Matolcsy calls the Euro a mistake
November 7th, 2019A leading business analyst finds it obvious that since the President of the National Bank urged the EU to lift the obligation of member countries to join the Eurozone, Hungary has no intention of joining the common currency.
On Portfolio, István Madár agrees with most of the diagnosis contained in György Matolcsy’s article in the Financial Times on Sunday, in which the President of the Hungarian National Bank urged the EU to admit that introducing the common currency was a mistake and members of the eurozone should be allowed to opt out. Madár acknowledges that the Eurozone has underperformed over the past decades and the EU stands paralysed before the obvious shortcomings of the joint currency system. Most observers agree that without a joint budget and a common ministry of finance, the Euro is not viable, but Hungary would strongly oppose any such further centralisation. That seems to indicate that the Hungarian government is practically opposed to joining the eurozone. On the other hand, Hungary’s official position is still the same as at the time of the 2004 EU accession, namely that introducing the Euro is only a matter of time. Over and above the mandatory Maastricht criteria, however, the government has set itself an additional one: per capita GDP should amount to 90 per cent of the EU average. As Mr Matolcsy now argues that eurozone member countries should be allowed to leave the common currency, the logical corollary is that the remaining, non-Euro member countries should not be compelled to join. If the government’s main strategist on the economy now wants to make Euro membership optional, Madár concludes, then it is fair to presume that the government doesn’t consider joining the Euro a desirable option any time in the future.