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Could the Euro soon be used in Hungary as the country's general election looms?
Chris Jones in Budapest
Europe;Hungary
Could Hungary adopt the Euro? /Michael Probst/AP

Could Hungary adopt the Euro? /Michael Probst/AP

Hungary's main opposition parties have pledged to adopt the Euro in the next five years, should they win April's general election.

The debate about whether Hungary should drop the Forint has gone on since it became a member of the European Union in 2004.

There had been plans. Those plans were scrapped and then there were more plans. But as things currently stand, there is no target date to join the Euro; Prime Minister Viktor Orban is a fan of the Forint.

He says that the currency gives Hungary independence and an ability to trade more freely with countries outside of the EU, such as China.

Csaba Lentner, who works for the university of public service, supports that line of thinking.

"Until 2020 the National Bank could save the purchase value of Hungarian salaries with a monetary policy independent from the European one," he told CGTN.

"If we would have had to meet EU regulations the National Bank wouldn't be able to be so flexible and quick and we wouldn't have reached 5 percent economic growth."

Current Prime Minister Viktor Orban is a big fan of the Forint. /AP

Current Prime Minister Viktor Orban is a big fan of the Forint. /AP

 

But even if the government wanted to, could it join the Eurozone? The answer, right now, is no.

That's because it does not pass the economic tests, called the Maastricht Criteria, needed to enter the Eurozone.

As part of the criteria, countries must not exceed the top three performing EU country's inflation rate by 1.5 percent. Hungary exceeds that by 4.2 percent.

A country must also not exceed 60 percent government debt of GDP. In Hungary, government debt is 66.3 percent.

And its long term interest rate must not exceed 2 percent of the leading EU countries. Hungary's long term interest rate is 3.9 percent too high.

But despite that and the caution held by the Orban administration, some still wish to join the Eurozone.

 

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Peter Akos Bod is the former governor of the Hungarian national bank and believes it would be a good thing.

"The Euro is a good currency, a non-inflation currency, the Hungarian forint is a very highly inflation currency so there might be a one-off price increase for one month when the transition takes place so it might be a tiny item, what we have now is pretty high inflation and that's why the Hungarian public is for Euro," he told CGTN.

The coalition that makes up the main political opposition in Hungary want to adopt the Euro by 2027.

As of yet, it has not outlined a clear plan as to how it would achieve that... and it's all hypothetical until they take power.

And with Orban ahead in the polls, it may be quite some time still before Hungary joins the Eurozone, if indeed it ever does.

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