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Socialists call for three-way talks on introduction of euro

corruption money euro

The Socialist Party on Wednesday called for employers, unions and parliamentary parties to sit down for talks on Hungary’s adoption of the euro.

Addressing a press conference, Socialist MEP István Újhelyi noted that national business association MGYOSZ earlier this week called on the government to start focusing on Hungary’s euro-zone accession.

He said the government had a duty to discuss the potential introduction of the single currency with members of society.

Hungary must not miss out on joining the euro zone, Újhelyi said, adding that the government should consider the opinions of unions and employers on the matter.

He noted that Slovakia and Slovenia were already euro-zone members and that Bulgaria has also applied to join.

Újhelyi said his party would propose a schedule for the trilateral talks in early September.

Public debt can fall to below 60 pc of GDP by 2022, says Hungarian economy minister

Daily News Hungary economy

Hungary’s public debt can be reduced from the current 72.9 percent to below 60 percent by the end of the present governing cycle in 2022, Finance Minister Mihály Varga told the Saturday issue of daily Magyar Hírlap.

The government’s objectives are unchanged: to secure economic growth with a rate of about 4 percent, job creation, full employment, reducing debt and a low budget deficit, he said.

The social security tax could be reduced by another two percentage points in 2019, from 19.5 to 17.5 percent, the minister said. Further, the government will grant further tax benefits to families. The benefit for families with two children, for instance, will grow to a monthly 40,000 forints (EUR 126), he said.

As long as Hungary does not join the eurozone,

it focuses on creating the conditions for accession, the minister said.

“Not because we want to join [the zone] but because these conditions – low public debt, moderate inflation, low interests – favour the economy. Fortunately,

Hungary has met nearly all the major criteria. This is why we face the dilemma of when and how it would be worth joining the eurozone. At present we need not haste,” Varga said.

Hungary entering the eurozone in 2021-2022? How is it feasible?

Stability of eurozone important to Hungary, says economy minister

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The stability of the eurozone and banking operations in the European Union are important to Hungary’s economy and financial system, Finance Minister Mihály Varga said at an extended meeting of euro-zone finance ministers in Brussels on Thursday evening.

Varga said the interests of EU member states not in the eurozone should be taken into consideration at talks on the completion of the banking union, according to a statement by the finance ministry. Hungary has participated constructively in banking union talks from the outset and has achieved much in the area of risk mitigation, it added.

“Our basic standpoint is that banking should remain open and efficient and member states within and outside the banking union should get equal treatment,”

Varga said.

In the case of financial businesses operating in several member states, Hungary regards the balanced division of financial oversight tasks between parent and host countries as important.

Also, it is crucial for Hungary that the regulation of sovereign country risk should not change and that Hungarian government securities remain in the risk-free category, the minister said.

On Friday, EU finance ministers will also discuss administrative cooperation in the area of VAT, in addition to measures aimed at reducing risk in the banking industry.

Hungary entering the eurozone in 2021-2022? How is it feasible?

ECB reviews Hungary’s euro convergence progress in biannual report

wage money Euro

The European Central Bank (ECB) said Hungary needs “stability-oriented economic policies” and “wide-ranging structural reforms” in a report on euro convergence released on Wednesday.

The ECB reviews the progress of members states, which have not yet adopted the euro, in “fulfilling their obligations regarding the achievement of economic and monetary union” in its biannual Convergence Report.

“Hungary would benefit from structural reforms aimed at promoting private sector-led growth, such as by improving the governance of institutions and by cutting red tape and tax burden where excessive,” the ECB said.

“In order to further bolster confidence in the financial system, the national competent authorities should continue to improve their supervisory practices, among other things, by following the applicable recommendations from the relevant international and European bodies, and by collaborating closely with other national supervisors of EU Member States within the supervisory colleges,” it added.

The ECB noted that Hungary had met the Maastricht criterion for the budget deficit last year, but had exceeded the threshold for state debt. Long-term interest rates were under the reference value, but inflation was over the threshold, it added.

Euro convergence criteria limits CPI to 1.5 percentage points over the average rate of the three EU member states with the lowest inflation and long-term interest rates to 2 percentage points over the average ten-year government bond yields in those three states. The criteria set the thresholds for the general government deficit and state debt as a percentage of GDP at 3 percent and 60 percent, respectively.

Although Hungary did not participate in the European Exchange Rate Mechanism (ERM II), the “waiting room” for the euro, the forint exhibited a “relatively high degree of volatility” over the two-year reference period covered by the report, the ECB said.

“Hungarian law does not comply with all the requirements for central bank independence, the prohibition of monetary financing, the requirements for the single spelling of the euro and legal integration into the Eurosystem,” the ECB noted in the report.

Hungary entering the eurozone in 2021-2022? How is it feasible?

euro

The long-cherished dream of thousands of Hungarians to enter the eurozone seems to be within easier reach than any time before. Although several years of hard work is still ahead of the country in order to meet all the requirements and criterion needed for the introduction of the common currency of the European Union, as Penzcentrum.hu reports, if Hungary has a serious political intention to strengthen its EU bonds, then the economic project can be realised in 2021-2022.

The question of joining the eurozone has already stirred much controversy in Hungary among those supporting a deeper integration in the EU and those who are still waiting for the setup of a sufficiently strong economy. But the real question is whether the introduction of the euro in Hungary is a realistic aim to achieve in the near future, or it rests an aspiration to realise.

As Norbert Szijártó, the junior research fellow at the Institute of World Economics, reported to Penzcentrum.hu, Hungary is compliant with the most crucial technical criterion and the Maastricht convergence criteria, and it also meets the ones concerning the inflation rate, the budget deficit, the long-term interest rates and the debt management. Furthermore, similarly to other countries, like the Czech Republic and Poland, Hungary has constantly satisfied these requirements in the last 2-3 years.

Therefore, the introduction of the euro would be already possible in the middle of 2019 or at the beginning of 2020, but until that time, there is a lot to develop since Hungary still fails to meet the exchange rate stability requirement.

If we decide to take the next step in our EU integration, serious economic measures need to be taken involving the creation of economic stability and the prevention of excessive fluctuations.

As the expert also pointed out, “the European Commission attempts to encourage countries outside the eurozone to enter it and even takes financial measures to support it.”

If prospective Member States have serious intentions about joining the eurozone, then the European Commission still has to make a decision about the amount of financial assistance provided to this project.

The 7-year-long program of the 2021-2027 period, on which a lot depends regarding the future of Hungary, rests to be fixed in the second half of this year.

“In fact, there are two possible economic options: Hungary can either state that it does not intend to join the eurozone when, of course, no financial assistance will be provided, or it can express its intention to join the eurozone, which realistically speaking, might take place in 2021-2022.”

Finance minister: Euro introduction not enough for Hungary to catch up

corruption money euro

The most important tool for catching up is economic policymaking that supports competitiveness, Mihály Varga, the incoming Hungarian finance minister, said on Friday in Sofia at the Ecofin Council meeting. Euro-zone membership in itself will not allow eastern Europe to catch up.

Varga told European Union economic and finance ministers that member states should be left room for manoeuvre in the areas of productivity, employment, investment promotion and technological reforms.

Hungary’s view, he said, is that the EU has managed to reduce development gaps between the regions and cohesion policy has been an important tool in that endeavour.

Hungary urges EU funding to be maintained at current levels and funds for development should be increased in the next EU budget cycle, he added.

No need to rush euro adoption, says Hungarian economy minister

economy minister Hungary Orbán prime minister

Until Hungary’s economic performance approaches the average performance of the eurozone or that of Germany, there is no need for Hungary to rush the adoption of the euro, Economy Minister Mihály Varga said in an interview published in Saturday’s issue of daily Magyar Hírlap.

“There is no hurry. Today we are in a position in which we meet all the [euro convergence] criteria,” Varga told the paper. Like the Czech Republic and Poland, Hungary has not pegged the forint’s exchange rate to the euro, he noted.

“This is a favourable position to be in; it is up to us when we decide to take the next step,” Varga said.

On the topic of jobs, the minister said that as long as just one person is unemployed in Hungary, the government has a responsibility to create more jobs so that everyone can find work. Varga said Hungary sees family policies, rather than immigration, as the answer to its demographic challenges.

He said that at stake in the April 8 election was whether voters wanted to put a stable, growing economy at risk by voting in a new government.

As we wrote on Wednesday, Economic research company Pénzügykutató has revised upwards its GDP growth forecast for Hungary to 3.9 percent this year from an earlier 3.7 percent prediction. Read more HERE.

Photo: MTI

The roots of today’s Visegrád cooperation

visegrad group four v4

According to GLOBS Magazine, the cooperation of the Visegrád countries, looking back on great traditions, is probably one of the most interesting partnerships in the world.

Even the name is special, since it was purposely named after the city lying on the coast of the Danube, north of Buda. This was the place where the Hungarian, Czech and Polish kings met in 1335. (In that time, Slovakia’s territory was under the control of the Kingdom of Hungary, meaning that the meeting covered all the four present member states). The Roman Catholic countries located between the Baltic Sea and the Adrian Sea agreed that they would communicate their economic and political needs together to the western powers (primarily to the neighbouring Holy Roman Empire) and eastern Orthodox or Muslim powers, which mostly signified the framing of a joint trade and customs policy in practice. So we already agreed back then that we would go together without separate deals with outsiders. Following the change of regime in 1989-1990, the leaders of the Central European region (József Antall, Václav Havel and Lech Walesa) had exact visions about how they wanted to lead out their countries from the institutional fetters of the Soviet rule, so they wound up the Warsaw Pact in the 1990s and quit the Council for Mutual Economic Assistance. Moreover, the states who once cooperated in Visegrád knew that besides introducing the market economy model in their countries, they also wanted to change their economic relations with the rest of the world based on the European principles and practices. They initiated so called Europe Agreements – more specifically, it is a type of free trade and economic cooperation relations – with the EU and signed agreements about the withdrawal of the Soviet troops. (When evaluating their result, it must be taken into consideration that the communist regime – then yearned to be reformed by the Soviet Union and Gorbachev – only collapsed in the second part of 1991.) That was when the three great statesmen decided to re-establish the historic Visegrád cooperation to achieve joint goals in the economic and geopolitical vacuum – since they could only join the EU and NATO later.

The memorandum of association was signed in February of 1991 – at that time the countries were still hosted the Soviet troops – and the institutional cooperation was launched immediately. Since the split of Czechoslovakia in 1993, the Visegrád Group has four members.

The power and attractiveness of the cooperation is demonstrated well by the fact that many of the neighbouring, west-oriented countries wanted to join them, but it was always turned down by the founders. At the same time, the so called Visegrád+ political cooperation is focused on a more and more extended cooperation – most intensely with the countries of West Balkan and the Eastern Partnership. Therefore, the Visegrád Group fought arm-in-arm for their integration goals, such as a strong cooperation with NATO – as part of the Partnership for Peace programme until the admission in 1999 (Slovakia was only admitted in 2004) – and the accession to the European Union following the successful partnership agreements to the start of the negotiations in 1998 and the accession in 2004.

The Central European Free Trade Agreement (CEFTA) was worked out and enacted right in the beginning of the cooperation in order to boost the failed trade between the member countries.

This didn’t only have a good influence on the traditionally state-owned or nationally owned companies’ product and service trade, but it also launched prosperous trade and production cooperation between the regional subsidiary companies of the foreign direct investments (FDI) and their other interests in the countries. This was accompanied by a quick visa-liberalisation in the EU for the citizens of our countries – free flow of labour wasn’t established at the time – which resulted in outstanding growth in trade turnover and touristic performance with both the EU and each other from the 2000s. A curiosity about CEFTA is that it was open to other countries of the region as well, and after the Visegrád countries joined the EU in 2004, it became a living heritage of the 1991 foundation through the states waiting to be admitted. Even though the Visegrád countries joined the Schengen zone in 2007, the integration pace is very different regarding the admission to the euro zone. They all accepted the introduction of the joint currency with the signature and ratification of of the Accession Agreement, but the date is not defined and neither Hungary, nor Poland and the Czech Republic seem to be ambitious to set a concrete date. Slovakia gave up its own currency, the Slovak corona in January of 2009. It’s hard to decide whether Slovakia – who wanted to strengthen by this its European determination – or the other three partners took the right step, but I think it says a lot that Slovakia’s economic growth has fallen back to the Hungarian level since her entry in the euro zone – just at the time if the financial crises in Europe. Economists discuss whether this is the result of the introduction of the euro in Slovákia or the lack of it in the other three Visegrád countries.

The success and development of the group is also demonstrated by the Visegrád Fund set up in 2000, which helps the establishment of human relations and the cooperation of the scientific and cultural spheres with a moderate budget. The fund also receives support from countries outside of the Visegrád Group, with which it aims to strengthen cooperation with Germany for instance, and other great, developed world economic and political partners like Israel, Japan and South Korea.

It must be highlighted that before the high-level union meetings, the Visegrád leaders always consult each other at ministerial level. Furthermore, the cooperation between parliamentary and professional organisations have become just as important as the cooperation of the governments.

The cooperation is still based on structural economic similarities, because the countries’ foreign direct capital/GDP rates are still among the highest in the European Union, while the chances of the four countries to be involved in the international productive value chains are also similar. Hence, the EU plays a significant role in their trade – especially export – whereas the export capacities of enterprises in national ownership is quite low everywhere. Our demographic trends, and the rate and direction of emigration with purposes to work abroad are similar as well, however, the latter issue is probably a bit more moderate in the Czech Republic. The countries have similar views – though expressed with different vehemence – on the dangers regarding migration, therefore we aim to keep the key to immigration policy in our hands. A good example of outstanding solidarity is the way our partners help protect Hungary’s southern borders against illegal immigrants, and how we joined our forces to send policemen to Serbia and FYROM to strengthen expertise and solidarity at the southern borders.

The urge to represent our joint interest in Brussels is not only confined to the consequences of the persistent approach regarding our immigration autonomy, but the challenges EU’s great policies are facing must be mentioned as well. So far, we always managed to live through the issues concerning financial budgets and the reforms of cohesion and agricultural politics with beneficial outcomes. We are encouraging the strengthening of EU’s defence capability, we set up the Visegrád Combat Team that can help our smaller regional partners, like Slovenia or the Baltic states in fulfilling their needs regarding protection.

Hungary took over the one-year presidency of the Visegrád Group for the fifth time on the 1st of July, 2017.

We hold the presidency in a period, when we have to protect our joint interests at several negotiations of key importance in the EU, not only concerning the budget guidelines, but also regarding the effects of the BREXIT talks. London is the important employer of the Visegrád work force, and it used to be one of the main net contributors of the joint budget, from where the Visegrád countries received significant sources for the development and cohesion of the regions and the support of agricultural producers, which shall be expected to continue to be provided.

Another joint challenge is that Brussels initiated infringement proceedings against three Visegrád member states due to the implementation of migrant quota schemes centred around the supervision of the requests of illegal immigrants entering the EU. The fourth country (Slovakia) also criticised the EU’s logic, when the country – along with Hungary – legally attacked the decision concerning the obligatory migrant quotas made on the session of the Home Affairs Council without consensus among member states, even if the two countries didn’t win the lawsuit formally in the European Commission. (To attest their solidarity, the Visegrád countries recently offered financial support to the mostly affected Italy.)

But the current situation in the case of Hungary and Poland is very unique: a so far unprecedented proceeding arose (it has already been officially initiated against Warsaw), which would withdraw the voting right of the member state – in other words the participation in joint decision making – due to the alleged violation of the different aspects of constitutionality and rule of law, not to mention that it could also come together with a punishment fee, which has also been unprecedentedin this field so far.

This is why it was very symbolic that the new Polish Prime Minister, Morawiecki, visited Hungary in the first days of January 2018 shortly after his entry into office to consult with his Hungarian counterpart, Viktor Orbán, who is not only a sympathetic ally, but also the head of government of the current presidency of the Visegrád Group. Hungarian and Polish people are not only connected by special historic events and similar values, but Poland has also grown to be one of our greatest trade partners in the post-communist world, while their touristic presence in Hungary has also reached a significant level.

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Hungary’s Debt Management Agency to replace dollar bonds with eurobond

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Hungary’s Government Debt Management Agency (ÁKK) on Tuesday said it plans to issue a low-interest, long-term eurobond to refinance high-interest dollar bonds that are maturing soon.

As they introduce themself, the mission of ÁKK is to finance the government debt and the central government deficit at the lowest costs in the long run taking account of risks, at a high professional level and by using sophisticated methods.

Switching the dollar bond with the eurobond will result in “significant interest savings”, ÁKK said.

ÁKK mandated BNP Paribas, Citi, Deutsche Bank and ING for the transaction.

Investors will have seven days to sell their USD bonds, after which ÁKK will offer the eurobond, “depending on market circumstaces”, ÁKK said.

The transaction will not alter the size or the proportion of Hungary FX state debt, it added.

ÁKK did not specify which dollar bonds it intends to repurchase.

Socialists to probe parties’ stance on ‘super-Europe’

hungary eu flag

Socialist MEP István Ujhelyi said he would send a letter to Hungary’s parliamentary parties to probe their stance on joining a united “super-Europe” and the euro zone. 

A majority of the member states and leaders of the European institutions intend to create a closely integrated core within the bloc, Ujhelyi said. This “super-Europe” is to further boost security, progress and cooperation, he told a press conference on Friday.

According to their prevailing concept, this new formation will be based on the euro zone so that the “countries such as Hungary and Poland which actively obstruct all change within the EU” can be circumvented, Ujhelyi said.

The reform proposals will certainly be announced after the German general elections scheduled for September 24, he said.

In the letter, Ujhelyi will ask Hungary’s parliamentary parties about “which way they intend to lead Hungary”. If the governing parties do not abandon “unorthodox, illiberal politics, they will surely distance the country from this new kind of cooperation,” he said.

Of central eastern European countries, Romania and the Czech Republic have already announced their intentions to join the euro zone. Hungary, however, has not even asked for an observer status, Ujhelyi said.

Answering a question on Viktor Orbán’s Thursday letter to European Commission leader Jean-Claude Juncker requesting EU reimbursement for Hungary’s costs in the migration crisis, Ujhelyi said the letter was a “communications bluff”.

“Whatever the EC’s answer, Orbán is going to use it for domestic policy gains”, he said.

Hungary must not give up euro-zone aspirations, says Varga

Hungary’s economic policy cannot lose sight of its long-term goal to enable the country to eventually join the euro zone, the economy minister said on Thursday.

Addressing a business lunch organised by the Joint Venture Alliance, Mihály Varga insisted at the same time that Hungary was in no rush to adopt the euro.

Answering a question, Varga said Hungary must wait and see how things play out in the euro zone, noting that other countries looked like they were doing the same thing and were not in a rush to join either.

“It is impossible to keep a currency system healthy in the long run when it has a unified monetary policy but different fiscal policies,” Varga said.

“There is no way to stabilise the exchange rate when the European Central Bank sets a common interest rate.”

At this stage Hungary only fails to meet one of the euro convergence criteria, but it deliberately has not pegged the forint’s exchange rate to the euro, he said. 

Once the decision is made, Hungary will be ready to join the euro zone,

Varga said, adding, at the same time, that the economy would have to be competitive enough for Hungary to adopt the common currency.

Photo: MTI

Bloomberg: Hungary puts window for possible FX bond issue in H1

Budapest, February 28 (MTI) – Should government decide to sell a forex bond this year it will tap markets by the end of June, the economy ministry told MTI, summarising an interview the minister gave to Bloomberg.

“If it makes any sense to sell Eurobonds this year, it will obviously be in the first half of the year,” Mihály Varga told Bloomberg. “There’s been a change in behaviour by the US Federal Reserve and the European Central Bank. It may no longer make sense to sell Eurobonds in the second half of the year,” he added.

While the cabinet can still opt to skip a sale this year, it shouldn’t limit its opportunities, Varga said.

Late last year Varga said the government planned FX issues of 1.2 billion euros in 2017, but the volume could vary depending on market possibilities. Hungary could tap euro, USD, yuan or yen bond markets, he added.

National Bank of Hungary officials have suggested that Hungary would be better off financing its debt with forint, rather than FX, issues this year.

Currency exchange – Hungarian Forint, 12.12.2016.

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Budapest, December 12 (MTI) – Official forint fixing of the National Bank of Hungary:

Australian dollar 221.30
Brazilian real 87.76
Bulgarian lev 160.60
Canadian dollar 225.81
Chinese yuan 42.88
Croatian kuna 41.70
Czech crown 11.62
Danish krone 42.23
Euro 314.10
Hong Kong dollar 38.21
Iceland krona 2.65
Indian Rupee 4.39
Indonesian Rupiah (100) 2.22
Israeli shekel 77.47
Japanese yen (100) 255.95
Malaysian Ringgit 67.03
Mexican peso 14.62
New Romanian lei 69.67
New Zealand dollar 212.32
Norwegian kroner 35.11
Philippine Peso 5.95
Polish zloty 70.44
Pound sterling 373.07
Russian ruble 4.85
Serb dinar 2.54
Singapore dollar 207.32
South African rand 21.41
South-Korean won (100) 25.34
Swedish krona 32.30
Swiss franc 291.79
Thai baht 8.32
Turkish lira 84.07
Ukrainian hryvna 11.32
USA dollar 296.49

A serious offer from Moscow

Russia’s Trade Representative to Hungary Nikolay Livencev said to “Figyelo.hu” that if the Hungarian government decided Russia was ready to start negotiations to replace dollar based bilateral trade between the two countries with national currencies (HUF and RUB).

Livencev emphasized that in their view this accounting method would reduce risks in bilateral trade activities, and offer other benefits in the field of tourism, banking and the energy sector.

Forint and ruble based accounting methods could further expand the list of various financial instruments used in bilateral trade and would eliminate the conversion of local currencies into dollar or euro removing (dollar / euro) conversion losses – said the Russian trade representative.

The use of national currencies in bilateral trade is within the power of national governments emphasized Livencev. The Russian Federation is interested in this type of system deployment. In Moscow there is a high level support for such trade arrangement.

[button link=”https://dailynewshungary.com/tag/russia/” type=”big” newwindow=”yes”] Read more about RUSSIAN-HUNGARIAN RELATIONS[/button]

President Vladimir Putin said in a recent statement that the Russian Federation is ready to strengthen the role of national currencies in bilateral trade because their use reduce dependence on external economic fluctuations.

The Russian trade representative also said that prior consultations are taking place between the two countries to form a Russian-Hungarian Airline, a plan that the Russian side finds very interesting. “But at this stage it would be premature to speak about any result.”

[button link=”https://dailynewshungary.com/volume-trade-hungary-russia-fell-significantly-due-eu-sanctions/” color=”red” newwindow=”yes”] Related article: VOLUME OF TRADE BETWEEN HUNGARY AND RUSSIA FELL SIGNIFICANTLY DUE TO EU SANCTIONS[/button]

That being said Hungary and the Russian regions continue expanding economic, cultural and tourism activities and it would be useful to have direct air link between those regions and Hungary using charter flights.

The planned Russian-Hungarian airline would use Russian-made regional SSJ-100 aircrafts. Russian airline S7 already operates charter flights between Russia and Lake Balaton and Sármellék airports added the Russian representative.

Budapest forint fixing

Budapest, September 12 (MTI) – Official forint fixing of the National Bank of Hungary:

Australian dollar 207.64
Brazilian real 84.47
Bulgarian lev 158.79
Canadian dollar 210.90
Chinese yuan 41.36
Croatian kuna 41.52
Czech crown 11.49
Danish krone 41.73
Euro 310.56
Hong Kong dollar 35.62
Iceland krona 2.41
Indian Rupee 4.13
Indonesian Rupiah (100) 2.11
Israeli shekel 73.27
Japanese yen (100) 270.56
Malaysian Ringgit 67.89
Mexican peso 14.51
New Romanian lei 69.75
New Zealand dollar 201.78
Norwegian kroner 33.46
Philippine Peso 5.81
Polish zloty 71.45
Pound sterling 366.76
Russian ruble 4.24
Serb dinar 2.52
Singapore dollar 202.85
South African rand 19.02
South-Korean won (100) 24.76
Swedish krona 32.45
Swiss franc 283.62
Thai baht 7.91
Turkish lira 92.60
Ukrainian hryvna 10.38
USA dollar 276.30

Photo: infoszfera.hu

Budapest forint fixing

forint hungary
Budapest, August 1 (MTI) – Official forint fixing of the National Bank of Hungary:
Australian dollar           211.77
Brazilian real               86.00
Bulgarian lev               159.44
Canadian dollar             213.84
Chinese yuan                 42.08
Croatian kuna                41.66
Czech crown                  11.54
Danish krone                 41.92
Euro                        311.83
Hong Kong dollar             36.01
Iceland krona                 2.35
Indian Rupee                  4.19
Indonesian Rupiah (100)       2.14
Israeli shekel               73.36
Japanese yen (100)          273.30
Malaysian Ringgit            69.53
Mexican peso                 14.94
New Romanian lei             69.97
New Zealand dollar          200.96
Norwegian kroner             33.04
Philippine Peso               5.95
Polish zloty                 71.55
Pound sterling              368.58
Russian ruble                 4.21
Serb dinar                    2.53
Singapore dollar            208.68
South African rand           20.23
South-Korean won (100)       25.31
Swedish krona                32.58
Swiss franc                 288.54
Thai baht                     8.04
Turkish lira                 93.83
Ukrainian hryvna             11.26
USA dollar                  279.42

Hungarian economy minister: No hurry to adopt euro

Daily News Hungary economy

Budapest, July 22 (MTI) – Hungary’s economy minister has said that there is no need to hurry to adopt the euro. Unless the level of development of the country’s economy reaches the European average, the move could be detrimental, he said.

Mihály Varga said in an interview on Friday:

“We can have the euro, but we won’t for the time being.”

Speaking to a local radio station in Baile Tusnad (Tusnádfürdő), in central Romania, Varga said the euro zone had experienced difficulties in the past few years, and adoption currently does not appear to be “overly attractive”.

Hungary complies with all but one of the conditions for joining the single currency but it does not wish to enter the ERM II exchange-rate corridor yet, he said. The fact that Hungary is now in such a position represents a huge advance on six years ago, when the country did not comply with a single condition for adopting the euro, he added.

If Hungary were to join prematurely, it could end up like “certain Mediterranean countries, which doe to their lack of competitiveness were unable to make use of the opportunities of euro-zone membership.”

On the topic of Brexit, Varga said Hungary must take advantage of the opportunities presented by Britain’s eventual withdrawal from the European Union. The government is making efforts to attract economically important players to Hungary from the UK, primarily in the car industry. Hungary also wants to headquarter the European Banking Authority, if it is forced to depart from London, Varga said.

Photo: MTI

Hungary’s economy minister sees possibility for adopting euro by 2020 – UPDATE

Budapest, July 19 (MTI) – Economy Minister Mihály Varga suggested in an interview published by daily Magyar Hírlap on Tuesday that Hungary could adopt the euro by the end of the decade, but only if economic trends continue to improve and the common currency becomes more stable.

“If economic trends are long-lasting, if we move closer to the European Union’s developmental average, and if our productivity continues to improve, I don’t consider [eurozone] accession groundless by the end of the decade,” Varga told the paper.

“However, this requires a more stable euro together with a joint fiscal policy on a more secure standing,” he added.

EU member states that want to join the eurozone must keep consumer inflation no more than 1.5 percentage points over the three best-performing member states, their public finance deficit must not exceed 3 percent of GDP and their state debt must be no more than 60 percent of GDP. Their long-term interest rates must be no more than 2 percentage points over the rate of the three best-performing members states and they must join the ERM-II system, the waiting room for euro adoption, for at least two years without severe tension.

According to the European Commission’s and European Central Bank’s latest convergence report, Hungary only fails to meet the last criteria, Varga noted.

“I very much hope we will adopt the euro, but fortunately it’s also up to us to decide when,” he said.

The opposition Socialists dismissed Varga’s remarks as “farcical”, and suggested that ruling Fidesz “aims at quitting the European Union rather than adopting its currency”.

In a statement, the Socialists referred to Prime Minister Viktor Orban as saying years ago that “there is life outside Europe”, and said that his ministers recently “made it clear that they want to drive Hungary out of the EU”. The government’s upcoming anti-quota referendum serves just that purpose, authors of the Socialist statement added.

The leftist Democratic Coalition (DK) welcomed Varga’s “apparent change of heart”, saying the best way to promote Hungary’s national interests would be to adopt the euro. DK board member Szabolcs Kerek-Bárczy called on Fidesz “to decide whether they agree with Varga or wish to continue fighting against the EU, Hungary and its citizens”. Should Fidesz back Varga, the ruling party “must immediately stop its hate-mongering” against the EU and drop the upcoming quota referendum, seen as the first step in “the process of Hungary’s departure from the EU”, he said in a statement.

The ruling Fidesz party said in a statement that “it is not the EU and Hungary’s membership in it that is the problem but the erroneous migration policy of Brussels”. It added that parties with a “sanctimonious” message in support of Europe and the single currency would now be joining efforts to settle migrants in Europe and in Hungary if they were in power. Fidesz in its statement underscored its commitment to Europe, saying Hungary is now a member of the bloc and would continue to be one in the future, too.