Hungary wants to set the euro adoption target date by September 30 at the latest, since that’s the deadline to submit the 2010 budget and the economic program for the next three years to parliament, Hungarian Prime Minister Gyurcsány said in an interview with Dow Jones Newswires on Tuesday.
“There’s a realistic chance that Hungary will be able to meet all the Maastricht criteria in 2011 on condition we stick to the economic measures we have outlined to boost the economy while keeping the economic balances,” he said.
“Over the next year, Hungary will get ERM2-ready so it could meet the Maastricht criteria, even with some efforts, in 2011,” Gyurcsány added. “It’s too early to talk about an exact euro entry target date yet, that will require a wider, national consensus, but we want to state that we plan to meet the conditions,” he said.
The chief risk factor to the plans is the global crisis, Gyurcsány told Dow Jones. If the Hungarian economy falls deeper in 2009 than the 3.0-3.5% contraction of gross domestic product the government forecasts at present, “further fiscal adjustments could be necessary to ensure the sustainability of financing, the government is committed to do so,” the PM said.
Keeping the financing need of the budget low is a priority and domestic savings should be channeled into government bonds, Gyurcsány said. “We hate this forint level and its volatility. It’s impossible to accommodate this volatility with traditional means,” Gyurcsány said, speaking about the forint which recently weakened to all time lows. “Hungary’s fundamentals would justify a stronger forint,” he said.
“We have to do everything to stop forint weakness. But we must be aware of the fact that the forint is partly at the mercy of global factors and only partly in our hands,” he said. “As long as the US won’t balance its budget better, all other currencies will be under pressure.” (MTI-Econews)