Finance Minister Mihaly Varga – Photo: MTI

Varga: Premature to talk about adopting euro

It is premature to talk about Hungary adopting the euro, Mihaly Varga, the finance minister, said at an event on Saturday.

It is important to restore balance to the economy as soon as possible, and fiscal policy must aim at reducing the deficit and the public debt, Varga said at the Tranzit festival in Tihany, in western Hungary.

At one point, Hungary had been in a position meet all conditions for joining the euro zone, bar the exchange-rate requirement, and the two most recent crises confirmed that had Hungary adopted the single currency, the Hungarian economy would be exposed to far less risk, Varga said.

The euro would also have several advantages politically, Varga said, noting that a Eurobarometer survey from January showed that 72 percent of Hungarians approved of the idea of joining the euro in the interest of stability.

But drawbacks, he added, were having to abandon an independent monetary policy and that the European Central Bank based its decisions mainly on the criteria of core countries such as France, Germany, The Netherlands and Italy, so Hungary may end up sidelined.

Central banker Gyula Pleschinger said during the debate that Hungary was now far away from joining the euro zone, “because we cannot even fulfill the Maastricht criteria”.

He said the country may be able to adopt the currency during the decade of 2030.

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