"The European Union would be happy to see Hungary joining the euro zone, but not unless it meets the Maastricht criteria, European Economic and Monetary Affairs Commissioner Joaquin Almunia said. His remark comes after reports on a possible fast lane for Hungary's EMU membership.“We will welcome you if you decide to join the euro zone, but on one condition: that you meet the Maastricht criteria," Almunia told business daily Világgazdaság, making it clear that Hungary can be no exception.
Answering a question whether Hungary could adopt the euro on “softer terms" and at a faster pace, Almunia said the criteria cannot be changed and the Commission “does not intend to differentiate between member states with alternative interpretations" of the conditions.
Currently, Hungary does not meet any of the Maastricht criteria for euro zone membership and analysts have put the country's accession date around 2013-2014. They believe, though, that if the government manages to cut the public sector deficit as planned, that date could move forward.
Almunia said the key challenge Hungary is facing right now was the narrowing of the budget gap.
“The consolidation of the budget is the most important task, even if growth prospects deteriorated. Achieving the 2.6% (of GDP) deficit targeted for 2009 is a bigger challenge."
The Commissioner said putting the budget in order was a key precondition to any other measure aimed at stimulating the economy.
As part of the agreement with the International Monetary Fund, the European Union and the World Bank on an EUR 20 bn credit line, Hungary pledged to cut its budget deficit to 2.6% of GDP next year from an expected 3.4% in 2008, in part through painful social spending cuts and the scrapping of previous tax reduction plans."
Source: Portfolio Online Financial Journal
06.11.2008