Answering a question, Varga said Hungary must wait and see how things play out in the euro zone, noting that other countries looked like they were doing the same thing and were not in a rush to join either.

“It is impossible to keep a currency system healthy in the long run when it has a unified monetary policy but different fiscal policies,” Varga said.

“There is no way to stabilise the exchange rate when the European Central Bank sets a common interest rate.” At this stage Hungary only fails to meet one of the euro convergence criteria, but it deliberately has not pegged the forint’s exchange rate to the euro, he said.

Once the decision is made, Hungary will be ready to join the euro zone, Varga said, adding, at the same time, that the economy would have to be competitive enough for Hungary to adopt the common currency.

Republished with permission of Hungary Matters, MTI’s daily newsletter.

MTI photo: Balogh Zoltán