Reflections on the Essay ‘Thoughts on the Dilemma of When to Introduce the Euro in Hungary’ by Péter Gottfried

Abstract

The Our Vision section in the September 2021 issue of the Financial and Economic Review included an essay by Péter Gottfried, member of the Monetary Council of the Magyar Nemzeti Bank (the Central Bank of Hungary, MNB), entitled ‘Thoughts on the dilemma of when to introduce the euro in Hungary’. This article is a response and supplement to that essay’s arguments and conclusions. In accordance with Article 140(1) of the Treaty on the Functioning of the European Union, the European Commission (EC) and the European Central Bank (ECB) shall report to the Council on fulfilling the conditions of introducing the euro, at least once every two years. However, Péter Gottfried’s essay is deliberately not about this; instead, it makes important points about when and under what conditions the obligations regarding euro introduction should be fulfilled if Hungary already meets the conditions. It is high time to consider this, in particular for two reasons: on the one hand, Croatia, which joined the EU later than Hungary, and possibly even Bulgaria, may join the euro area soon, reducing the number of countries staying outside to five. On the other hand, Sweden became an EU member nine years before Hungary: it has the same obligation to introduce the euro and fulfils practically all of the criteria for joining the currency club, but still does not plan to introduce the euro in the foreseeable future. The analysis is also timely because we now have a perspective of two decades, and it could and should be assessed to what extent the euro has met expectations, and how the exit of the United Kingdom, as the internal ‘opposition’ to deepening the Economic and Monetary Union (EMU), is shaping the future of the EMU.