WHO NEEDS THE EURO?
WHO NEEDS THE EURO?

Summary/Abstract: Given the acute challenges that Hungary is facing in the fifth year of the financial disturbances in Europe, one could argue that it is not topical to discuss the whys, ifs and hows of Hungary’s entry into the eurozone. The last time Hungary comfortably met even one entry condition of the notorious set of five Maastricht criteria was back in 2001, when we were not yet even in the European Union and thus were not able to apply to enter the third phase of Economic and Monetary Union (ERM 3): the one that involves the final, irrevocable fixing of the exchange rate of the national currency and consequent surrendering of sovereign monetary policy. It is hard to believe now that this economic variable was public sector debt per GDP – nowadays the hottest policy indicator both inside and outside the eurozone; and the one that rating agencies scrutinise the most keenly before declaring their verdict on a country’s sovereign risk.

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