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Járai warns against currency instability

The stability of the forint is at serious risk because politicians are so wrapped up in the election campaign that they have failed to deal with the urgent need for fiscal reform, Zsigmond Járai, president of the National Bank of Hungary (MNB) told Dow Jones Newswires yesterday.

Járai said there were no signs of preparations for fiscal reforms. He noted that international appetite for risk-taking was falling, Hungary lacked fiscal transparency, and there was increasing pressure from the EU to rein in the public finance deficit.
“Hungary needs lower taxes, radically reduced social spending and cutbacks on public-sector employment,” Járai said. He said the 2010 target date for Eurozone entry was mere political propaganda, and that even 2013-2014 was only possible if reforms started immediately.