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Matolcsy sees euro introduction “very far away”

The Hungarian government is not concerned by the opinions of international rating agencies, it is happy to have parted ways with the IMF and is in no hurry to adopt the euro, National Economy Minister György Matolcsy told Austria’s Der Standard.

Matolcsy confirmed that the government did not regret that the negotiations with the International Monetary Fund have been ceased. He said that Hungary is grateful for the support of the international organizations, but now the government has to finance itself from market sources instead of loans from foreign countries.

Matolcsy also explained that the government did not want to introduce further austerity measures. Therefore it made affluent business sectors contribute to the central budget in the form of special crisis taxes. To questions regarding the discriminative nature of the taxes the minister pointed out that the extraordinary taxes were not levied based on the nationality but size of the companies. He conceded that if he was in the position of a bank he would not be happy to pay the extraordinary tax either.

Matolcsy stressed that the government will introduce comprehensive structural changes which will decrease the current 82% of GDP state debt to 64%.

He added that the credit rating institutions, which downgraded Hungary to near-junk investment grades, acted without understanding the situation. Furthermore, these firms have lost their credit after the financial crisis, he added. In his view the agencies do not appreciate the unusual measures taken by the Hungarian government since they are on banks’ and private pension funds’ side. But financial markets no longer believe their reports which is shown by the recovery of the Hungarian currency and the stock market, the minister added.

Regarding the adoption of the euro Matolcsy stated that it will not be introduced earlier than 2020. He said Hungary first wants to be in line with the Maastricht criteria, which he does not believe to be possible at an earlier date. He highlighted that the euro will Hungary will adopt the common currency once the state debt rate will be decreased to 50%.