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Joining euro zone requires sweeping reforms - Járai

Hungary needs strict public finance reforms to meet the Maastricht criteria by 2008, central bank president Zsigmond Járai said on Tuesday. Járai said that the reforms would involve drastic changes and cutbacks totaling Ft 1,300 billion (€5.2 billion) in the central budget, adding that achieving these goals seemed impossible. Whatever government emerged after the spring elections, it would have to adopt an entirely new economic policy as the current structure of the public sector could not be financed any longer, he told a conference. Low inflation and interest rates did not reflect the economy's poor fundamentals, Járai said. Foreign investor sentiment could rapidly change and the country could suffer as a result of being unprepared for this, he added.
Earlier in the day Prime Minister Ferenc Gyurcsány underscored the government's commitment to reducing the budget deficit sufficiently by 2008 and adopting the single currency in line with the original schedule.