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Veres sees euro referendum possible in 2007

Hungary could hold a non-binding referendum already in 2007 instead of 2008 on meeting the terms of euro adoption, Finance Minister János Veres told commercial radio Gazdasági Rádió in an interview on Thursday.

Veres said the question citizens may be asked could be as follows: “Do you support Hungary meeting the conditions for the adoption of the euro and uphold these criteria permanently?”
Prime Minister Ferenc Gyurcsány proposed last Friday to hold a referendum in 2008 on euro entry.
Hungary must, among others, cut its public sector deficit to below 3% of gross domestic product in 2008 in order to be able to join the EMU in 2010 as planned.
Veres added that meeting the terms of euro entry would require serious efforts from the economy and the referendum would authorize policy makers to take these steps.
2010 will be another election year in Hungary and as joining the euro zone will have short-term negative impacts on the economy. Veres said it would be more advisable to adopt the single European currency on July 1 instead of January 1.
If at the referendum the population decided not to endorse the necessary measures for euro adoption, the government will need to convince them that the single currency was a must for the country, Veres said.
“We must convince the people with rational arguments that the forint cannot hold up on the market alone without being target to speculation,” Veres said.