The EU reveals when Hungary could join the eurozone
The European Commission and the European Central Bank have published their latest Convergence Report, evaluating the progress of EU countries outside the eurozone. The report assesses each nation’s readiness to adopt the euro, highlighting their advancements and challenges in meeting the criteria for eurozone membership. According to the latest convergence report, the conditions for euro adoption are not currently met in Hungary.
The Convergence Report
The Convergence Report evaluates the progress of EU Member States outside the euro area, with the exception of Denmark, which has an opt-out. This report, published at least every two years or upon request from a Member State aiming to join the euro area, examines how these countries are meeting the necessary criteria for adopting the euro.
As HVG reports, six EU countries, including Hungary, have been judged in the Convergence Report made by the European Central Bank and the European Commission. The report targeted Bulgaria, the Czech Republic, Hungary, Poland, Romania and Sweden. The results are mixed, but may not be too surprising for most people.
Eurozone enlargement
According to the newest report, out of the six countries mentioned above, Bulgaria is meeting the most criteria. However, the Czech Republic and Sweden are not doing badly either. The same could not be said about Hungary.
To be more exact, there is not a single criterion met by Hungary.
In addition, the willingness to adopt the new currency raises further questions, as the Czech Republic and Sweden are seemingly content with their current currencies.
Hungary does not meet the criteria
According to the Convergence Report, Hungarian inflation remains a significant barrier to joining the eurozone, with an expected benchmark of 3.3 percent contrasted with an annual average of 8.4 percent in May 2024. Additionally, Hungary’s deficit stands at 6.7 percent, well above the expected 3 percent, marking the highest deficit among the assessed countries. Romania closely follows with a deficit just 0.1 percentage point lower, remaining under an excessive deficit procedure since 2020.
The euro adoption criteria also include the long-term interest rate, expected to be 5.5 percent, which only three out of six countries meet. Hungary notably falls short, with a rate of 6.8 percent. Another critical criterion is the quality of governance, a challenging aspect to put into numbers. Only Sweden meets this expectation, while Bulgaria and Hungary face issues due to perceptions of high corruption, causing reluctance among other countries to support their accession.
Strict requirements
ING’s analyst, Péter Virovácz, has told Index that the introduction of the euro has fairly strict requirements. He said, “(…) there is growing debate about the extent to which these requirements actually help to create and put into practice the concept of an optimal currency area.” Since Hungary joined the EU, there have been periods when the country has met all the criteria for joining the eurozone. However, it is all in the past now.
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Never would be good. The euro is a bad idea on so many levels, and it’s bound to collapse sooner or later.
Why would anyone WANT to join the eurozone at this point. It is just another way for the EU to control a country. Especially with the BRICS exchange currency in development.
Sweden and Czechia seem to understand that. Poland foolishly is likely to join whenever they can. I fear that the leader of Bulgaria will get them in whether the Bulgarians want it or not! Hungary is unlikely to even be *allowed* to join as long as Orban is around!
Uhm. We signed up to join the Euro, at some point, when we joined the European Union?
Not in danger of joining the Euro anytime soon, though. Hungary needs to achieve a high degree of sustainable economic convergence. This means that we must be able to keep pace with those already using the euro (hint: we are way off).
Consider the following:
1. price developments, i.e. inflation (one of the highest in the EU)
2. fiscal balances and public debt (again, one of the highest in the EU)
3. exchange rates (ours – well. Let´s call it “volatile”, it mainly drops over time)
4. long-term interest rates (highest in the EU – we are a winner, baby!)
Actually pretty sad we are not achieving anything with respect to the above four points. For all of us.
Adopting the Euro would be political and economical suicide, as is membership of the globalist EU anyway.