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Hungary sees euro a „roadmap” by mid-2008, Premier says

Hungary's government will work with the central bank to present a „road map” for adopting the euro between the middle of this year and the middle of 2008, Prime Minister Ferenc Gyurcsány said yesterday.

The strategy will outline a schedule for the decisions needed for euro adoption and entry to the European Union's Exchange Rate Mechanism, as well as long-term agreements about wage and development policies, Gyurcsány said. The government, which last year abandoned a plan to switch currencies in 2010 because of budget overruns, is working to reduce the shortfall after running up the EU's widest deficit last year. With the correction underway, the government can move toward longer-term goals, Gyurcsány said.
„I am not overly satisfied,” the premier told reporters in his study in Budapest's Parliament building. „We have to prepare another economic policy turnaround and preparations for euro adoption fit into that.” The forint strengthened to 251.91 per euro at 4:50 p.m. in Budapest from 252.77 earlier yesterday. The currency is the world's best performer over the past six months, having gained 10.5% versus the euro.

Gyurcsány reiterated that the government is working on introducing new fiscal rules to avoid future budget overruns. He said that he has the full support of both his Socialist Party and their coalition partner, the Free Democrats' Alliance, for the economic plans. There will be no changes in the cabinet in the „spring,” Gyurcsány said, adding that both Finance Minister János Veres and leading Free Democrat politicians are „very strong” in helping him get decisions approved in parliament.
Separately, the government plans to make a decision on whether to allow private insurers to compete in the health-care market by the end of April, the premier said. Other decisions this year will include new strategies on pensions and taxes. „Far from me to think that we are at the end of our work, the hardest part is just coming up,” Gyurcsány said. „Creating balance is just the mandatory,” part. Gyurcsány, who will run unchallenged for his party leadership this weekend, said he doesn't expect the street violence that gripped Budapest in September and October to reignite on the country's March 15 national holiday.
The Socialists will wait until the 2009 European Parliament elections to decide who their candidate for the premiership will be in 2010, he said. The party is firmly behind the government and there's no „visible” alternative political group forming within it, Gyurcsány added. (Bloomberg)