MNB vice-chair urges fast Euro in Hungary

History

Hungary should introduce the Euro as soon as possible, although the fast introduction could also bring higher risks, vice-chairman of the National Bank of Hungary (MNB) Ferenc Karvalits said.

To introduce the Euro the government should make sure the labor market is flexible enough and the budget has enough reserves to manage some external influences, Karvalits said. The Euro in Hungary would go together with the elimination of exchange rate risks for entrepreneurs, foreign trade contacts could further be extended and this could also lead to greater economic stability.

The Hungarian labor market could party get adjusted to the challenges of inflation and productivity changes recently, but more attention has to be paid to structural tensions, Karvalits said. A key problem is the social system in Hungary, where many people can retire at an age under 60 or have themselves declared disabled and retire. Also mothers are allowed to stay at home very long that makes their return to the labor market very difficult. It is not enough to reach the 3% budget deficit limit, but Hungary must be kept in balance in the long run, Karvalits said. (Gazdasági Rádió)

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