Hungary’s economy minister sees possibility for adopting euro by 2020 – UPDATE

Budapest, July 19 (MTI) – Economy Minister Mihály Varga suggested in an interview published by daily Magyar Hírlap on Tuesday that Hungary could adopt the euro by the end of the decade, but only if economic trends continue to improve and the common currency becomes more stable.

“If economic trends are long-lasting, if we move closer to the European Union’s developmental average, and if our productivity continues to improve, I don’t consider [eurozone] accession groundless by the end of the decade,” Varga told the paper.

“However, this requires a more stable euro together with a joint fiscal policy on a more secure standing,” he added.

EU member states that want to join the eurozone must keep consumer inflation no more than 1.5 percentage points over the three best-performing member states, their public finance deficit must not exceed 3 percent of GDP and their state debt must be no more than 60 percent of GDP. Their long-term interest rates must be no more than 2 percentage points over the rate of the three best-performing members states and they must join the ERM-II system, the waiting room for euro adoption, for at least two years without severe tension.

According to the European Commission’s and European Central Bank’s latest convergence report, Hungary only fails to meet the last criteria, Varga noted.

“I very much hope we will adopt the euro, but fortunately it’s also up to us to decide when,” he said.

The opposition Socialists dismissed Varga’s remarks as “farcical”, and suggested that ruling Fidesz “aims at quitting the European Union rather than adopting its currency”.

In a statement, the Socialists referred to Prime Minister Viktor Orban as saying years ago that “there is life outside Europe”, and said that his ministers recently “made it clear that they want to drive Hungary out of the EU”. The government’s upcoming anti-quota referendum serves just that purpose, authors of the Socialist statement added.

The leftist Democratic Coalition (DK) welcomed Varga’s “apparent change of heart”, saying the best way to promote Hungary’s national interests would be to adopt the euro. DK board member Szabolcs Kerek-Bárczy called on Fidesz “to decide whether they agree with Varga or wish to continue fighting against the EU, Hungary and its citizens”. Should Fidesz back Varga, the ruling party “must immediately stop its hate-mongering” against the EU and drop the upcoming quota referendum, seen as the first step in “the process of Hungary’s departure from the EU”, he said in a statement.

The ruling Fidesz party said in a statement that “it is not the EU and Hungary’s membership in it that is the problem but the erroneous migration policy of Brussels”. It added that parties with a “sanctimonious” message in support of Europe and the single currency would now be joining efforts to settle migrants in Europe and in Hungary if they were in power. Fidesz in its statement underscored its commitment to Europe, saying Hungary is now a member of the bloc and would continue to be one in the future, too.

Source: MTI