Is it worth for Hungary to replace forint with euro?
A rushed adoption of the euro that ignores differences in the levels of economic development between Hungary and the euro zone could sacrifice Hungary’s growth and even pose risks to its stability, a member of the central bank’s Monetary Council said on Wednesday.
Countries with uneven levels of economic development could be hurt by not having the option to chart their own monetary policy course due to using a single currency, Péter Gottfried told an online roundtable discussion organised by the scientific periodical Financial and Economic Review and the Hungarian Economic Association. A decision by the European Central Bank could prove too lax for one country while being too stringent for another, he said.
Contrary to expectations, the introduction of the euro has not accelerated convergence within the euro zone, Gottfried said, adding that certain members had even fallen behind in terms of development. While
countries like Germany, Austria and the Netherlands have benefitted from the use of the euro, southern euro-zone countries, for instance, are stagnating,
he said.
Also, countries like Sweden, Denmark, Poland, the Czech Republic, and in some respects, even Hungary have managed narrow the gap with the more developed EU member states without the euro, he added. Gottfried said that for Hungary to introduce the single currency it may not be enough for it to meet the criteria of the country’s GDP per capita reaching 85-90 percent of the EU’s average. Hungary also has to make up ground in terms of competitiveness, he said.
Because of the interdependence between the euro zone and the Hungarian economy, Hungary has a vested interest in the success of the euro, even though it is not the official currency, he said, noting that Hungary does 85 percent of its foreign trade with the euro zone. He also said that
the introduction of the euro had been unsuccessful in halting the decline of the EU’s economic power on the global stage.
However, the system has “stood the test of crises”, he said.
The central banker also suggested that any political benefits that may accrue from a Hungarian accession to the euro zone would not surpass those that the country secured the moment it made a political commitment to the European Union and NATO.
Gottfried said it would be worth waiting to implement reforms to improve Hungary’s competitiveness, put growth on a sustainable footing and reduce its public debt permanently before adopting the single currency. But if the determination to see these policies through were lacking, then it may be worth changing priorities and, in the hope of a favorable development in yields, bringing forward the euro’s introduction.
The central banker also suggested that any political benefits that may accrue from a Hungarian accession to the euro zone would not surpass those that the country secured the moment it made a political commitment to the European Union and NATO.
Gottfried said it would be worth waiting to implement reforms to improve Hungary’s competitiveness, put growth on a sustainable footing and reduce its public debt permanently before adopting the single currency. But if the determination to see these policies through were lacking, then it may be worth changing priorities and, in the hope of a favorable development in yields, bringing forward the euro’s introduction.
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Source: MTI
It is not worth it for Hungary.
Look what it did to Greece.
Stay with the FORINT.
Why does this paper constantly ask or debate the same argument. No matter how you slice it the answer will always remain …. Hungary taking on the EURO as its currency will be Hungary’s last breath. It will not survive and will end up being like most other countries in the EU – BROKE!. Please stop regurgitating the same argument like a herd of cows.
The euro is a bad idea now matter how many times this electronic rag post it.
Perilous for Hungary to go there.
This is a repeated article on this subject matter – words played around with – rehashed – which when first published – not more than (2) two months back – received – NEGATIVE – population/citizens – Support.
The comments posted by commentators – overall excellent in what was presented as a NEGATIVE – to this idiotic thought process and idea – took the same position – No – remain with the Forint.
A course in economics
To change the Forint to Euro would be a costly mistake. Hungary would relinquish it’s own financial power. What next? Common EU army? What next? Single EU government for all countries? What next?
Please don’t! Even with a fulltime job in the Netherlands, poverty was getting nearbye! And with that i mean: costs for housing, groceries, insurance and so on! I’m not including, fun things even. So the euro will be so wrong for the Hungarian people, they will pay for it and not getting any benefits! And what are the benefits even? I did not find out in the 20 year of the euro, I just feel bad about the euro! Hope the Hungarian gouvernment keeps their head straight!