Hungarian finance minister: We need to think about the introduction of the euro
Last year would have been easier even if we had been part of the ERM-2 system, the precursor to the euro, Finance Minister Mihály Varga admitted in an interview with VG.
Although the vast majority of Hungarians have long been in favour of joining the eurozone, the Orbán government has made no effort to replace the forint with EU currency since it came to power in 2010. Now the situation seems to have changed due to Hungary’s economic crisis (huge inflation, no money coming in from the EU fund), and the Hungarian finance minister has at least mentioned the euro.
Minister Varga stressed in the interview that we committed to adopting the euro when we joined the EU, but that careful consideration should precede the choice of the right date for joining.
We should think about the possibility, but the government should not rush into this issue,
Mihály Varga said, citing the Czech Republic as an example.
The 2024 budget is planned for an exchange rate of 381 forints to the euro, the minister said.
The government expects economic growth of 4% next year, which several credit rating agencies consider over-optimistic. Varga said:
I will sign if it ends up being 3 percent.
He said analysts agree that growth will be strong next year, because the outlook for the Hungarian economy is good: foreign investment is coming in briskly, our investment rate is the highest in the EU, exports are at a record high this year, and the labour market is tight. The government expects growth of 1.5 percent this year.
Varga says Brussels is increasing deficits and causing economic damage by blocking the funds Hungary is due.
I find it inexplicable that three years after the launch of Covid, there are still countries, including Hungary, that have not received the support they deserve. As the programme is about to enter the repayment phase, we could have the impossible situation where Hungary is paying back the loans it has taken out and has not yet received either the grant or the loan part, he said.
The inflation outlook was also discussed. Varga expects inflation to accelerate its decline over the summer and even more so in the second half of the year, which will be helped by easing borrowing rates.
Of course, the public purse will suffer from lower consumption, as we have less tax revenue, but this also means that inflation will be able to fall faster than previously expected, the minister said, adding that there are also forecasts that the rate of price increases will slow to 6-8 percent by the end of the year.
please make a donation here
Hot news
Steven Bartlett at SIBF 2024: From business success to fatherhood dreams
Ukrainian county inhabited by Hungarians, Transcarpathia, under Russian attack!
Hungary’s universities break through in 2024 Shanghai Rankings—Which ones are top 200?
Slovak PM Fico may sacrifice his good relations with PM Orbán to keep his governing coalition
Orbán cabinet: Hungary can receive 6.61 billion euros from the EU in 2025
Experience the magic of Zagreb’s Christmas market with a special train from Hungary!
16 Comments
Loudening tones of Frustration, hinging on Panic Management of the Hungarian Economy, as it WORSENS, could be applied interpreted, to the comments from the Minister of Finance – Mihaly Varga.
REMEMBER – that Varga and Orban, have been the (2) two principal architects, that designed and sent the Hungarian Economy, in its Free Fall trend, that hinges on a cataclysmic COLLAPSE.
Nothing in Hungary, if we just proceed deeper into this MESS our economy is in, will get CHEAPER.
If or be weary of the PROPAGANDA usage, that Varga has a history of practicing, that Reuters interview within the past (7) seven days Varga gave “void” of factuality, this “flippancy” of Hungary converting to the Euro, could be a diversion – a deflection, to “throw off” avoiding the MESS that he as Finance Minister, a Senior “Founding Father” – of the Fidesz Political Party, the Orban Government, the cataclysmic MESS that is the Hungarian Economy.
Varga & Orban shoulder MUCH of the Financial & Economic Mess that we as a country find ourselves currently in and WORSENING.
Stay with the Forint, nothing will get cheaper.
Go to the Euro, it will be a “Blast off” in increased cost of living broadsheet in Hungary.
Why not retain the Forint and run a “Dual” Currency of Forint & Euro ?
Economically & Financially the MESS we are in, just makes looking forward Cumbersome.
Its beyond the capabilities of this current Minister of Finance – Mihaly Varga & Prime Minister – Victor Orban – remembering they have taken us to this PLACE of desperation, and to revert, this factual trend, and give us glints flickering’s of light – for our FUTURE- bring us out of the “collapsing” trend of our Economy, but that is a “used by date” and will not HAPPEN.
This is a TACTIC – to try and BOLSTER the collapsing currency of Hungary.
Varga- the Finance Minister of the “ill fated” Orban Government, as we speak, likely on the phone endeavouring to BORROW further funding for Hungary, likely AGAIN from China.
Scaremongering, through an exasperated position he and Orban have PLACED the position of Hungary.
Hungary with the mountainous growing DEBT it has – the service collapsing capability of the DEBT, can’t AFFORD to go, would not meet approval criteria’s from the respective authorities to go EURO.
Introducing the Euro, makes it more difficult to leave the EU. It is time form Hungary to decide whether it makes sense to stay in the EU, in spite of the EU’s determination to remove the sovereignty of the participating countries. Is it worth for a small country to stay in a club dominated by France and Germany, globalists and Marxist socialist political principles? Is it worth staying in a club that is determined to wipe out European culture; replace the people with ethnic groups with totally different religion and culture, with people that cannot assimilate?
Most of EU nations created their wealth on the back of the people they colonized, oppressed, robbed and killed. Hungary’s hands are clean of enslavement. The western EU nations are now trying to colonize and enslave the people of small European nations.
@mariavontheresa – question.
Since the Brits recently left the EU, it should not be difficult to list the top 3 benefits the UK is currently enjoying?
Re joining the Euro – ehhh. I am sorry. We are nowhere near meeting the criteria. King of wishful thinking “we would join, but, you know, we decided”. No. Not even close. Fail grade.
https://www.consilium.europa.eu/en/policies/joining-the-euro-area/convergence-criteria/
Mihaly Varga is talking about science fiction. At the moment joining the Euro is a joke. Read the conditions from the EU Council below and decide if this government is anywhere near them and if you think these dangerous Fidesz clowns would ever achieve it.
Economic convergence criteria
The economic conditions for joining the euro area help to ensure that a country is ready for integration into the monetary regime of the euro area.
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.
Excessive deficit procedure (European 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.
Legal convergence
Candidates to join the euro area must also ensure that national legislation is compatible with the Treaty and the Statute of the European System of Central Banks (ESCB) and the European Central Bank (ECB).
The Treaty and Statute provide for the independence of central banks.
Decide for yourself if these Fidesz clowns are anywhere near the EU criteria to enter the EU. Varga is talking science fiction. It is a big fat no for all four criteria. This government is trashing the country and it is only going to get worse.
Economic convergence criteria
The economic conditions for joining the euro area help to ensure that a country is ready for integration into the monetary regime of the euro area.
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.
Excessive deficit procedure (European 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.
Legal convergence
Candidates to join the euro area must also ensure that national legislation is compatible with the Treaty and the Statute of the European System of Central Banks (ESCB) and the European Central Bank (ECB).
The Treaty and Statute provide for the independence of central banks.
All you see happening is due to the western world leaving the gold standard. Replacing it with a debt based pyramid economy, doomed to collapse.
The collapse is here, luckily Hungarian people are not that much in debt as many other countries.
This is why the Libyan war was started for example, Muammar G was about to leave the petrol dollar and start a gold-backed African dollar.
The EU has the goal of no borders, now historical cultures, no power outside of their tight inner group. People who are Magyar by birth anywhere should encourage the county of Hungary to play nice to keep their enemies close, but not turn over their unique systems or money. As much as I keep reading complaints about a hard life, people keep traveling, keep eating luxury food & booze at home and at eateries, keep taking holidays at spas etc. That is not hardship. That is just having had it too easy for too long. Things are catching up with societies everywhere but don’t give away your power. And money is power. Be frugal, keep independent from those tricksters who want you erased.
Brussels is not “blocking” funds from Hungary. Victor is blocking funds by not playing by the rules. Where did his son in law get millions of dollars? That is a back door payoff for sure. I am beginning to think that Maria is Victor’s daughter.
Impossible for Hungary to Stand Alone.
Put ALL the commentators ideas into a hat, not a “melting pot” but then again, pull them individually out, determining the facts from fiction, examine them by comparison to historical events and happening – outcomes, then look at Europe to-day – look at Hungary to-day then – the Global picture, its MESSY.
Mankind has CREATED it, we wear the BLAME, but that’s an historical on-going occurrence with civilization, and never forgetting that History Never Lies.
Hungary – we can’t go it alone.
Hungary -we can’t go it alone without retaining Membership of the European Union.
Hungary – we can’t go it alone not being a member of the European Union and by not being Governed under DEMOCRACY.
There in lies our MAJOR problems – as we have been under Orban and his Government, sent on a course that will DESTROY us.
Hungary – we are DESTINED to dismally fail the (3) three components of having a FUTURE as a country – through the WRONGFULLNESS of the Orban plan.
Orban is on a DESERT Island, besides China & Russia sending in there “life savers” – the name of Orban, – who else – is going to come to his RESCUE.
@svensvensson – back to the Gold standard (more 19th century) or pining after the Bretton Woods System – really? The latter failed for a reason, re-instituting it would be like un-inventing the atomic bomb.
Then again … Bretton Woods did create the institutions such as the International Monetary Fund and the World Bank!
@kate – the “good old days” of Europe were defined by incessant wars between all these wonderful unique cultures and interests.
https://en.wikipedia.org/wiki/List_of_conflicts_in_Europe#20th_century
The predecessor of the European Union was formed to discourage nationalist and antagonistic behavior through economic interdependence and convergence of standards. The landmark Maastricht Treaty (1991), an agreement among the then 12 member countries of the European Community (now the EU), consisting of the UK, France, Germany, Italy, Ireland, Belgium, Denmark, the Netherlands, Spain, Portugal, Greece, and Luxembourg included the creation of an economic and monetary union (EMU) which culminated in the introduction of the common Euro currency, in 2002.
Long story short – Hungary assumed the obligation to introduce the Euro when we joined the EU:
https://en.wikipedia.org/wiki/Enlargement_of_the_eurozone
“All EU members which have joined the bloc since the signing of the Maastricht Treaty in 1992 are legally obliged to adopt the euro once they meet the criteria, since the terms of their accession treaties make the provisions on the euro binding on them .”
@Norbert I know there is no way out of the shithole economy now, it’s too late.
But you can’t keep increasing the debt, it’s impossible.
We’ll see how much of an atomic bomb it’ll be for Russia, or other BRICS-members..
Hold on to your hats, it’s going to be a bumpy ride..
Anonymous, just letting you know that presently, there is not an EU member eligible to join the EU, not Belgium, France, Denmark, Holland, or Germany. The EU should stick to being an economic block, then it may succeed.
And with the euro, it meant the CBDC euro, the QR passport including all data and the one world order reign and not to forget that one super Poland (already started with Ukraine)… and of course even higher prices if it comes to the costs of living.
The people of the first countries who started the EU had to deal with that fact (for many years), Croatia is a recent example…
Good thing WEF does not want us to travel, or eat meat and allows people to buy more than 3 pieces of clothing a year (underpants, socks and overall).
The Finance Minister with the CEO of Bank of Hungary need booting sooner than later.
In 1993, 135 Ft was the exchange rate for the Pound Sterling, and now it is over 440 Ft.
They have been in their job now well over a decade and despite all the propaganda they failed miserably in their job.
It is time for fresh thinking.