Hungary’s new political leadership has set out an ambitious path towards adopting the euro by 2030, but the plan is already drawing scrutiny over its economic risks and the scale of adjustment required to meet the currency bloc’s strict entry conditions.
Following his recent election victory, Prime Minister-elect Péter Magyar of the Tisza Party confirmed that his government aims to create the conditions for euro adoption within the next four years, framing 2030 as a target date for meeting the necessary criteria.
His candidate for finance minister, András Kármán, has confirmed that timetable, while stressing that earlier accession cannot be ruled out if economic conditions improve more rapidly than expected.
The government’s ambition is rooted in the argument that joining the eurozone would bring stability, lower interest rates, reduced inflation expectations, and a more predictable exchange rate environment.
Kármán has pointed to Hungary’s close economic ties with the euro zone as justification, arguing that abandoning the forint would reduce volatility for businesses and households.
Yet the political rhetoric masks a far more complex economic reality.
Euro adoption requires compliance with the Maastricht criteria, including a public debt ratio below 60% of GDP, inflation tightly aligned with the eurozone’s best-performing economies, exchange rate stability, and the fiscal deficit requirement of 3% of GDP.
Hungary’s deficit stood at 4.7% last year—an improvement on previous years but still significantly above the threshold. At the same time, economic growth—similarly to the rest of Europe—has been weak.
According to Hungarian news website VG.hu, meeting the fiscal criteria would therefore likely require austerity measures: either substantial spending cuts or tax increases.
Tightening fiscal policy to meet euro entry conditions could further depress growth, making convergence even harder. Enlargement of the euro zone has accelerated in recent years: Bulgaria joinedas the 21st member earlier this year, and Sweden strives to become the 22nd. Bulgaria’s entry was met with fierce opposition at home, as the country’s leadership declined to hold a referendum on the issue.
With more member states adopting the currency, concerns persist about whether a single monetary policy can accommodate economies at different stages of development.
As Sven R. Larson points out in his analysis for europeanconservative.com, “there are a host of reasons why Hungary should not join the euro, one being the inevitable drift into economic stagnation.”
By mandating that all members minimize budget deficits and government debts, the EU has effectively turned austerity-oriented fiscal policy into a non-negotiable norm for the member states. Hungary, wisely remaining outside the euro zone under Fidesz, has thus far been able to use expansionary fiscal policy to help generate economic growth; within the euro zone, on the other hand, economic growth has slowed down universally precisely because austerity is the fiscal-policy norm.
While the Tisza government presents euro adoption as a step towards modernisation and stability, the economic trade-offs remain potentially politically explosive if the costs of convergence outweigh the promised benefits.
Zoltán Kottász is a journalist for europeanconservative.com, based in Budapest. He worked for many years as a journalist and as the editor of the foreign desk at the Hungarian daily, Magyar Nemzet. He focuses primarily on European politics.
