EXCLUSIVE-Hungary finance minister hopes deficit cuts pave way for 2032 euro entry
Bruegel says Hungary needs deeper fiscal and institutional reforms, warning that a 3% deficit alone will not secure sustainable euro adoption.
- Brussels-Based economic think tank Bruegel identified five areas Hungary must address to sustainably adopt the euro, including institutional readiness, sustainable public finances, and credible inflation control.
- Finance Minister Andras Karman told Reuters that Hungary is prioritizing sustainable deficit reduction to bring levels below 3% of output by 2030. The government's first budget targets a 4.9% deficit in 2027, down from this year's expected 7.5% level.
- Energy price caps will cost 232 billion forints next year, exceeding the 200 billion forints the government aims to raise from a new wealth tax. Bruegel recommends eliminating poorly targeted subsidies and limiting the 13th-month pension.
- Karman said the government plans to form a working group with the central bank next year to map out a "realistic" timetable for entering ERM-2. This marks a policy shift from former Prime Minister Viktor Orban, who strongly opposed adopting the euro.
- Deputy Governor Zoltan Kurali warned earlier this month that fiscal slippage and exchange-rate turbulence could push euro accession beyond 2033. Experts stress that meeting entry criteria does not guarantee long-term economic success.
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18 Articles
The Hungarian government hopes that a budgetary adjustment focused on reducing expenditure will pave the way for a sustainable reduction in the deficit and put the country on the path to the adoption of the euro, possibly in 2032, the Budapest Finance Minister for Reuters said.
The Hungarian government aims to adopt the euro as soon as possible and believes that reducing the budget deficit below the 3% of GDP threshold by 2030 could allow for a switch to the European single currency in 2032. The plan is based on a budgetary adjustment focused on reducing expenditure in the coming years, Hungarian Finance Minister Andras Karman said in an interview with the Reuters Agency.
The Hungarian government hopes that a budgetary adjustment focused on spending cuts in the coming years will pave the way for a sustainable reduction of the deficit and put the country on the path of the euro adoption "as soon as possible," Hungarian finance minister Andras Karman told Reuters. Prime Minister Peter Magyar's first budget, considered a test ...
Hungary may be getting closer to the euro, but meeting the official entry criteria at a favorable moment is not enough for successful accession. Zsolt Darvas and Gene Frieda, analysts at the Bruegel Research Institute in Brussels, warn in their recent study that the real test is whether the Hungarian economy can remain viable in the long term without its own interest rate policy and independent exchange rate. If the preparation is one-sided, the…
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