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GS sees Hungary joining eurozone by 2013

All of the Central European EU members - including Hungary - could join the eurozone by 2013, according to investment bank Goldman Sachs.

In an evaluation of Hungary's prospects, Goldman Sachs London-based analysts said Hungary is in no position right now to decide on a date to join the ERM-2, the “waiting room” for the euro because of political instability in the country. However, if the minority government or a new coalition can successfully push through the 2009 budget with the 3.2%-of-GDP general government deficit target, and if inflation continues to slow, Hungary could join the ERM-2 sometime in 2009. Even if ongoing political troubles lead to early elections coming around in spring 2009, ERM-2 membership is still possible in the second-half of the year or in early 2010, which would open the way to euro introduction in 2013.

The analysts noted that joining the ERM-2 could give Hungary's government - whose popularity has suffered the effects of austerity measures to rein in the country's budget deficit - a boost before the next general elections, to be called in the spring of 2010 at the latest.

“An ERM-2 membership would be a way to show that the sacrifices were not all in vain,” the analysts said. (MTI – Econews)