It is time to admit that introducing the euro was a mistake as almost none of the preconditions for a common currency were met at the time, György Matolcsy, the governor of Hungary’s central bank, said in an article published in the Financial Times on Sunday.
Matolcsy noted that “two decades after the euro’s launch, most of the necessary pillars of a successful global currency – a common state, a budget covering at least 15-20 per cent of the eurozone’s total gross domestic product, a eurozone finance minister and a ministry to go with the post – are still missing.”
He called the introduction of the common currency “a French snare” designed by former French President Francois Mitterrand “who feared growing German power and believed convincing the country to give up its Deutschemark would be enough to avoid a German Europe”.
The euro, however, “was unable to prevent the emergence of another strong German power”, Matolcsy said.
Germany, on the other hand, has grown “complacent”, Matolcsy said.
“They missed the digital revolution, miscalculated the emergence of China and failed to build pan-European global companies,” he added. Matolcsy cited an analysis by the Centre for European Policy, saying “there have been few winners and many losers in the first two decades of the euro”. “Most eurozone countries fared better before the euro than they did with it,” he said.
“We need to work out how to free ourselves from this trap,” Matolcsy said.
Meanwhile, the leftist Democratic Coalition (DK) slammed the article and called on Prime Minister Viktor Orban to immediately initiate talks on introducing the common currency in Hungary. Zsolt Gréczy, DK’s parliamentary group spokesman, told a press conference that by writing the article, Matolcsy had proven himself “unfit to occupy any economic office”.
Introducing the euro is in Hungary’s national interest, Gréczy said, adding that “anything that goes against this is an open betrayal of Hungary’s national interest”. Only by introducing the euro can Hungary prevent the further depreciation of wages and pensions, he said.