERED broadsheet to us as a country – the GRIM future that is before us, in our lives, in our FACES daily ???
Hungarians we MUST accept what we have, on (2) two occasions VOTED in as our Government, continued to SUPPORT – fooled by mis-leading us, by there PROPAGANDA – there falsification of Truth & Facts – there LIES to us, there FAILINGS to us, in DELIVERING promises, and WHAT as a country, we ARE living in today – that the PRACTICE seeing and watching the BASTARDIZATION effected – inflicted on us, as a country, by the Orban – Fidesz Government that continues on us – Hungary.
We in our MILLIONS shoulder, bear – have voted & chosen to live in and with, now and into the FUTURE, whatever Future that may represent of Hungary.
To join the Eurozone, Hungary will need to meet certain economic conditions. These are set out in Article 140 of the Treaty on the Functioning of the European Union (convergence criteria) and Protocol (No 13) on the convergence criteria (Treaty on the Functioning of the EU).
There are four economic convergence criteria.
1. Price stability
The inflation rate cannot be higher than 1.5 percentage points above the rate of the three best-performing Member States.
2. Sound and sustainable public finances
The country should not be under the excessive deficit procedure.
There is not currently one ongoing for Hungary: https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/stability-and-growth-pact/corrective-arm-excessive-deficit-procedure/closed-excessive-deficit-procedures/hungary_en . HOWEVER our Politicians were sort of enthusiastic as to representing how Hungary would perform – https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023DC0631 …
These rules will be applied more stringently, going forward. Given the rise and, uh. Rise of our national debt, it should be fun to see how our Politicians explain how they plan to bring the rate of spending under control to the EU Commission.
3. Exchange-rate stability
The country has to participate in the exchange rate mechanism (ERM II) for at least two years, without strong deviations from the ERM II central rate and without devaluing its currency’s bilateral central rate against the euro in the same period.
4. Long-term interest rates
The long-term interest rate should not be higher than two percentage points above the rate of the three best-performing member states in terms of price stability. In conclusion: not happening any year soon, we are in too poor an economic state, our Politicians representations notwithstanding (it´s facts and data, stupid!).
In TRUST Norbert, your commentary EDUCATIONAL and Factual.
It’s a complex situation that Hungary, through the Orban / Varga “path and direction” that have proven a cataclysmic disaster, in Economic & Financial Management of the Hungarian Economy, that will WORSEN from what we know today it is representative of.
The “gargantuan” rising Debt level of Hungary, created by the FAILED policy’s of Orban & Varga, that the entire Fidesz Government can’t escape being HELD and Accountable – the explanation come the time of it’s NEED(s) for explanation to the EU Commissions, will AGAIN see Orban – Varga and the Fidesz Government of Hungary – HUMILIATED.
Orban / Varga will have NO explanations nor substance of FACTS to explain the DEBT explosion they have IMPOSED bought on Hungary.
Orbán, a control freak, will never let go of Forint despite the 46% slip since he was reelected in 2010.
When Fidesz came to power, the Euro was 267 HUF, and now it is 391 which calculates a huge loss for the Hungarians.
This continual exchange rate loss for the Forint makes the goods in Hungary perpetually expensive, in well as loss of strength for the workers wages.
Sadly, Fidesz’s economic policy structurally badly needs reeducating.
This of course makes the Hungarian families very difficult to visit the West. This makes Western Europe “out of bounds” for the Hungarians.
Orbán requires changing, he is now looking stale after 14 years in power.
In big international companies, the CEOs usually sent on holiday after about 8 years in the chair.