Hungary’s central bank governor has spoken of the pitfalls of euro adoption: this, he says, is how a Hungarian euro can be made to work.
Only one criterion met
The president of the Magyar Nemzeti Bank emphasised that the aim is not a swift, but a successful euro introduction. In his view, three things are needed for this: societal support, a coordinated strategy and a prepared real economy, index.hu writes.
Public backing is already in place: among countries on the verge of adopting the euro, Hungary has the highest proportion of supporters, with roughly four in five Hungarians favouring the single currency. At the same time, an equally large share believe the country is not yet economically ready for it.
The figures so far bear out this caution. According to Mihály Varga, Hungary currently meets just one accession criterion – the inflation reference value. This has, however, already improved the country’s standing in financial markets, while over the past year and a half the forint has become one of the world’s best-performing emerging-market currencies.
Risk from energy dependence and sluggish growth
Hungarian economic cycles move closely in step with those of the eurozone, which is a favourable sign. A more serious risk, however, is inflation: because of the greater energy dependence of central and eastern European countries, prices can more easily diverge from trends seen in the euro area.
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There is also work to be done on catching up. Between 2020 and 2025, Hungary grew by an average of 1.2 per cent a year, while several neighbouring countries expanded more quickly.
On the basis of Mr Varga’s message, then, adopting the euro has again become a more realistic political goal, but actual accession is not yet close. Societal support is strong, certain economic indicators are improving, but significant economic-policy work is still required to meet the necessary convergence criteria.
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This is what the “Hungarian euro” looks like
As we reported last year, the first Hungarian euro coin is available for purchase on Vatera, and its price was not excessively high at the time. The obverse features King Matthias and Queen Beatrix, while the reverse shows the Phoenix, one of the largest sailing vessels on Lake Balaton, which sailed on the “Hungarian sea” in the ownership of the Festetics family, founders of the Georgikon in Keszthely. Why these particular images appear on the front and back, and why this coin was produced in the first place, can be read in our article.
New analysis: Hungary’s government is full steam ahead with adopting the euro
