Would the euro instead of the forint save the Hungarian economy?
The Hungarian economy is currently under heavy pressure and there is a fear of its collapse. For a country to go bankrupt, a lot needs to be done. Still, the country’s economy is not doing well. Many hope that a new currency might bring the long-awaited salvation. However, this might not be the case, according to analysts. Amid a crisis, introducing the euro is certainly not a good idea. However, the crisis is not the only problem.
In the current situation of Hungary, the euro’s introduction is still far away. According to the agreement with which Hungary joined the European Union, it must eventually introduce the euro. But even after eighteen years of being a member, this still seems unrealistic. The Hungarian economy is not in a position where such a move would be a good idea. In times like these, even the criteria for introducing the euro are volatile because the markets are so uncertain. This would make it very hard to even think about how to introduce the currency and most likely compromises would be needed.
The near future will not be better
The war will not end according to forecasts even by the same time next year. At least 2-3 years will be needed for a clearer picture, said Péter Virovácz, the lead analyst of the ING Bank, to Index.hu. As long as the economies do not stabilise, we will not be able to see the true state of economies. The analyst also says, that changing the criteria would be a logical move to ensure the fiscal stability of the Union.
During the Covid pandemic, the Hungarian economy saw one of the lowest recessions mostly because of independent monetary politics. Hungary was able to deal with the pandemic on its own, but the energy crisis is too overwhelming. In the first case, independence was a blessing, but now it is a curse. In the past few months, the euro also weakened, so even with it, inflation would be present. But this inflation would be less as it would mostly affect non-euro-based transactions.
Dávid Németh, the lead analyst of the K&H Bank said that Hungary could be worse off with the Euro in the next 20 years. After joining the Eurozone, Hungary would lose its competitiveness for at least 1-2 years. Without widespread discussion, the question of the Euro introduction still remains a mystery. The government must include the largest employers in the discussion to know whether employees would be better or worse off with the euro. If the companies themselves are not able to benefit from the currency change, then no one really will.
Without budgetary discipline, Hungary will not be able to join the Eurozone any time soon. The current situation might put enough pressure on the government to change its spending practices. The euro is not a guarantee for a better economy. For a better answer, we will have to wait for calmer times.
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Source: Index.hu
“Sometimes our best is simply not enough.
We have to do what is required.”
AND
“The farther backwards you can look,
the farther forward you can see.”
Hungary is quite a Conundrum.
We continue to have exposed to us CONFIRMATION – the vastness of FAILINGS – Economically & Financially of the present Government of Hungary under Prime Minister – Victor Orban.
Failings monumental in “broadsheet” componentry of Hungary.
Factually we have had it confirmed from Brussels that the European Union no longer view Hungary, as a member country of the European Union, that is Governed under DEMOCRACY.
Relationships with Hungary – from just not European Union member country’s but from “other” Global World “Power” democratic governed country’s – in Europe & Globally, inclusive of Britain, these relationships have been Decimated by the Orban led Government of Hungary.
The conundrum for Hungary – is its FUTURE in the European Union.
Hungary – can’t “go it alone.”
Hungary – can’t DEEPEN – its RELATIONSHIPS with Russia nor China – as reprisal – retaliation – from the European Union membership, Great Britain and the United States of America – and Globally, would be PERILOUS.
Are we not at this point in time – through the Political Ideas and Philosophy of the Fidesz Party, there “CREEDS” – under the leadership, of the present Prime Minister of Hungary – Victor Orban – can’t NOT it be Felt & SEEN – as a country – we have been ISOLATED ???
Victor Orban is NOT going to NEVER – “Toe the Line” – with the European Union.
WHY ?
It would NEED a total re-write of the “creed” – the “dogma” of the Fidesz Political Party, that have been the perpertrators – the Political Party of Guilt, in the collapse of Hungarys relationship – respect – within the European Union.
Orban – has tried over years to Divide, Separate, Fragment – and EMBARRASS – the European Union.
This divide & conquer philosophy – the POWER games played by Victor Orban – has come back HORRENDOUSLY on him and Hungary – that sees FUNDIND – absolutly dried up ceased – and the European Union still waiting on replys to questions muchly centered focused on the past distribution of funding that Hungary have received from the European Union.
Hungary – under the Orban led Government are not going to change currency from the Forint to the Euro Dollars.
The Oligarchs – would NOT “sign off” to this change of currency, at this time, with the Hungarian Economy, at a point of near a CATASTROPHE.
Hungary – the Future under a change of Government, reverting back to DEMOCRACY, rather than the dictatorial government – that has commenced Ruling by Decree, a NEEDED – change of Government in Hungary – agreeing to “by the book” play by the Laws of European Union Membership, a currency change from forint to the Euro Dollar – could be a POSSIBILITY.
Hungary – maybe in the CONUNDRUN – in the “Hanging” perilously – on the edge of a Cliff – its FUTURE – in a place of mass un-certainty, remember that History NEVER Lies.
“When the Yoke is Broken,
the BURDEN is Removed.”
WHO is Hungarys – YOKE ?
WHO is Hungarys – BURDEN ?